EXHIBIT 4.10
EXECUTION COPY
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GMH HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT
Expiring December 21, 2002
This Warrant and any shares acquired upon the exercise of
this Warrant have not been registered under the Securities
Act of 1933 and may not be transferred in the absence of
such registration or an exemption therefrom under such Act.
This Warrant and such shares are also subject to certain
restrictions on transferability imposed by a certain
Stockholders' Agreement, a copy of which is on file at the
offices of the Company.
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TABLE OF CONTENTS
1. Exercise of Warrant . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . 1
1.2. When Exercise Deemed Effected. . . . . . . . . . . . . . . . . 2
1.3. Delivery of Stock Certificates, etc. . . . . . . . . . . . . . 2
1.4. Company to Reaffirm Obligations. . . . . . . . . . . . . . . . 2
1.5. Payment by Application of the Notes. . . . . . . . . . . . . . 3
2. Adjustments; Dividends. . . . . . . . . . . . . . . . . . . . . . . 3
2.1. Number of Shares; Warrant Price. . . . . . . . . . . . . . . . 3
2.2. Adjustment of Warrant Price; Payment of Regular
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2.1. Issuance of Additional Shares of Common
Stock. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2.2. Dividends and Distributions. . . . . . . . . . . . . . 4
2.3. Treatment of Options and Convertible Securities. . . . . . . . 4
2.4. Treatment of Stock Dividends, Stock Splits, etc. . . . . . . . 7
2.5. Computation of Consideration . . . . . . . . . . . . . . . . . 7
2.6. Adjustments for Combinations, etc. . . . . . . . . . . . . . . 9
2.7. Dilution in Case of Other Securities . . . . . . . . . . . . . 9
2.8. Minimum Adjustment of Warrant Price. . . . . . . . . . . . . . 9
3. Consolidation, Merger, Sale of Assets,
Reorganization, etc . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1. General Provisions . . . . . . . . . . . . . . . . . . . . . . 10
3.2. Assumption of Obligations. . . . . . . . . . . . . . . . . . . 11
4. Other Dilutive Events . . . . . . . . . . . . . . . . . . . . . . . 12
5. No Dilution or Impairment . . . . . . . . . . . . . . . . . . . . . 12
6. Accountants' Report as to Adjustments . . . . . . . . . . . . . . . 13
7. Notices of Corporate Action . . . . . . . . . . . . . . . . . . . . 13
8. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . 14
8.1. Restrictive Legends. . . . . . . . . . . . . . . . . . . . . . 14
8.2. Notice of Proposed Transfer; Opinions of Counsel . . . . . . . 15
8.3. Termination of Restrictions. . . . . . . . . . . . . . . . . . 16
9. Registration under Securities Act . . . . . . . . . . . . . . . . . 16
10. Financial Information . . . . . . . . . . . . . . . . . . . . . . . 16
10.1. Financial Statements . . . . . . . . . . . . . . . . . . . . 16
10.2. Availability of Information. . . . . . . . . . . . . . . . . 18
11. Reservation of Stock, etc . . . . . . . . . . . . . . . . . . . . . 18
12. Ownership, Transfer and Substitution of Warrants. . . . . . . . . . 18
12.1. Ownership of Warrants. . . . . . . . . . . . . . . . . . . . 18
12.2. Transfer and Exchange of Warrants. . . . . . . . . . . . . . 18
12.3. Replacement of Warrants. . . . . . . . . . . . . . . . . . . 19
13. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15. No Rights or Liabilities as Stockholder . . . . . . . . . . . . . . 25
16. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17. Expiration; Notice. . . . . . . . . . . . . . . . . . . . . . . . . 25
18. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Common Stock Purchase Warrant
Expiring December 21, 2002
New York, New York
December 21, 1995
PPN# 36189# 11 1
No. W-1
GMH HOLDINGS, INC., a Delaware corporation (the "Company"), for
value received, hereby certifies that THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES or registered assigns, is entitled to purchase from the
Company 350,000 duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock, par value $.001 per share,
of the Company (the "Common Stock"), which may be either Class B
Common Stock or (at the election of the holder of this Warrant if
such holder is an Eligible Holder) Class A Common Stock or (in
the case of an Eligible Holder) any combination thereof, at the
purchase price per share of $.01, at any time or from time to
time prior to 3:00 P.M., New York City time, on December 21,
2002, all subject to the terms, conditions and adjustments set
forth below in this Warrant.
This Warrant is one of the Common Stock Purchase
Warrants (the "Warrants", such term to include all Warrants
issued in substitution therefor) originally issued in connection
with the issue and sale by General Manufactured Housing, Inc., a
wholly-owned subsidiary of the Company, of $17,243,295 aggregate
principal amount of its Senior Subordinated Notes due 2002
(together with all notes issued in substitution therefor, the
"Notes"), pursuant to the Note and Warrant Purchase Agreement
(the "Purchase Agreement"), dated as of December 21, 1995,
between the Company and the institutional investor named therein
(the "Purchaser"). The Warrants originally so issued evidence
rights to purchase an aggregate of 350,000 shares of Common
Stock, subject to adjustment as provided herein. Certain
capitalized terms used in this Warrant are defined in section 13.
1. Exercise of Warrant. 1.1. Manner of Exercise.
This Warrant may be exercised by the holder hereof, in whole or
in part, during normal business hours on any Business Day by
surrender of this Warrant, with the form of subscription at the
end hereof (or a reasonable facsimile thereof), setting forth
such holder's election to receive Class A Common Stock or Class B
Common Stock or a combination thereof, duly executed by such
holder, to the Company at its principal office (or, if such
exercise shall be in connection with an underwritten Public
Offering of shares of Common Stock (or Other Securities) subject
to this Warrant, at the location at which the Company shall have
agreed to deliver the shares of Common Stock (or Other
Securities) subject to such offering), accompanied by payment, in
cash or by certified or official bank check payable to the order
of the Company or by application of Notes in the manner provided
in section 1.5 (or by a combination of such methods), in the
amount obtained by multiplying (a) the number of shares of Common
Stock (without giving effect to any adjustment therein)
designated in such form of subscription by (b) $.01, and such
holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully paid and nonassessable shares
of Common Stock (or Other Securities) determined as provided in
sections 2 through 4.
