OVERHILL FARMS, INC. WARRANT TO PURCHASE 100 SHARES OF COMMON STOCK
EXHIBIT 99.10
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION.
| WARRANT NO. LL-4 |
Originally Issued September 11, 2002 | |
| Restated Upon Partial Exercise | ||
| as of December 13, 2002 |
OVERHILL FARMS, INC.
WARRANT TO PURCHASE 100 SHARES OF COMMON STOCK
FOR VALUE RECEIVED, OVERHILL FARMS, INC., a Nevada corporation (the “Company”), hereby certifies that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS II, L.P., a California limited partnership
(“LLCP”), or its assigns (collectively, the “Holder”), is entitled to purchase, on the terms and subject to the conditions contained herein, 100 shares (as such number of shares may be adjusted from time to time,
the “Warrant Shares”) of common stock, par value $0.01 per share, of the Company (“Common Stock”), at an exercise price of $0.0000008 per Warrant Share (the “Warrant Purchase Price”) at any time and
from time to time during the Exercise Period (as such term is defined below). The number of Warrant Shares issuable upon exercise of this Warrant (No. LL-4) to Purchase 100 Shares of Common Stock (this “Warrant”) and the Warrant
Purchase Price shall be subject to adjustment from time to time as provided herein.
This Warrant is being issued
under Section 2.1 of the Fifth Amendment Warrant in connection with the partial exercise by LLCP of the Fifth Amendment Warrant. The Fifth Amendment Warrant was originally issued pursuant to that certain Fifth Amendment to Securities Purchase
Agreement dated as of September 11, 2002, as amended and restated pursuant to that certain Amended and Restated Securities Purchase Agreement dated as of October 29, 2002 (as amended from time to time, the “Securities Purchase
Agreement”) by and among the Company, the entities from time to time parties thereto as Guarantors and LLCP. This Warrant restates the Fifth Amendment Warrant with respect to the number of Warrant Shares which remain unexercised and is
deemed a continuation of, and constitutes, the Fifth Amendment Warrant.
This Warrant is subject to the following
terms and conditions:
1. DEFINITIONS. Unless otherwise
indicated in this Warrant, capitalized terms used and not otherwise defined in this Warrant have the meanings ascribed to them in
the Securities Purchase Agreement. In addition, the following capitalized terms have the following
meanings:
“Board of Directors” means the Board of Directors of the Company.
“Common Stock” has the meaning set forth in the preamble.
“Company” has the meaning set forth in the preamble.
“Convertible Securities” means, when used in this Agreement, any securities or other obligations issued or issuable by the Company or any other Person that
are exercisable or exchangeable for, or convertible into, any Capital Stock of the Company.
“Current
Market Price” per share of Common Stock means, as of any specified date on which the Common Stock is publicly traded, the average of the daily market prices of the Common Stock over the twenty (20) consecutive trading days immediately
preceding (and not including) such date. The ‘daily market price’ for each such trading day shall be (i) the closing sales price on such day on the principal securities exchange on which the Common Stock is then listed or admitted to
trading or on Nasdaq, as applicable, (ii) if no sale takes place on such day on any such securities exchange or system, the average of the closing bid and asked prices, regular way, on such day for the Common Stock as officially quoted on any such
securities exchange or system, (iii) if the Common Stock is not then listed or admitted to trading on any securities exchange or system, the last reported sale price, regular way, on such day for the Common Stock, or if no sale takes place on such
day, the average of the closing bid and asked prices for the Common Stock on such day, as reported by Nasdaq or the National Quotation Bureau, and (iv) if the Common Stock is not then listed or admitted to trading on any securities exchange and if
no such reported sale price or bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reputable quotation service, or a newspaper of general circulation in the City of Los Angeles,
State of California, customarily published on each Business Day. If the daily market price cannot be determined for the twenty (20) consecutive trading days immediately preceding such date in the manner specified in the foregoing sentence, then the
Common Stock shall not be deemed to be publicly traded as of such date.
“Designated Office”
means, at any time, the principal executive offices of the Company at such time.
“Dilutive
Issuance” has the meaning set forth in Section 3.8(g).
“Dispute Notice” has the
meaning set forth in the definition of Fair Market Value.
“DOJ” has the meaning set forth in
Section 2.3.
“Equity Repurchase Option Agreement” means that certain Equity Repurchase
Option Agreement dated as of September 11, 2002, between the Company and LLCP, as amended from time to time.
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“Excluded Securities” means, collectively, (i) any shares of
Common Stock or Option Rights issued in any of the transactions described in Sections 3.1, 3.2, 3.3 or 3.5, (ii) shares of Common Stock issued upon exercise, exchange or conversion of (A) any Option Rights outstanding on
the date hereof or (B) any Option Rights issued after the date hereof for which an adjustment is made pursuant to Section 3.4 or for which no adjustment is required to be made under Section 3.4, (iii) any Warrant Shares, (iv) any
Warrant Shares (as such term is defined in the November 1999 Warrant), (v) shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock beneficially owned by the Holder and (vi) shares of Common Stock issued pursuant to
a bona fide public offering pursuant to an effective registration statement declared effective by the Commission under the Securities Act.
“Exercise Notice” has the meaning set forth in Section 2.1.
“Exercise Period” means the period commencing on the date hereof and ending on (and including) the Expiration Date.
“Expiration Date” means September 11, 2012.
“Fair Market Value” per Warrant Share (or share of Common Stock) means, as of any specified date:
(i) if the Common Stock is publicly traded on such date, the greater of (x) the Current Market Price per share as of such date and (y) a price per share equal to the Formula-Based Repurchase Price;
provided, however, that, for purposes of calculating the Formula-Based Repurchase Price, the “Measurement Date” shall be the last day of the calendar month immediately preceding the calendar month in which the Exercise Notice
is delivered; or
(ii) if the Common Stock is not publicly traded (or deemed not to be publicly
traded) on such date, a price per share equal to the Formula-Based Repurchase Price; provided, however, that, for purposes of calculating the Formula-Based Repurchase Price, the “Measurement Date” shall be the last day of the
calendar month immediately preceding the calendar month in which the Exercise Notice is delivered.
Whenever the
Company is required or permitted to make a determination of the Fair Market Value of a Warrant Share (or share of Common Stock), the Holder may challenge or otherwise dispute such determination. If the Holder wishes to challenge or otherwise dispute
such determination, it shall furnish a written notice to the Company to such effect (a “Dispute Notice”). If the Holder delivers a Dispute Notice to the Company and, thereafter, the Company and the Holder cannot resolve the dispute
within ten (10) days after delivery of the Dispute Notice, Fair Market Value shall be determined by an independent certified public accounting firm of recognized national standing selected by the mutual written agreement of the Company and the
Holder; provided, however, that if the Company and the Holder are unable to mutually select such accounting firm within ten (10) days after the date upon which the right or obligation to select an accounting firm arises, each of the
Company and the Holder shall, within three (3) Business Days thereafter, select
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one accounting firm, and the two (2) selected firms shall, within three (3) Business Days after their
selection, select a third accounting firm which shall make the relevant determination (which determination shall be final and binding upon the parties). Within thirty (30) days after its selection, the third accounting firm shall conduct a review of
the books and records of the Company and its Subsidiaries for purposes of determining the Fair Market Value and shall deliver to the Company and the Holder in writing its determination thereof, prepared in reasonable detail, and, if requested by
either party, the workpapers prepared in completing its review and determination thereof. All fees, costs and expenses incurred by the Company and the Holder in connection with any such determination, and any challenge or dispute thereof, shall be
paid by the Company; provided, however, that the Company and the Holder shall share equally all such fees, costs and expenses if, after the Holder delivers a Dispute Notice to the Company, the difference between Fair Market Value as
determined pursuant to the procedures set forth in this paragraph and Fair Market Value as determined by the Board of Directors is less than five percent (5.0%) of Fair Market Value as determined by the Board of Directors.
“Formula-Based Repurchase Price” has the meaning set forth in the Equity Repurchase Option Agreement.
“FTC” has the meaning set forth in Section 2.3.
“Holder” has the meaning set forth in the preamble.
“HSR Act” has the meaning set forth in Section 2.3.
“Option Rights” means, when used in this Warrant, any Convertible Securities, or any warrants, options or other rights to subscribe for or purchase, or obligations to issue, any Capital Stock of the Company,
including any options or similar rights issued or issuable under any employee stock option plan, pension plan or other employee benefit plan of the Company.
“Other Property” has the meaning set forth in Section 3.5.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder, all as the same shall be in effect at the time.
“Securities Purchase Agreement” has the meaning set forth in the preamble of this Warrant.
“Warrant” means this Warrant, any amendment of this Warrant, and any warrants issued upon transfer, division or
combination of, or in substitution for, this Warrant or any other such warrant. All such Warrants shall at all times be identical as to terms and conditions and date, except as to the number of Warrant Shares for which they may be exercised.
“Warrant Purchase Price” has the meaning set forth in the preamble of this Warrant (as adjusted
in accordance with the terms of this Warrant).
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“Warrant Shares”, when used in this Warrant, has the meaning set
forth in the preamble.