1.2. When Exercise Deemed Effected. Each exercise of
this Warrant shall be deemed to have been effected immediately
prior to the close of business on the Business Day on which this
Warrant shall have been surrendered to the Company as provided in
section 1.1, and at such time the person or persons in whose name
or names any certificate or certificates for shares of Common
Stock (or Other Securities) shall be issuable upon such exercise
as provided in section 1.3 shall be deemed to have become the
holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as
practicable after the exercise of this Warrant, in whole or in
part, and in any event within five Business Days thereafter
(unless such exercise shall be in connection with an underwritten
Public Offering of shares of Common Stock (or Other Securities)
subject to this Warrant, in which event concurrently with such
exercise), the Company at its expense (including the payment by
it of any applicable taxes other than transfer taxes) will cause
to be issued in the name of and delivered to the holder hereof
or, subject to section 8, as such holder (upon payment by such
holder of any applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of
duly authorized, validly issued, fully paid and
nonassessable shares of Class A Common Stock or Class B
Common Stock (or Other Securities) to which such holder
shall be entitled upon such exercise plus, in lieu of any
fractional share to which such holder would otherwise be
entitled, cash in an amount equal to the same fraction of
the Market Price per share of such Common Stock (or Other
Securities) on the Business Day next preceding the date of
such exercise, and
(b) in case such exercise is in part only, a new
Warrant or Warrants of like tenor, calling in the aggregate
on the face or faces thereof for the number of shares of
Common Stock equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face
of this Warrant minus the number of such shares designated
by the holder upon such exercise as provided in section 1.1.
1.4. Company to Reaffirm Obligations. The Company
will, at the time of or at any time after each exercise of this
Warrant, upon the request of the holder hereof or of any shares
of Common Stock (or Other Securities) issued upon such exercise,
acknowledge in writing its continuing obligation to afford to
such holder all rights (including, without limitation, any right
of registration of any shares of Common Stock (or Other
Securities) issuable upon exercise of this Warrant pursuant to
section 9) to which such holder shall continue to be entitled
after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such
request, the failure shall not affect the continuing obligation
of the Company to afford such rights to such holder.
1.5. Payment by Application of the Notes. Upon any
exercise of this Warrant, the holder hereof may, at its option,
instruct the Company, by so specifying in the form of
subscription submitted therewith as provided in section 1.1, to
apply to the payment required by section 1.1 all or any part of
the principal amount then unpaid and of the interest on such
principal amount then accrued on any one or more Notes at the
time held by such holder, in which case the Company will accept
the aggregate amount of principal and accrued interest on such
principal specified in such form of subscription in satisfaction
of a like amount of such payment. In case less than the entire
unpaid principal amount of any Note shall be so specified, the
principal amount so specified shall be credited, as of the date
of such exercise, against the installments of principal then
remaining unpaid on such Note pro rata to all such remaining
installments. Within ten days after receipt of any such notice,
the Company will pay to the holder of the Notes submitting such
form of subscription, in the manner provided in such Notes and
the Purchase Agreement, all unpaid interest accrued to the date
of exercise of such Warrant on the principal amount so specified
in such form of subscription that is not applied to the payment
required by section 1.1 under this section 1.5. In the event
that the entire unpaid principal amount of any Note is applied
to the payment required by section 1.1 under this section 1.5,
such Note shall be promptly surrendered and cancelled in
accordance with the Purchase Agreement.
2. Adjustments; Dividends. 2.1. Number of Shares;
Warrant Price. The number of shares of Common Stock which the
holder of this Warrant shall be entitled to receive upon each
exercise hereof shall be determined by multiplying the number of
shares of Common Stock which would otherwise (but for the
provisions of this section 2) be issuable upon such exercise, as
designated by the holder hereof pursuant to section 1.1, by a
fraction of which (a) the numerator is $.01 and (b) the
denominator is the Warrant Price in effect on the date of such
exercise. The "Warrant Price" shall initially be $.01 per share,
shall be adjusted and readjusted from time to time as provided in
this section 2 and, as so adjusted or readjusted, shall remain in
effect until a further adjustment or readjustment thereof is
required by this section 2.
2.2. Adjustment of Warrant Price; Payment of Regular
Dividends. 2.2.1. Issuance of Additional Shares of Common
Stock. In case the Company, at any time or from time to time
after December 21, 1995 (the "Initial Date"), shall issue or sell
Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to section 2.3 or 2.4)
without consideration or for a consideration per share less than
the Current Market Price in effect, in each case, on the date of
and immediately prior to such issue or sale, then, and in each
such case, subject to section 2.8, such Warrant Price shall be
reduced, concurrently with such issue or sale, to a price
(calculated to the nearest .0001 of a cent) determined by
multiplying such Warrant Price by a fraction,
(a) the numerator of which shall be (i) the number of
shares of Common Stock outstanding immediately prior to such
issue or sale plus (ii) the number of shares of Common Stock
which the aggregate consideration received by the Company
for the total number of such Additional Shares of Common
Stock so issued or sold would purchase at the Current Market
Price, and
(b) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such
issue or sale,
provided that, for the purposes of this section 2.2.1 (x)
immediately after any Additional Shares of Common Stock are
deemed to have been issued pursuant to section 2.3 or 2.4, such
Additional Shares shall be deemed to be outstanding, and (y)
treasury shares shall not be deemed to be outstanding.
2.2.2. Dividends and Distributions. In case the
Company at any time or from time to time after the Initial Date
shall declare, order, pay or make a dividend or other
distribution (including, without limitation, any distribution of
other or additional stock or other securities or property or
Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on any
Common Stock, other than a dividend payable in Additional Shares
of Common Stock or in Options for Common Stock, then, and in each
such case, the holder of this Warrant shall be entitled to
receive the amount in cash or other property to which such holder
would actually have been entitled as a shareholder upon the
payment thereof by the Company if such holder had exercised this
Warrant immediately prior to the close of business on the record
date fixed for the determination of holders of Common Stock
entitled to receive such dividend.