2. EXERCISE.
2.1 Exercise; Delivery of Certificates. Subject to the provisions of
Section 2.3, this Warrant may be exercised at the option of the Holder, in whole or in part, at any time and from time to time during the Exercise Period, by (a) delivering to the Company at the Designated Office (i) a Notice of Exercise, in
substantially the form attached as Exhibit A (the “Exercise Notice”), duly completed and signed by the Holder, and (ii) this Warrant, and (b) paying the Warrant Purchase Price pursuant to Section 2.2 for the number of
Warrant Shares being purchased. The Warrant Shares being purchased under this Warrant shall be deemed to have been issued to the Holder, as the record owner of such Warrant Shares, as of the close of business on the date on which payment therefor is
made by the Holder pursuant to Section 2.2. Certificates representing the Warrant Shares so purchased shall be delivered to the Holder within three (3) Business Days after this Warrant has been exercised (or, if applicable, after the
conditions set forth in Section 2.3 have been satisfied); provided, however, that in the case of a purchase of less than all of the Warrant Shares issuable upon exercise of this Warrant, the Company shall cancel this Warrant and
also, within three (3) Business Days after this Warrant has been surrendered, execute and deliver to the Holder a new Warrant of like tenor representing the number of unexercised Warrant Shares. Each certificate representing the number of Warrant
Shares issued or issuable upon exercise of this Warrant shall be registered in the name of the Holder or, subject to compliance with Applicable Law, such other name as shall be designated by the Holder.
2.2 Payment of Warrant Price. Payment of the Warrant Purchase Price
may be made, at the option of the Holder, by (i) certified or official bank check, (ii) cash or wire transfer, (iii) if the Fair Market Value of one Warrant Share is greater than the Exercise Price, instructing the Company to withhold and cancel a
number of Warrant Shares then issuable upon exercise of this Warrant with respect to which the excess of the Fair Market Value over the Warrant Purchase Price for such canceled Warrant Shares is at least equal to the Warrant Purchase Price for the
Warrant Shares being purchased (the “cashless exercise” procedures), (iv) surrendering to the Company shares of Common Stock previously acquired by the Holder with a Fair Market Value equal to the Warrant Purchase Price for the shares then
being purchased or (v) any combination of any of the foregoing. If the Holder elects to exercise this Warrant using the “cashless exercise” procedures set forth in clause (iii) above, the Warrant Shares being purchased thereby shall be
deemed to have been acquired by the Holder as of the date upon which the Exercise Notice is delivered to the Designated Office.
2.3 Antitrust Notification. If the Holder determines, in its sole judgment upon the advice of counsel, that an exercise of this Warrant pursuant to
the terms hereof would be subject to the provisions of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the Company shall, within seven (7) Business Days after receiving notice from the Holder of
the applicability of the HSR Act, file with the United States Federal Trade Commission (the “FTC”) and the United States Department of Justice (the “DOJ”) the notification and report form and any supplemental
information required to be filed by it pursuant to the HSR Act in connection with the exercise of this
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Warrant. Any such notification and report form and supplemental information will
be in full compliance with the requirements of the HSR Act. The Company will furnish to the Holder promptly (but in no event more than two (2) Business Days) such information and assistance as the Holder may reasonably request in connection with the
preparation of any filing or submission required to be filed by the Holder under the HSR Act. The Company shall respond promptly after receiving any inquiries or requests for additional information from the FTC or the DOJ (and in no event more than
three (3) Business Days after receipt of such inquiry or request). The Company shall keep the Holder apprised periodically and at the Holder’s request of the status of any communications with, and any inquiries or requests for additional
information from, the FTC or the DOJ. The Company shall bear all filing or other fees required to be paid by the Company and the Holder (or the “ultimate parent entity” of the Holder, if any) under the HSR Act or any other Applicable Law
in connection with such filings and all costs and expenses (including attorneys’ fees and expenses) incurred by the Company and the Holder in connection with the preparation of such filings and responses to inquiries or requests. In the event
that this Section 2.3 is applicable to any exercise of this Warrant, the purchase by the Holder of the Warrant Shares subject to the Exercise Notice, and the payment by the Holder of the Warrant Purchase Price, shall be subject to the
expiration or earlier termination of the waiting period under the HSR Act.
2.4 Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including
fractional shares) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a
fractional share, the Company shall, in lieu of issuance of any fractional share, pay to the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current Fair Market Value per Warrant
Share by such fraction.
3. ADJUSTMENTS TO THE NUMBER OF WARRANT SHARES AND TO THE
WARRANT PURCHASE PRICE. The number of Warrant Shares issuable upon exercise of this Warrant and the Warrant Purchase Price shall be subject to adjustment from time to time as set forth in this Section 3.
3.1 Stock Dividends, Subdivisions and
Combinations. If at any time the Company:
(a) pays a
dividend or other distribution on its Common Stock, without consideration, in shares of Common Stock or shares of any other class or series of Capital Stock,
(b) subdivides (by stock split, reclassification or otherwise) its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or
(c) combines (by reverse stock split or otherwise) its outstanding shares of
Common Stock into a smaller number of shares of Common Stock,
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then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior to the record date for such dividend or distribution or the effective date of such subdivision or combination shall be adjusted so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the kind and
number of shares of Common Stock that the Holder would have owned or have been entitled to receive immediately after such record date or effective date had this Warrant been exercised immediately prior to such record date or effective date. Any
adjustment made pursuant to this Section 3.1 shall become effective immediately after the effective date of such event, but be retroactive to the record date, if any, for such event.