2.3. Treatment of Options and Convertible Securities.
In case the Company at any time or from time to time after the
Initial Date shall issue, sell, grant or assume, or shall fix a
record date for the determination of holders of any class of
securities entitled to receive, any Options or Convertible
Securities, then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument
relating thereto, without regard to any provisions contained
therein for a subsequent adjustment of such number) issuable upon
the exercise of such options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of
such Convertible Securities, shall be deemed to be issued for
purposes of section 2.1 as of the time of such issue, sale, grant
or assumption or, in case such a record date shall have been
fixed, as of the close of business on such record date (or, if
the Common Stock trades on an ex-dividend basis, on the date
prior to the commencement of ex-dividend trading), provided that
such Additional Shares of Common Stock shall not be deemed to
have been issued unless the consideration per share (determined
pursuant to section 2.5) of such shares would be less than the
Current Market Price in effect, in each case, on the date of and
immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date
(or, if the Common Stock trades on an ex-dividend basis, on the
date prior to the commencement of ex-dividend trading), as the
case may be, and provided, further, that in any such case in
which Additional Shares of Common Stock are deemed to be issued,
(a) no further adjustment of the Warrant Price shall
be made upon the subsequent issue or sale of Additional
Shares of Common Stock or Convertible Securities upon the
exercise of such Options or the conversion or exchange of
such Convertible Securities;
(b) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the Company, or
decrease in the number of Additional Shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof
(by change of rate or otherwise), the Warrant Price computed
upon the original issue, sale, grant or assumption thereof
(or upon the occurrence of the record date, or date prior to
the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options, or the rights
of conversion or exchange under such Convertible Securities,
which are outstanding at such time;
(c) upon the expiration of any such Options or of the
rights of conversion or exchange under any such Convertible
Securities which shall not have been exercised (or upon
purchase by the Company and cancellation or retirement of
any such Options which shall not have been exercised or of
any such Convertible Securities the rights of conversion or
exchange under which shall not have been exercised), the
Warrant Price computed upon the original issue, sale, grant
or assumption thereof (or upon the occurrence of the record
date, or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto), and any
subsequent adjustments based thereon, shall, upon such
expiration (or such cancellation or retirement, as the case
may be), be recomputed as if:
(x) in the case of options for Common Stock or of
Convertible Securities, the only Additional Shares of
Common Stock issued or sold were the Additional Shares
of Common Stock, if any, actually issued or sold upon
the exercise of such Options or the conversion or
exchange of such Convertible Securities and the
consideration received therefor was (i) an amount equal
to (A) the consideration actually received by the
Company for the issue, sale, grant or assumption of all
such Options, whether or not exercised, plus (B) the
consideration actually received by the Company upon
such exercise, minus (C) the consideration paid by the
Company for any purchase of such Options which were not
exercised, or (ii) an amount equal to (A) the
consideration actually received by the Company for the
issue, sale, grant or assumption of all such
Convertible Securities which were actually converted or
exchanged, plus (B) the additional consideration, if
any, actually received by the Company upon such
conversion or exchange, minus (C) the consideration
paid by the Company for any purchase of such
Convertible Securities the rights of conversion or
exchange under which were not exercised, and
(y) in the case of Options for Convertible
Securities, only the Convertible Securities, if any,
actually issued or sold upon the exercise of such
Options were issued at the time of the issue, sale,
grant or assumption of such options, and the
consideration received by the Company for the
Additional Shares of Common Stock deemed to have then
been issued was an amount equal to (i) the
consideration actually received by the Company for the
issue, sale, grant or assumption of all such Options,
whether or not exercised, plus (ii) the consideration
deemed to have been received by the Company (pursuant
to section 2.5) upon the issue or sale of the
Convertible Securities with respect to which such
Options were actually exercised, minus (iii) the
consideration paid by the Company for any purchase of
such Options which were not exercised;
(d) no readjustment pursuant to subdivision (b) or (c)
above shall have the effect of increasing the Warrant Price
by an amount in excess of the amount of the adjustment
thereof originally made in respect of the issue, sale, grant
or assumption of such options or Convertible Securities; and
(e) in the case of any such Options which expire by
their terms not more than 30 days after the date of issue,
sale, grant or assumption thereof, no adjustment of the
Warrant Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made
in the manner provided in subdivision (c) above.
In case at any time after the Initial Date the Company
shall be required to increase the number of Additional Shares of
Common Stock subject to any Option or into which any Convertible
Securities (other than the Warrants) are convertible or
exchangeable pursuant to the operation of anti-dilution
provisions applicable thereto, such Additional Shares shall be
deemed to be issued for purposes of section 2.1 as of the time of
such increase.
2.4. Treatment of Stock Dividends, Stock Splits, etc.
In case the Company at any time or from time to time after the
Initial Date shall declare or pay any dividend or other
distribution on any class of stock of the Company payable in
Common Stock, or shall effect a subdivision of the outstanding
shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case,
Additional Shares of Common Stock shall be deemed to have been
issued (a) in the case of any such dividend, immediately after
the close of business on the record date for the determination of
holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the
close of business on the day immediately prior to the day upon
which such corporate action becomes effective.
2.5. Computation of Consideration. For the purposes
of this section 2:
(a) The consideration for the issue or sale of any
Additional Shares of Common Stock or for the issue, sale,
grant or assumption of any Options or Convertible
Securities, irrespective of the accounting treatment of such
consideration, shall
(x) insofar as it consists of cash, be an amount
equal to the amount of cash received by the Company,
without deducting any expenses paid or incurred by the
Company or any commissions or compensation paid or
concessions or discounts allowed to underwriters,
dealers or others performing similar services and any
accrued interest or dividends in connection with such
issue or sale,
(y) insofar as it consists of consideration
(including securities) other than cash, be computed at
the fair value thereof at the time of such issue or
sale, as determined in good faith by the Board of
Directors of the Company, without deducting any
expenses paid or incurred by the Company for any
commissions or compensation paid or concessions or
discounts allowed to underwriters, dealers or others
performing similar services and any accrued interest or
dividends in connection with such issue or sale, and
(z) in case Additional Shares of Common Stock are
issued or sold or Convertible Securities are issued,
sold, granted or assumed together with other stock or
securities or other assets of the Company for a
consideration which covers both, be the proportion of
such consideration so received, computed as provided in
subdivisions (x) and (y) above, allocable to such
Additional Shares of Common Stock or Convertible
Securities, as the case may be, all as determined in
good faith by the Board of Directors of the Company.
(b) All Options issued, sold, granted or assumed
together with other stock or securities or other assets of
the Company for a consideration which covers both, all
Additional Shares of Common Stock, Options or Convertible
Securities issued in payment of any dividend or other
distribution on any class of stock of the Company and all
Additional Shares of Common Stock issued to effect a
subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by reclassi-
fication or otherwise than by payment of a dividend in
Common Stock) shall be deemed to have been issued without
consideration (unless, in the case of Options issued, sold,
granted or assumed together with other stock or securities
or other assets of the Company for a consideration which
covers both, the portion of the consideration allocated to
the Options is specifically stated under the terms of such
transaction).
(c) Additional Shares of Common Stock deemed to have
been issued for consideration pursuant to section 2.3,
relating to Options and Convertible Securities, shall be
deemed to have been issued for a consideration per share
determined by dividing
(x) the total amount, if any, received and
receivable by the Company as consideration for the
issue, sale, grant or assumption of the Options or
Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to
the Company upon the exercise in full of such Options
or the conversion or exchange of such Convertible
Securities or, in the case of Options for Convertible
Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange
of such Convertible Securities, in each case computing
such consideration as provided in the foregoing sub-
division (a), by
(y) the maximum number of shares of Common Stock
(as set forth in the instruments relating thereto,
without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange
of such Convertible Securities.
(d) Additional Shares of Common Stock issued or deemed
to have been issued pursuant to the operation of anti-
dilution provisions applicable to Convertible Securities
(other than the Warrants), Options or other securities of
the Company (either as a result of the adjustments provided
for by the Warrants or otherwise) shall be deemed to have
been issued without consideration.
2.6. Adjustments for Combinations, etc. In case the
outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser
number of shares of Common Stock, the Warrant Price in effect
immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
2.7. Dilution in Case of Other Securities. In case any
Other Securities shall be issued or sold or shall become subject
to issue or sale upon the conversion or exchange of any stock (or
Other Securities) of the Company (or any issuer of Other
Securities or any other Person referred to in section 3) or to
subscription, purchase or other acquisition pursuant to any
Options issued or granted by the Company (or any such other
issuer or Person) for a consideration such as to dilute, on a
basis consistent with the standards established in the other
provisions of this section 2, the purchase rights granted by this
Warrant, then, and in each such case, the computations,
adjustments and readjustments provided for in this section 2 with
respect to the Warrant Price shall be made as nearly as possible
in the manner so provided and applied to determine the amount of
Other Securities from time to time receivable upon the exercise
of the Warrants, so as to protect the holders of the Warrants
against the effect of such dilution.
2.8. Minimum Adjustment of Warrant Price. If the
amount of any adjustment of the Warrant Price required pursuant
to this section 2 would be less than one percent of the Warrant
Price in effect at the time such adjustment is otherwise so
required to be made, such amount shall be carried forward and
adjustment with respect thereto made at the time of and together
with any subsequent adjustment which, together with such amount
and any other amount or amounts so carried forward, shall
aggregate at least one percent of such Warrant Price; provided
that, upon the exercise of this Warrant, all adjustments carried
forward and not theretofore made up to and including the date of
such exercise shall be made to the nearest one one-hundredth of a
cent.
3. Consolidation, Merger, Sale of Assets,
Reorganization, etc. 3.1. General Provisions. In case the
Company, after the Initial Date, (a) shall consolidate with or
merge into any other Person and shall not be the continuing or
surviving corporation of such consolidation or merger, or (b)
shall permit any other Person to consolidate with or merge into
the Company and the Company shall be the continuing or surviving
Person but, in connection with such consolidation or merger,
Common Stock or Other Securities shall be changed into or
exchanged for cash, stock or other securities of any other Person
or any other property, or (c) shall transfer all or substantially
all of its properties and assets to any other Person, or (d)
shall effect a capital reorganization or reclassification of
Common Stock or Other Securities (other than a capital
reorganization or reclassification resulting in the issue of
Additional Shares of Common Stock for which adjustment in the
Warrant Price is provided in section 2.2.1 or 2.2.2), then, and
in the case of each such transaction, the Company shall give
written notice thereof to each holder of any Warrant not less
than 30 days prior to the consummation thereof and proper
provision shall be made so that, upon the basis and the terms and
in the manner provided in this section 3, the holder of this
Warrant, upon the exercise hereof at any time after the
consummation of such transaction, shall be entitled to receive,
at the aggregate Warrant Price in effect at the time of such
consummation for all Common Stock (or other Securities) issuable
upon such exercise immediately prior to such consummation, in
lieu of the Common Stock (or Other Securities) issuable upon such
exercise prior to such consummation, either of the following, as
such holder shall elect by written notice to the Company on or
before the date immediately preceding the date of the consumma-
tion of such transaction (and, in the absence of such notice, the
provisions of subdivision (y) below shall be deemed to have been
elected by such holder):
(x) the highest amount of cash, securities or other
property to which such holder would actually have been
entitled as a shareholder upon such consummation if such
holder had exercised this Warrant immediately prior thereto,
subject to adjustments (subsequent to such consummation) as
nearly equivalent as possible to the adjustments provided
for in section 2 and this section 3, provided that if a
purchase, tender or exchange offer shall have been made to
and accepted by the holders of Common Stock under
circumstances in which, upon completion of such purchase,
tender or exchange offer, the maker thereof, together with
members of any group (within the meaning of Section 13(d)(3)
of the Exchange Act) of which such maker is a part, and
together with any affiliate or associate of such maker
(within the meaning of Rule 12b-2 under the Exchange Act)
and any members of any such group of which any such
affiliate or associate is a part, own beneficially (within
the meaning of Rule 13d-3 under the Exchange Act) more than
50% of the outstanding shares of Common Stock, and if the
holder of this Warrant so designates in such notice given to
the Company, the holder of this Warrant shall be entitled to
receive the highest amount of cash, securities or other
property to which such holder would actually have been
entitled as a shareholder if the holder of this Warrant had
exercised this Warrant prior to the expiration of such
purchase, tender or exchange offer, accepted such offer and
all of the Common Stock held by such holder had been
purchased pursuant to such purchase, tender or exchange
offer, subject to adjustments (from and after the
consummation of such purchase, tender or exchange offer) as
nearly equivalent as possible to the adjustments provided
for in section 2 and this section 3; or
(y) the number of shares of Voting Common Stock (or
equivalent equity interests) of the Acquiring Person or, if
the Acquiring Person fails to meet, but its Parent meets,
the requirements set forth in the proviso below, of its
Parent, subject to adjustments (subsequent to such corporate
action) as nearly equivalent as possible to the adjustments
provided for in section 2 and this section 3, determined by
dividing (x) the product obtained by multiplying (A) the
number of shares of Common Stock (or Other Securities) to
which the holder of this Warrant would have been entitled
had such holder exercised this Warrant immediately prior to
the consummation of such transaction, times (B) the greater
of the Acquisition Price and the Warrant Price in effect on
the date immediately preceding the date of such
consummation, by (y) the Current Market Price per share of
the Voting Common Stock (or equivalent equity interests) of
the Acquiring Person or its Parent, as the case may be, on
the date immediately preceding the date of such
consummation.
3.2. Assumption of Obligations. Notwithstanding
anything contained in this Warrant or the Purchase Agreement to
the contrary, the Company will not effect any of the transactions
described in subdivisions (a) through (d) of section 3.1 unless,
prior to the consummation thereof, each Person (other than the
Company) which may be required to deliver any cash, stock or
other securities or other property upon the exercise of this
Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the holder of this
Warrant, (a) the obligations of the Company under this Warrant
(and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall
not release the Company from, any continuing obligations of the
Company under this Warrant) and (b) the obligation to deliver to
such holder such cash, stock or other securities or other
property as, in accordance with the foregoing provisions of this
section 3, such holder may be entitled to receive, and such
Person shall have similarly delivered to such holder an opinion
of counsel for such Person, which counsel shall be reasonably
satisfactory to such holder, stating that this Warrant shall
thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of section
2 and this section 3) shall be applicable to the cash, stock or
other securities or other property which such Person may be
required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto. Nothing in this section
3 or in section 7 shall be deemed to authorize the Company to
enter into any transaction not otherwise permitted by the
Purchase Agreement.