Upon any adjustment of the number of Warrant Shares purchasable upon the exercise of this Warrant as herein provided, the Warrant Purchase Price per share
shall be adjusted by multiplying the Warrant Purchase Price immediately prior to such adjustment by a fraction, the numerator of which shall be the number of Warrant Shares purchasable upon the exercise of this Warrant immediately prior to such
adjustment and the denominator of which shall be the number of Warrant Shares so purchasable immediately thereafter.
3.2 Issuance of Option Rights. If at any time the Company issues or distributes (without payment of any consideration) to all holders of its Common Stock any Option
Rights, then the Company shall also issue or distribute such Option Rights to the Holder as if this Warrant had been exercised immediately prior to the record date for such issuance.
3.3 Distribution of Assets or Securities. If at any time the Company makes a distribution to its
stockholders (other than in connection with the liquidation, dissolution or winding up of the Company covered by Section 4.6) of any assets or securities other than those referred to in Sections 3.1, 3.2 or 3.5, the
Warrant Purchase Price shall be adjusted and shall be equal to the Warrant Purchase Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution multiplied
by a fraction (which shall not be less than zero), the numerator of which shall be the Fair Market Value per share of Common Stock on the date fixed for such determination, less the then fair market value of the portion of the assets, or the fair
market value of the portion of the securities, as the case may be, so distributed applicable to one share of Common Stock, and the denominator of which shall be the Fair Market Value per share of Common Stock. Such adjustment to the Warrant Purchase
Price shall become effective immediately prior to the opening of business on the day immediately following the date fixed for the determination of stockholders entitled to receive such distribution. Upon any adjustment in the Warrant Purchase Price
as provided in this Section 3.3, the number of shares of Common Stock issuable upon the exercise of this Warrant shall also be adjusted and shall be equal to the number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment multiplied by a fraction, the numerator of which is the Warrant Purchase Price in effect immediately prior to such adjustment and the denominator of which is the Warrant Purchase Price as so adjusted.
3.4 Issuance of Equity Securities at Less Than Fair Market
Value. If at any time the Company sells or issues any shares of Common Stock or Option Rights (excluding the Excluded Securities) at a price per share of Common Stock (determined in
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the case of Option Rights by dividing (x) the total amount receivable by the
Company in consideration of the sale and issuance of such Option Rights, plus the total consideration payable to the Company upon exercise, conversion or exchange thereof, by (y) the maximum number of shares of Common Stock issuable upon conversion,
exercise or exchange of such Option Rights), that is lower than the Fair Market Value per share of Common Stock in effect immediately prior to such sale and issuance, then the Warrant Purchase Price shall be adjusted (calculated to the nearest
$.001) so that it shall equal the price determined by multiplying the Warrant Purchase Price in effect immediately prior thereto by a fraction, the numerator of which shall be (A) the number of shares of Common Stock outstanding immediately prior to
such sale and issuance plus (B) the number of shares of Common Stock which the aggregate consideration received by the Company (determined as provided below) for such sale or issuance would purchase at such Fair Market Value per share, and
the denominator of which shall be (I) the total number of shares of Common Stock outstanding (or deemed to be outstanding as provided below) immediately after such sale or issuance plus (II) the number of shares of Common Stock or Option
Rights so issued. Adjustments shall be made successively whenever such an issuance is made.
For
the purposes of such adjustments, the shares of Common Stock which the holder of any such Option Rights shall be entitled to subscribe for or purchase shall be deemed to be issued and outstanding as of the date of the sale and issuance of such
Option Rights and the consideration received by the Company therefor shall be deemed to be the consideration actually received by the Company for such Option Rights, plus the consideration or premiums stated in such Option Rights to be paid
to acquire the shares of Common Stock covered thereby.
Upon any adjustment in the Warrant
Purchase Price as provided in the penultimate paragraph above, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall also be adjusted and shall be that number determined by multiplying the number of Warrant Shares
issuable upon exercise immediately prior to such adjustment by a fraction, the numerator of which is the Warrant Purchase Price in effect immediately prior to such adjustment and the denominator of which is the Warrant Purchase Price as so adjusted.
If at any time the Company sells and issues any shares of Common Stock or Option Rights
containing the right to subscribe for or purchase shares of Common Stock for a consideration consisting, in whole or in part, of property (other than cash or cash equivalents) or services, then in determining the “price per share of Common
Stock” and the “consideration received by the Company” for purposes of the preceding paragraphs of this Section 3.4, the Board of Directors shall determine, in good faith, the fair market value of such property or services,
subject to the Holder’s rights under Section 3.8(e). There shall be no adjustment of the Warrant Purchase Price in respect of the Common Stock pursuant to this Section 3.4 if the amount of such adjustment is less than $0.001 per
share of Common Stock; provided, however, that any adjustments which by reason of this provision are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
3.5 Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets. If at any time the Company reorganizes its capital, reclassifies its
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capital stock, consolidates, merges or combines with or into another Person
(where the Company is not the surviving corporation or where there is any change whatsoever in, or distribution with respect to, the outstanding Common Stock), or the Company sells, transfers or otherwise disposes of all or substantially all of its
property, assets or business to another Person, other than in a transaction provided for in Sections 3.1, 3.2, 3.3, 3.4 or 3.6, and, pursuant to the terms of such reorganization, reclassification, consolidation,
merger, combination, sale, transfer or other disposition of assets, (i) shares of common stock of the successor or acquiring Person or the Company (if it is the surviving corporation) or (ii) any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring Person or the Company (“Other Property”) are to be received by or
distributed to the holders of Common Stock who are holders immediately prior to such transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of Common Stock, common stock of the
successor or acquiring Person, and/or Other Property which a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event would have owned or received immediately after and as a result of such
event. In such event, the aggregate Warrant Purchase Price otherwise payable for the Warrant Shares issuable upon exercise of this Warrant shall be allocated among such securities and Other Property in proportion to the respective fair market values
of such securities and Other Property as determined in good faith by the Board of Directors, subject to the Holder’s rights under Section 3.8(e).
In case of any such event, the successor or acquiring Person (if other than the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as the Holder may approve in writing (and memorialized
by resolutions of the Board of Directors) in order to provide for adjustments of any shares of common stock of such successor or acquiring Person for which this Warrant thus becomes exercisable, which modifications shall be as equivalent as
practicable to the adjustments provided for in this Section 3.5. For purposes of this Section 3, “common stock of the successor or acquiring Person” shall include stock or other equity securities, or securities that are
exercisable or exchangeable for or convertible into equity securities, of such corporation, or other securities if such Person is not a corporation, of any class that is not preferred as to dividends or assets over any other class of stock of such
corporation or Person and that is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities that are convertible into or exchangeable for any such stock, either immediately or upon the
arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 3.5 shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers and other dispositions of assets.
3.6 Dissolution, Total Liquidation or Winding-Up. If at any time there is a voluntary or involuntary dissolution, total liquidation or winding-up of the Company, other than as
contemplated by Section 3.5, then the Company shall cause to be mailed (by registered or certified mail, return receipt requested, postage prepaid) to the Holder at the Holder’s address as shown on the Warrant register, at the earliest
practicable time (and, in
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any event, not less than thirty (30) calendar days before any date set for
definitive action), written notice of the date on which such dissolution, liquidation or winding-up shall take place, as the case may be. Such notice shall also specify the date as of which the record holders of shares of Common Stock shall be
entitled to exchange their shares for securities, money or other property deliverable upon such dissolution, liquidation or winding-up, as the case may be. On such date, the Holder shall be entitled to receive upon surrender of this Warrant the cash
or other property, less the Warrant Purchase Price for this Warrant then in effect, that the Holder would have been entitled to receive had this Warrant been exercised immediately prior to such dissolution, liquidation or winding-up. Upon receipt of
the cash or other property, any and all rights of the Holder to exercise this Warrant shall terminate in their entirety. If the cash or other property distributable in the dissolution, liquidation or winding-up has a fair market value which is less
than the Warrant Purchase Price for this Warrant then in effect, this Warrant shall terminate and be of no further force or effect upon the dissolution, liquidation or winding-up.
3.7 Other Dilutive Events. If any event occurs as to which the other provisions of this Section
3 are not strictly applicable but as to which the failure to make any adjustment would not protect the purchase rights represented by this Warrant in accordance with the intent and principles hereof, then, in each such case, the Holder may
appoint on behalf of the Company an investment banking or accounting firm of recognized national standing which shall give its opinion as to the adjustment, if any, on a basis consistent with the intent and principles established herein, necessary
to preserve the purchase rights represented by this Warrant. Upon receipt of such opinion, the Company will mail (by registered or certified mail, return receipt requested, postage prepaid) a copy thereof to the Holder within three (3) Business Days
and shall make the adjustments described therein. The fees and expenses of such investment banking or accounting firm shall be borne by the Company.
3.8 Other Provisions Applicable to Adjustments Under this Section. The following provisions shall be
applicable to the adjustments provided for pursuant to this Section 3:
(a) When Adjustments To Be Made. The adjustments required by this Section 3 shall be made whenever and as often as any specified event requiring such an adjustment shall occur. For the purpose of
any such adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence.
(b) Record Date. If the Company fixes a record date of the holders of Common Stock for the purpose of entitling them to (i) receive a dividend or other distribution payable
in shares of Common Stock or in shares of any other class or series of capital stock or securities convertible into or exchangeable for Common Stock or shares of any other class or series of capital stock or (ii) subscribe for or purchase shares of
Common Stock or such other shares or securities, then all references in this Section 3 to the date of the issuance or sale of such shares of Common Stock or such other shares or securities shall be deemed to be references to that record date.
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(c) When Adjustment Not Required. If
the Company fixes a record date of the holders of its Common Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights to which the provisions of Section 3.1 would apply, but shall,
thereafter and before the distribution to stockholders, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record
and any such adjustment previously made in respect thereof shall be rescinded and annulled.