4. Other Dilutive Events. In case any event shall
occur as to which the provisions of section 2 or section 3 are
not strictly applicable but the failure to make any adjustment
would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles of
such sections, then, in each such case, the Company shall appoint
a firm of independent public accountants of recognized national
standing (which may be the regular auditors of the Company),
which shall give their opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles
established in sections 2 and 3, necessary to preserve, without
dilution, the purchase rights represented by this Warrant. Upon
receipt of such opinion the Company will promptly mail a copy
thereof to the holder of this Warrant and shall make the
adjustments described therein.
5. No Dilution or Impairment. The Company will not,
by amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities (other than the shares
of Common Stock and Preferred Stock issued on the date of the
Closing under the Purchase Agreement and any securities issued
upon conversion or exchange thereof) or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in
order to protect the rights of the holder of this Warrant against
dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not permit the par value of
any shares of stock receivable upon the exercise of this Warrant
to exceed the amount payable therefor upon such exercise, (b)
will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid
and nonassessable shares of stock upon the exercise of all of the
Warrants from time to time outstanding, (c) will not take any
action which results in any adjustment of the Warrant Price if
the total number of shares of Common Stock (or Other Securities)
issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock
(or other Securities) then authorized by the Company's
certificate of incorporation and available for the purpose of
issue upon such exercise and, (d) will not issue any capital
stock of any class which has the right to more than one vote per
share or which is preferred as to dividends or as to the dis-
tribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless such stock is sold for a cash
consideration at least equal to the amount of its preference upon
voluntary or involuntary dissolution, liquidation or winding-up
and the rights of the holders thereof shall be limited to a fixed
percentage (not exceeding 15%) of such cash consideration in
respect of participation in dividends.
6. Accountants' Report as to Adjustments. In each
case of any adjustment or readjustment in the shares of Common
Stock (or Other Securities) issuable upon the exercise of the
Warrants, the Company at its expense will promptly compute such
adjustment or readjustment in accordance with the terms of the
Warrants and cause independent public accountants of recognized
national standing selected by the Company (which may be the
regular auditors of the Company) to verify such computation and
prepare a report setting forth such adjustment or readjustment
and showing in reasonable detail the method of calculation
thereof and the facts upon which such adjustment or readjustment
is based, including without limitation a statement of (a) the
consideration received or to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to
have been issued, (b) the number of shares of Common Stock
outstanding or deemed to be outstanding, and (c) the Warrant
Price in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by section 2) on account
thereof. The Company will forthwith mail a copy of each such
report to each holder of a Warrant and will, upon the written
request at any time of any holder of a Warrant, furnish to such
holder a like report setting forth the Warrant Price at the time
in effect and showing in reasonable detail how it was calculated.
The Company will also keep copies of all such reports at its
principal office and will cause the same to be available for
inspection at such office during normal business hours by any
holder of a Warrant or any prospective purchaser of a Warrant
designated by the holder thereof.
7. Notices of Corporate Action. In the event of
(a) any taking by the Company of a record of the
holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive
any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or
to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of
the Company or any consolidation or merger involving the
Company and any other Person or any transfer of all or
substantially all the assets of the Company to any other
Person, or
(c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to each holder of a Warrant a notice
specifying (x) the date or expected date on which any such record
is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend,
distribution or right, and (y) the date or expected date on which
any such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place and the time, if any such time is to
be fixed, as of which the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of
Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least
20 days prior to the date therein specified, in the case of any
date referred to in the foregoing subdivision (x), and at least
90 days prior to the date therein specified, in the case of the
date referred to in the foregoing subdivision (y).
8. Restrictions on Transfer. 8.1. Restrictive
Legends. Except as otherwise permitted by this section 8, each
Warrant originally issued pursuant to the Purchase Agreement and
each Warrant issued upon direct or indirect transfer or in
substitution for any Warrant pursuant to section 12 shall be
stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant and any shares acquired upon the exercise of
this Warrant have not been registered under the Securities
Act of 1933 and may not be transferred in the absence of
such registration or an exemption therefrom under such Act.
This Warrant and such shares are also subject to certain
restrictions on transferability imposed by a certain
Stockholders' Agreement, a copy of which is on file at the
offices of the Company."
Except as otherwise permitted by this section 8, each certificate
for Common Stock (or Other Securities) issued upon the exercise
of any Warrant and each certificate issued upon the direct or
indirect transfer of any such Common Stock (or Other Securities)
shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred in the absence of such registration or an
exemption therefrom under such Act. Such shares are also
subject to certain restrictions on transferability imposed
by Common Stock Purchase Warrants expiring December 21, 2002
and by a certain Stockholders' Agreement, copies of which
are on file at the offices of the Company."
8.2. Notice of Proposed Transfer; Opinions of Counsel.
Prior to any transfer of any Restricted Securities which are not
registered under an effective registration statement under the
Securities Act (other than a transfer pursuant to Rule 144 or any
comparable rule under such Act), the holder thereof will give
written notice to the Company of such holder's intention to
effect such transfer and to comply in all other respects with
this section 8.2. Each such notice (a) shall describe the manner
and circumstances of the proposed transfer in sufficient detail
to enable counsel to render the opinions referred to below, and
(b) shall designate counsel for the holder giving such notice
(who may be internal counsel for such holder). The holder giving
such notice will submit a copy thereof to the counsel designated
in such notice and the Company will promptly submit a copy
thereof to its counsel. The following provisions shall then
apply:
(x) If in the opinion of each such counsel the
proposed transfer may be effected without registration, such
holder shall thereupon be entitled to transfer such
Restricted Securities in accordance with the terms of the
notice delivered by such holder to the Company. Each
Warrant or certificate, if any, issued upon or in connection
with such transfer shall bear the appropriate restrictive
legend set forth in section 8.1 unless, in the opinion of
each such counsel, such legend is no longer required to
insure compliance with the Securities Act. If for any
reason counsel for the Company shall fail to deliver to the
Company an opinion upon such matters, or the Company shall
fail to notify such holder thereof, within 15 days after
counsel for such holder shall have delivered its opinion
upon such matters to such holder (with a copy to the
Company), then for all purposes of such Restricted
Securities the opinion for the Company shall be deemed to be
the same as the opinion of counsel for such holder.
(y) If the opinion of either or both such counsel is
not to the effect that the proposed transfer may legally be
effected without registration of such Restricted Securities
under the Securities Act (such opinion or opinions to state
the basis of the legal conclusions reached therein), the
Company will promptly so notify the holder thereof and
thereafter such holder shall not be entitled to transfer
such Restricted Securities (other than in a transfer
pursuant to Rule 144 or any comparable rule under the
Securities Act) until the conditions specified in
subdivision (x) above shall be satisfied or until
registration of such Restricted Securities under the
Securities Act has become effective.