(d) Notice of Adjustments. Whenever the number of shares of Common Stock for which this Warrant is exercisable or the Warrant Purchase Price shall be adjusted or recalculated pursuant to this Section
3, the Company shall immediately prepare a certificate to be executed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment or recalculation and the method by which such adjustment
or recalculation was calculated, specifying the number of shares of Common Stock for which this Warrant is exercisable and (if such adjustment was made pursuant to Section 3.5) describing the number and kind of any other shares of stock or
Other Property for which this Warrant is exercisable, and any related change in the Warrant Purchase Price, after giving effect to such adjustment, recalculation or change. The Company shall mail (by registered or certified mail, return receipt
requested, postage prepaid) a signed copy of the certificate to be delivered to the Holder within three (3) Business Days of the event which caused the adjustment or recalculation. The Company shall keep at the Designated Office copies of all such
certificates and cause them to be available for inspection at the Designated Office during normal business hours by the Holder or any prospective transferee of this Warrant designated by the Holder.
(e) Challenge to Good Faith Determination. Whenever the Board of Directors is required or
permitted to make a determination of fair market value under this Warrant, the Holder may challenge or dispute such determination. If the Holder wishes to challenge or dispute any such fair market value determination, it shall furnish written notice
to the Company of its intention to do so. If the Company and the Holder cannot resolve the dispute between or among themselves, then such dispute shall be submitted for final determination to an independent certified public accounting firm pursuant
to the procedures set forth in the last paragraph of the definition of Fair Market Value. All fees, costs and expenses incurred by the Company and the Holder in connection with any such determination, and any challenge or dispute thereof, shall be
paid by the Company; provided, however, that the Company and the Holder shall share equally all such fees, costs and expenses if, after the Holder delivers a Dispute Notice to the Company, the difference between (a) the fair market
value as determined pursuant to the procedures set forth in the last paragraph of the definition of Fair Market Value and (b) fair market value as determined by the Board of Directors is less than five percent (5.0%) of the fair market value
determined by the Board of Directors.
(f) Independent
Application. Except as otherwise provided herein, all subsections of this Section 3 are intended to operate independently of one another (but without duplication). If an event occurs that requires the application of
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more than one subsection, all applicable subsections shall be given independent effect without
duplication.
(g) Other Anti-Dilution Provisions. To the extent that
LLCP or any of its Affiliates holds this Warrant, in whole or in part, at any time the Company takes any action which results in an adjustment to the Warrant Purchase Price, or the number of shares of Common Stock issuable pursuant to this Warrant
(in either event, a “Dilutive Issuance”), then, to the extent that LLCP has exercised all or any portion of this Warrant prior to such time (including the partial exercise of this Warrant on or about the date of restatement and
issuance hereof), the Company shall immediately issue to LLCP upon such Dilutive Issuance, without the payment of any further consideration of any kind, such number of additional shares of Common Stock as shall equal the difference between (i) the
number of shares of Common Stock issuable upon the exercise of this Warrant to the extent held unexercised by LLCP at such time after giving effect to the adjustment resulting from such Dilutive Issuance and (ii) the number of shares of Common Stock
which would have been issuable upon exercise of this Warrant at such time after giving effect to the adjustment resulting from such Dilutive Issuance assuming this Warrant had not been exercised in any part (i.e., assuming this Warrant had
not been partially exercised on or about the date of restatement and issuance hereof).
4.
MISCELLANEOUS.
4.1 Restrictive
Legend. This Warrant and, unless registered under the Securities Act, any Warrant Shares issued upon exercise hereof shall bear a legend in substantially the following form (in addition to any legends required under
applicable state securities laws):
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION.
The legend shall be appropriately modified upon issuance of certificates for shares of Common Stock. Upon request of the holder of a Common Stock
certificate, the Company shall issue to that holder a new certificate free of the foregoing legend, if, with such request, such holder provides the Company with an opinion of counsel reasonably acceptable to the Company (provided that Irell
& ▇▇▇▇▇▇▇ LLP shall be deemed to be acceptable to the Company) to the effect that the securities evidenced by such certificate may be sold without restriction under Rule 144 (or any other rule permitting resales of securities without
restriction) promulgated under the Securities Act.
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4.2 Holder Entitled to Benefits Under Other
Agreements. The Holder shall be entitled to certain rights, benefits and privileges with respect to this Warrant and the Warrant Shares pursuant to the terms of the Securities Purchase Agreement, the Registration Rights Agreement (it
being understood that the Warrant Shares constitute “Registrable Securities” thereunder), the Investor Rights Agreement and certain other Investment Documents.
4.3 Other Covenants. Without limiting the generality of Section 4.2, the Company covenants and agrees that, so long as
this Warrant remains outstanding or any Warrant Shares are issuable upon exercise of this Warrant, the Company will perform and comply with all of the following covenants for the express benefit of the Holder: (a) the Warrant Shares have been duly
authorized and shall, upon issuance in accordance with the terms of this Warrant, be duly and validly issued, fully paid and non-assessable; (b) the Holder shall, upon the exercise of this Warrant in accordance with the terms hereof, receive good
and marketable title to the Warrant Shares, free and clear of all voting and other trust arrangements to which the Company is a party or by which it is bound, preemptive rights of any stockholder or any liens, encumbrances, equities and claims
whatsoever, including all Taxes, Liens and other charges with respect to the issuance thereof; (c) the Company shall reserve for issuance a sufficient number of authorized but unissued shares of Common Stock, or other securities or property for
which this Warrant may then be exercisable, to permit this Warrant (or if this Warrant has been divided, all outstanding Warrants) to be exercised in full; (d) the Company shall deliver to the Holder the information and reports described in Section
8.3 of the Securities Purchase Agreement as contemplated therein; (e) the Company shall extend to the Holder the investment monitoring and other rights set forth in the Investor Rights Agreement, provided that the rights set forth in
Section 1.1 of the Investor Rights Agreement with respect to Board of Director representation may not be assigned by LLCP to any assignee of this Warrant without the prior written consent of the Company; and (f) the Company shall provide each
Holder with notice of all corporate actions in the same manner and to the same extent as the shareholders of the Company.
4.4 Issue Tax. The issuance of shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder for any issue tax in respect thereof.
4.5 Closing Of Books. The Company will at no time close its transfer books against the
transfer of this Warrant or of any Warrant Shares in any manner which interferes with the timely exercise hereof.
4.6 No Voting Rights; Limitation Of Liability. Except as expressly set forth in this Warrant, nothing contained in this Warrant shall be construed as conferring upon the Holder (a) the right to vote or
consent as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matter, (b) the right to receive dividends, except as set forth in Section 3, or (c) any other rights as a stockholder
of the Company, except as provided in the Investor Rights Agreement. No provisions hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Warrant Purchase Price or as a shareholder of the Company, whether such liability is asserted by the Company or by its creditors.
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4.7 Modification And Waiver. This
Warrant and any of its provisions may be amended, changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement is sought.
4.8 Notices. All notices, requests, demands and other communications which are required or may be given under this Warrant
shall be in writing and shall be deemed to have been duly given if transmitted by telecopier with receipt acknowledged, or upon delivery, if delivered personally or by recognized commercial courier with receipt acknowledged, or upon the expiration
of seventy-two (72) hours after mailing, if mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
(a) If to the Holder, at:
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to any other Holder, at:
such Holder’s address as shown on the books of the Company.
(c) If to the Company, at:
Overhill Farms, Inc.
▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other
address or addresses as the Holder or the Company, as the case may be, may specify by written notice given in accordance with this Section 4.8.
4.9 Successors and Assigns. The Company may not assign any of its rights, or delegate any of its obligations, under this
Warrant without the prior written consent of the Holder (which consent may be withheld for any reason or no reason at all). Subject to the requirements of Applicable Law, the Holder may assign this Warrant, in whole or in part, at any time or from
time to time, without the consent of the Company. Each assignment of this Warrant shall be registered on the books of the Company to be maintained for such purpose upon surrender of this Warrant at the Designated Office, together with appropriate
instruments of assignment, duly completed and executed. Upon such surrender, the Company shall within three (3) Business Days, at its own expense, execute and deliver a new Warrant or Warrants in the name of the assignee or assignees specified in
such assignment and in the denominations specified therein and this Warrant shall promptly be canceled. If any portion of this Warrant is not being assigned, the Company shall, at its own expense, within three (3) Business Days issue to the Holder a
new
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Warrant evidencing the portion not so assigned. If the Holder assigns this
Warrant to one or more Persons, any decisions that the Holder is entitled to make at any time hereunder shall be made by the Holders holding more than fifty percent (50.0%) of the aggregate number of Warrant Shares issuable upon exercise of all of
the then exercisable Warrants.
This Warrant shall be binding upon and inure to the benefit of the
Company, the Holder and their respective successors and permitted assigns, and shall include, with respect to the Company, any Person succeeding the Company by merger, consolidation, combination or acquisition of all or substantially all of the
Company’s assets, and in such case, except as expressly provided herein and in the Securities Purchase Agreement, all of the obligations of the Company hereunder shall survive such merger, consolidation, combination or acquisition.
4.10 Captions; Construction and Interpretation. The headings in this
Warrant are for convenience of reference only, do not constitute a part of this Warrant and are not to be considered in construing or interpreting this Warrant. All section, preamble, recital, exhibit, schedule, clause and party references contained
in this Warrant are to this Warrant unless otherwise stated. Unless the context of this Warrant or any other Investment Document clearly requires otherwise, the use of the word “including” is not limiting and the use of the word
“or” has the inclusive meaning represented by the phrase “and/or.” References in this Warrant to any agreement, other document or law “as amended” or “as amended from time to time,” or amendments of any
document or law, shall include any amendments, supplements, restatements, replacements, renewals, refinancings, waivers or other modifications.