Notwithstanding the foregoing provisions of this section 8.2, the
holder of any Restricted Securities shall be permitted to
transfer any such Restricted Securities pursuant to Rule 144A
under the Securities Act, provided that each transferee agrees in
writing to be bound by all the restrictions on transfer of such
Restricted Securities contained in this section 8.2. The Company
and the holder of Restricted Securities will pay the fees and
disbursements of their respective counsel in connection with all
opinions rendered by them pursuant to this section 8.2 and
pursuant to section 8.3.
8.3. Termination of Restrictions. The restrictions
imposed by this section 8 upon the transferability of Restricted
Securities shall cease and terminate as to any particular
Restricted Securities (a) when such securities shall have been
effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering such
Restricted Securities, (b) when, in the opinions of both counsel
for the holder thereof and counsel for the Company, such restric-
tions are no longer required in order to insure compliance with
the Securities Act, or (c) when such securities have been
beneficially owned, by a person who has not been an affiliate of
the Company for at least three months, for a period of at least
three years, all as determined under Rule 144 under the
Securities Act. Whenever such restrictions shall terminate as to
any Restricted Securities, as soon as practicable thereafter and
in any event within five days, the holder thereof shall be
entitled to receive from the Company, without expense (other than
transfer taxes, if any), new securities of like tenor not bearing
the applicable legend set forth in section 8.1 hereof.
9. Registration under Securities Act. The holders of
Registrable Securities shall have the rights with respect to the
registration of Registrable Securities set forth in Exhibit B
(Registration Rights) of the Stockholders' Agreement.
10. Financial Information. 10.1. Financial
Statements. Until the occurrence of an IPO, the Company will
deliver to each holder of Registrable Securities:
(a) within 45 days after the end of each of the first
three quarterly fiscal periods in each fiscal year of the
Company, consolidated balance sheets of the Company and its
Subsidiaries as at the end of such period and the related
consolidated statements of income, stockholders' equity and
cash flows of the Company and its Subsidiaries for such
period and (in the case of the second and third quarterly
periods) for the period from the beginning of the current
fiscal year to the end of such quarterly period, setting
forth in each case in comparative form the consolidated
figures for the corresponding periods of the previous fiscal
year, all in reasonable detail and certified by a principal
financial officer of the Company as presenting fairly, in
accordance with generally accepted accounting principles
(except for the absence of notes thereto) applied (except as
specifically set forth therein) on a basis consistent with
such prior fiscal periods, the information contained
therein, subject to changes resulting from normal year-end
audit adjustments;
(b) within 90 days after the end of each fiscal year
of the Company, consolidated balance sheets of the Company
and its Subsidiaries as at the end of such year and the
related consolidated statements of income, stockholders'
equity and cash flows of the Company and its Subsidiaries
for such fiscal year, setting forth in each case in compara-
tive form the consolidated figures for the previous fiscal
year, all in reasonable detail and accompanied by a report
thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public
accountants of recognized national standing selected by the
Company and reasonably satisfactory to the Requisite
Holders, which report shall state that such consolidated
financial statements present fairly the financial position
of the Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated in conformity with generally
accepted accounting principles applied on a basis consistent
with prior years (except as otherwise specified in such
report) and that the audit by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(c) in addition to the financial statements required
by subdivisions (a) and (b) of this section 10.1, within 30
days after the end of each month, consolidated balance
sheets of the Company and its Subsidiaries as at the end of
such month and the related consolidated statements of
income, stockholders' equity and cash flows of the Company
and its Subsidiaries for such month and (in the case of the
second through twelfth month of the fiscal year) for the
period from the beginning of the current fiscal year to the
end of such month, setting forth in each case in comparative
form the consolidated figures for the corresponding periods
of the previous fiscal year, all in reasonable detail and
certified by a principal financial officer of the Company as
presenting fairly, in accordance with generally accepted
accounting principles (except for the absence of notes
thereto) applied (except as specifically set forth therein)
on a basis consistent with such prior fiscal periods, the
information contained therein, subject to changes resulting
from normal year-end audit adjustments; and
(d) promptly upon their becoming available, copies of
all financial statements, reports, notices and proxy
statements sent or made available generally by the Company
to its security holders, of all regular and periodic reports
and all registration statements and prospectuses filed by
the Company or any Subsidiary with any securities exchange
or with the Commission, and of all press releases and other
statements made available generally by the Company or any
Subsidiary to the public concerning material developments in
the business of the Company or its Subsidiaries.
10.2. Availability of Information. The Company will
cooperate with each holder of any Restricted Securities in
supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale
of any Restricted Securities.
11. Reservation of Stock, etc. The Company will at
all times reserve and keep available, solely for issuance and
delivery upon exercise of the Warrants, the number of shares of
Common Stock (or Other Securities) from time to time issuable
upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) shall be duly
authorized and, when issued upon such exercise, shall be validly
issued and, in the case of shares, fully paid and nonassessable,
with no liability on the part of the holders thereof.
12. Ownership, Transfer and Substitution of Warrants.
12.1. Ownership of Warrants. The Company may treat the person
in whose name any Warrant is registered on the register kept at
the principal office of the Company as the owner and holder
thereof for all purposes, notwithstanding any notice to the
contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated
to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. Subject to
section 8 a Warrant, if properly assigned, may be exercised by a
new holder without first having a new Warrant issued.
12.2. Transfer and Exchange of Warrants. Upon the
surrender of any Warrant, properly endorsed, for registration of
transfer or for exchange at the principal office of the Company,
the Company at its expense will (subject to compliance with
section 8, if applicable) execute and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like
tenor, in the name of such holder or as such holder (upon payment
by such holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces
of the Warrant or Warrants so surrendered.
12.3. Replacement of Warrants. Upon receipt of
evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of any Warrant and, in the case
of any such loss, theft or destruction of any Warrant held by a
Person other than the Purchaser or any institutional investor,
upon delivery of indemnity reasonably satisfactory to the Company
in form and amount or, in the case of any such mutilation, upon
surrender of such Warrant for cancellation at the principal
office of the Company, the Company at its expense will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
13. Definitions. As used herein, unless the context
otherwise requires, the following terms have the following
respective meanings:
Acquiring Person: the continuing or surviving
corporation of a consolidation or merger with the Company (if
other than the Company), the transferee of substantially all of
the properties and assets of the Company, the corporation
consolidating with or merging into the Company in a consolidation
or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other
Person or cash or any other property, or, in the case of a
capital reorganization or reclassification, the Company.