4.11 Lost Warrant or Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or of a
stock certificate evidencing any Warrant Shares and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of
this Warrant or a stock certificate, the Company shall make and deliver to the Holder, within three (3) Business Days of receipt by the Company of such documentation, a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
4.12 No
Impairment. The Company shall not by any action, including amending its charter documents or regulations or through any reorganization, reclassification, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value (if any) of any shares of Common Stock receivable
upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) 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 Common Stock upon the exercise of this Warrant, free and clear of all liens, encumbrances, equities and claims, and (iii) use its best efforts to obtain all such authorizations, exemptions or consents
from any public
15
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.
4.13 Governing
Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES.
4.14 Remedies. If the Company fails to perform, comply with or observe any covenant or agreement to be performed, complied with or observed by it under this Warrant, the
Holder may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Warrant or for an injunction against the breach of any such term or in aid of the exercise of any
power granted in this Warrant or to enforce any other legal or equitable right, or to take any one or more of such actions. The Company agrees to pay all fees, costs, and expenses, including fees and expenses of attorneys, accountants and other
experts retained by the Holder, and all fees, costs and expenses of appeals, incurred or expended by the Holder in connection with the enforcement of this Warrant or the collection of any sums due hereunder, whether or not suit is commenced. None of
the rights, powers or remedies conferred under this Warrant shall be mutually exclusive, and each right, power or remedy shall be cumulative and in addition to any other right, power or remedy whether conferred by this Warrant or now or hereafter
available at law, in equity, by statute or otherwise.
4.15 WAIVER OF JURY
TRIAL. EACH PARTY HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING BASED
UPON, ARISING OUT OF OR IN ANY WAY RELATING TO (a) THIS WARRANT, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER INVESTMENT DOCUMENT, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED THERETO, OR
(b) ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR ANY OF THEM) WITH RESPECT TO THIS WARRANT, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER INVESTMENT DOCUMENTS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER PROCEEDING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION, SUIT OR OTHER PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and
issued by its duly authorized representatives on the date first above written.
| COMPANY | ||
| OVERHILL FARMS, INC., a Nevada corporation | ||
| By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇▇ President and Chief Executive Officer | ||
| By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Senior Vice President and Chief Financial Officer
|
AGREED:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS II, L.P.,
a California limited partnership
| By: |
LLCP California Equity Partners II, L.P., a California limited
partnership, its General Partner | |||||
| By: |
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Capital Partners, Inc., a California corporation, its
General Partner | |||||
| By: |
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||||
| Vice President | ||||||
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EXHIBIT A
FORM OF
NOTICE OF EXERCISE
Pursuant to Section 2.1 of that certain Amended and Restated Warrant (No. LL-4) to Purchase 100 Shares of Common Stock originally issued September 11, 2002, and restated
upon partial exercise as of December 13, 2002 (the “Warrant”), issued by Overhill Farms, Inc., a Nevada corporation (the “Company”), the undersigned Holder hereby irrevocably elects to exercise the Warrant to purchase
( ) shares of
Common Stock at a Warrant Purchase Price of $ per share or an aggregate Warrant Purchase Price of
$ .
[If the Holder has determined
upon advice of counsel that compliance with the HSR Act is required, include the following sentences: “The undersigned has determined that this exercise is subject to the HSR Act and requests that the Company file the requisite notification and
report form with, and pay all requisite filing fees to, the FTC and the DOJ as promptly as possible. The purchase of the shares described above and the payment of the Warrant Purchase Price are subject to the expiration or earlier termination of the
waiting period under the HSR Act.”]
Pursuant to Section 2.2 of the Warrant, payment of the Warrant Purchase
Price is being made as follows (check as applicable):
The undersigned tenders payment as follows: |
Certified or official bank check in the amount of $ ;
|
Cash or wire transfer in the amount of $ ; or |
Surrender of
shares of Common Stock. |
The undersigned hereby tenders payment through the “cashless exercise” procedures set forth in Section 2.1 of the Warrant. Accordingly, the
undersigned hereby instructs the Company to withhold and cancel Warrant Shares otherwise issuable to the undersigned upon exercise of the Warrant as provided herein as
payment in full for Warrant Shares to be issued to the undersigned. No other consideration is
being delivered in connection with the exercise of the Warrant. |
The undersigned hereby
requests that [if the Holder has determined upon advice of counsel that compliance with the HSR Act is required, include the following phrase: “upon the expiration or earlier termination of the waiting period under the HSR Act”] a
certificate(s) for shares of Common Stock be issued in the name of
, and delivered within
three (3) Business Days to
at the address set forth
below.
The undersigned hereby represents that it is acquiring the Warrant Shares for its own account and not with
a view to or for resale in connection with any distribution thereof in violation of applicable securities laws.
| Dated:
|
| |||
| Name of the Holder (must conform precisely to the name specified on the face of this Warrant) | ||||
| Signature of authorized representative of the Holder | ||||
| Print or type name of authorized representative | ||||
| Employer Tax Identification Number: |
| |||
| Address of the Holder: |
| |||
| | ||||
| | ||||
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