Acquisition Price: as applied to the Common Stock, with
respect to any transaction to which section 3 applies, (a) the
price per share equal to the greater of the following, determined
in each case as of the date immediately preceding the date of
consummation of such transaction: (x) the Market Price of the
Common Stock and (y) the highest amount of cash plus the Fair
Value of the highest amount of securities or other property which
the holder of this Warrant would have been entitled as a
shareholder to receive upon such consummation if such holder had
exercised this Warrant immediately prior thereto, or (b) if a
purchase, tender or exchange offer is made by the Acquiring
Person (or by any of its affiliates) to the holders of the Common
Stock and such offer is accepted by the holders of more than 50%
of the outstanding shares of Common Stock, the greater of (i) the
price determined in accordance with the foregoing subdivision (a)
and (ii) the price per share equal to the greater of the
following, determined in each case as of the date immediately
preceding the acceptance of such offer by the holders of more
than 50% of the outstanding shares of Common Stock: (A) the
Market Price of the Common Stock and (B) the highest amount of
cash plus the Fair Value of the highest amount of securities or
other property which the holder of this Warrant would be entitled
as a shareholder to receive pursuant to such offer if such holder
had exercised this Warrant immediately prior to the expiration of
such offer and accepted the same.
Additional Shares of Common Stock: all shares
(including treasury shares) of Common Stock issued or sold (or,
pursuant to section 2.3 or 2.4, deemed to be issued) by the
Company after the Initial Date hereof, whether or not
subsequently reacquired or retired by the Company, other than (a)
shares of Common Stock issued upon the exercise of Warrants, (b)
shares of Common Stock issued upon the exercise of shares of the
Series B Preferred Stock issued on the Initial Date, (c) the
shares of Common Stock issued upon the conversion of the Series B
Convertible Preferred Stock, par value $.001 per share, of the
Company and (d) the shares of Common Stock and Preferred Stock
issued on the date of the Closing under the Purchase Agreement
and any securities issued upon conversion or exchange thereof.
Business Day: any day other than a Saturday or a Sunday
or a day on which commercial banking institutions in the City of
New York are authorized by law to be closed, provided that, in
determining the period within which certificates or Warrants are
to be issued and delivered pursuant to section 1.3 at a time when
shares of Common Stock (or Other Securities) are listed or
admitted to trading on any national securities exchange or in the
over-the-counter market and in determining the Market Price of
any securities listed or admitted to trading on any national
securities exchange or in the over-the-counter market, "Business
Day" shall mean any day when the principal exchange in which
securities are then listed or admitted to trading is open for
trading or, if such securities are traded in the over-the-counter
market in the United States, such system is open for trading, and
provided, further, that any reference to "days" (unless Business
Days are specified) shall mean calendar days.
Class A Common Stock: the Company's Class A Common
Stock, par value $.001 per share, as constituted on the date
hereof and any stock into which such Class A Common Stock shall
have been changed or any stock resulting from any reclassi-
fication of such Class A Common Stock.
Class B Common Stock: the Company's Class B Common
Stock, par value $.001 per share, as constituted on the date
hereof and any stock into which such Class B Common Stock shall
have been changed or any stock resulting from any reclassi-
fication of such Class B Common Stock.
Class C Common Stock: the Company's Class C Common
Stock, par value $.001 per share, as constituted on the date
hereof and any stock into which such Class C Common Stock shall
have been changed or any stock resulting from any reclassi-
fication of such Class C Common Stock.
Commission: the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities
Act or the Exchange Act, whichever is the relevant statute for
the particular purpose.
Common Stock: the Class A Common Stock, the Class B
Common Stock, the Class C Common Stock and all other stock of any
class or classes (however designated) of the Company (other than
the Warrants) the holders of which have the right, without
limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to
preference.
Company: GMH Holdings, Inc., a Delaware corporation.
Convertible Securities: any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities
directly or indirectly convertible into or exchangeable for
Additional Shares of Common Stock.
Current Market Price: on any date specified herein, (a)
with respect to Common Stock or to Voting Common Stock (or
equivalent equity interests) of an Acquiring Person or its
Parent, (x) the average daily Market Price during the period of
the most recent 20 consecutive Business Days ending on such date,
or (y) if shares of Common Stock or such Voting Common Stock (or
equivalent equity interests), as the case may be, are not then
listed or admitted to trading on any national securities exchange
and if the closing bid and asked prices thereof are not then
quoted or published in the over-the-counter market, the Market
Price on such date; and (b) with respect to any other securities,
the Market Price on such date.
Eligible Holder: a holder of this Warrant that is not
The Equitable Life Assurance Society of the United States or an
insurance company affiliate thereof.
Exchange Act: the Securities Exchange Act of 1934, or
any similar Federal statute, and the rules and regulations of the
commission thereunder, all as the same shall be in effect at the
time of determination.
Fair Value: with respect to any securities or other
property, the fair value thereof as of a date which is within 15
days after the date as of which the determination is to be made
(a) determined by an agreement between the Company and the
Requisite Holders or (b) if the Company and the Requisite Holders
fail to agree, determined jointly by a nationally recognized
independent investment banking or a nationally recognized
securities valuation firm retained by the Company and by a
nationally recognized independent investment banking or a
nationally recognized securities valuation firm retained by the
Requisite Holders, either of which firms may be an independent
investment banking or securities valuation firm regularly
retained by the Company or any such holder or (c) if the Company
or such holders shall fail so to retain an independent investment
banking or securities valuation firm within ten Business Days
after the retention of such firm by such holders or the Company,
as the case may be, determined solely by the firm so retained or
(d) if the firms so retained by the Company and by such holders
shall be unable to reach a joint determination within 15 Business
Days after the retention of the last firm so retained, determined
by another nationally recognized independent investment banking
or nationally recognized securities valuation firm which is not a
regular investment banking or securities valuation firm of the
Company or any such holder chosen by the first two such firms.
Initial Date: the meaning specified in section 2.2.
Market Price: on any date specified herein, (a) with
respect to Common Stock, or with respect to Voting Common Stock
(or equivalent equity interests) of an Acquiring Person or its
Parent, the amount per share equal to (x) the last sale price of
shares of such security, regular way, 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 same are then listed or admitted to trading, or (y) if no
shares of such security are then listed or admitted to trading on
any national securities exchange but such security is designated
as a national market system security by the NASD, the last
trading price of such security on such date, or if such security
is not so designated, the average of the reported closing bid and
asked prices thereof on such date as shown by the NASDAQ system
or, if no shares thereof are then quoted in such system, as
published by the National Quotation Bureau, Incorporated or any
successor organization, and in either case as reported by any
member firm of the New York Stock Exchange selected by the
Company, or (z) if no shares of such security are then listed or
admitted to trading on any national exchange or designated as a
national market system security and if no closing bid and asked
prices thereof are then so quoted or published in the over-the-
counter market, the higher of (x) the book value thereof as
determined by agreement between the Company and the Requisite
Holders, or if the Company and the Requisite Holders fail to
agree, by any firm of independent public accountants of
recognized standing selected by the Board of Directors of the
Company, as of the last day of any month ending within 60 days
preceding the date as of which the determination is to be made
and (y) the Fair Value thereof; and (b) with respect to any other
securities, the Fair Value thereof.
NASD: the National Association of Securities Dealers.
NASDAQ: the Automated Quotation System of the NASD.
Notes: the meaning specified in the opening paragraphs
of this Warrant.
Options: rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common
Stock or Convertible Securities.
Other Securities: any stock (other than Common Stock)
and other securities of the Company or any other Person
(corporate or otherwise) which the holders of the Warrants at any
time shall be entitled to receive, or shall have received, upon
the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 3 or otherwise.
Parent: as to any Acquiring Person, any corporation
which (a) controls the Acquiring Person directly or indirectly
through one or more intermediaries, (b) is required to include
the Acquiring Person in its consolidated financial statements
under generally accepted accounting principles and (c) is not
itself included in the consolidated financial statements of any
other Person (other than its consolidated subsidiaries).
Person: an individual, a partnership, an association, a
joint venture, a corporation, a limited liability company, a
business, a trust, an unincorporated organization or a government
or any department, agency or subdivision thereof.
Public Offering: any offering of Common Stock or Other
Securities, or any securities issued or issuable with respect to
any Common Stock or Other Securities by way of stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization
or otherwise, in each case to the public pursuant to an effective
registration statement under the Securities Act.
Purchase Agreement: the meaning specified in the
opening paragraphs of this Warrant.
Purchaser: the meaning specified in the opening
paragraphs of this Warrant.
Registrable Securities: (a) the Warrants, (b) any
shares of Common Stock or Other Securities issued or issuable
upon exercise of the Warrants and (c) any securities issued or
issuable with respect to any Common Stock or Other Securities
referred to in subdivision (b) by way of stock dividend or stock
split or in connection with a combination of shares, recapitali-
zation, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities
when (x) a registration statement with respect to the sale of
such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in accordance
with such registration statement, (y) they shall have been sold
as permitted under Rule 144 (or any successor provision) under
the Securities Act, or (z) they shall have ceased to be
outstanding.
Requisite Holders: the holders of more than 50% of (a)
the Warrants at the time outstanding determined on the basis of
the number of shares of Common Stock or Other Securities
deliverable upon exercise thereof and (b) as to any Warrants that
shall have been exercised, the number of shares of Common Stock
or Other Securities outstanding after giving effect to such
exercise; voting as a single class.
Restricted Securities: (a) any Warrants bearing the
applicable legend set forth in section 8.1, (b) any shares of
Common Stock (or Other Securities) which have been issued upon
the exercise of Warrants and which are required to be evidenced
by a certificate or certificates bearing the applicable legend
set forth in such section, and (c) unless the context otherwise
requires, any shares of Common Stock (or Other Securities) which
are at the time issuable upon the exercise of Warrants and which,
when so issued, will be required to be evidenced by a certificate
or certificates bearing the applicable legend set forth in such
section.
Securities Act: the Securities Act of 1933, or any
similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time of determination.
Series B Preferred Stock: the Series B Convertible
Preferred Stock, par value $.001 per share, of the Company.
Stockholders' Agreement: the Stockholders' Agreement,
dated as of December 21, 1995, among the Company and the
Stockholders signatory thereof.
Subsidiary: any corporation, association or other
business entity a majority (by number of votes) of the Voting
Common Stock of which is at the time owned by the Company or by
one or more Subsidiaries or by the Company and one or more
Subsidiaries.
Transfer: unless the context otherwise requires, any
sale, assignment, transfer, pledge, hypothecation, mortgage,
charge, lien, encumbrance gift, bequest, transmission or other
disposition of any security, provided that the encumbrances
contemplated by, and transfers of securities pursuant to the
terms and provisions of, the Stockholders' Agreement shall not be
deemed to be "transfers".
Voting Common Stock: with respect to any corporation,
association or other business entity, stock of any class or
classes (or equivalent interest), if the holders of the stock of
such class or classes (or equivalent interests) are ordinarily,
in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or persons performing
similar functions) of such corporation, association or business
entity, even if the right so to vote has been suspended by the
happening of such a contingency.
Warrant Price: the meaning specified in section 2.1.
Warrants: the meaning specified in the opening
paragraphs of this Warrant.
14. Remedies. The Company stipulates that the
remedies at law of the holder of this Warrant in the event of any
default or threatened default by the Company in the performance
of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a
decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the
terms hereof or otherwise.
15. No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be construed as conferring upon
the holder hereof any rights as a stockholder of the Company or
as imposing any liabilities on such holder to purchase any
securities or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors or
stockholders of the Company or otherwise.
16. Notices. All notices and other communications
under this Warrant shall be in writing and shall be mailed by
registered or certified mail, return receipt requested, addressed
(a) if to any holder of any Warrant or any holder of any Common
Stock (or Other Securities), at the registered address of such
holder as set forth in the register kept at the principal office
of the Company, or (b) if to the Company, to the attention of its
Chief Financial Officer at its principal office, provided that
the exercise of any Warrant shall be effected in the manner
provided in section 1.
17. Expiration; Notice. The right to exercise this
Warrant shall expire at 3:00 P.M., New York City time, December
21, 2002.
18. Miscellaneous. This Warrant and any term hereof
may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is
sought. The agreements of the Company contained in this Warrant
other than those applicable solely to the Warrants and the
holders thereof shall inure to the benefit of and be enforceable
by any holder or holders at the time of any Common Stock (or
Other Securities) issued upon the exercise of Warrants, whether
so expressed or not. This Warrant shall be construed and
enforced in accordance with and governed by the laws of the State
of New York. The section headings in this Warrant are for
purposes of convenience only and shall not constitute a part
hereof.
GMH HOLDINGS, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
FORM OF SUBSCRIPTION
(To be executed only upon exercise of Warrant)
To _________________
The undersigned registered holder of the within
Warrant hereby irrevocably exercises such Warrant for, and
purchases thereunder, __________ shares of Class A Common Stock
and __________ shares of Class B Common Stock of GMH HOLDINGS,
INC., a Delaware corporation, and herewith makes payment of
$_________ therefor [by application pursuant to section 1.5 of
such Warrant of $________ aggregate principal amount of Notes (as
defined in such Warrant) plus $ _______ accrued interest
thereon], and requests that the certificates for such shares be
issued in the name of, and delivered to ______________, whose
address is ______________.
Dated: ________________
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant)
[insert address]
FORM OF ASSIGNMENT
(To be executed only upon transfer of Warrant)
For value received, the undersigned registered holder
of the within Warrant hereby sells, assigns and transfers unto
_____________________ the right represented by such Warrant to
purchase __________ shares of Common Stock of GMH HOLDINGS, INC.,
a Delaware corporation, to which such Warrant relates, and
appoints ______________ Attorney to make such transfer on the
books of __________ maintained for such purpose, with full power
of substitution in the premises.
Dated: ________________
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant)
[insert address]
Signed in the presence of: