EXHIBIT 4.10
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WARRANT
TO PURCHASE COMMON STOCK OF
AVIALL, INC.
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Warrant No.
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Original Issue
Date: , 2002
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TABLE OF CONTENTS
1. DEFINITIONS..............................................................................................1
2. EXERCISE OF WARRANT......................................................................................5
2.1. Manner of Exercise..............................................................................5
2.2. Issued Warrant Shares Fully Paid, Nonassessable; Reservation of Shares; Covenants...............6
2.3. Payment of Taxes................................................................................6
2.4. Fractional Shares...............................................................................6
3. TRANSFER, DIVISION AND COMBINATION.......................................................................6
3.1. Transfer........................................................................................6
3.2. Division and Combination........................................................................6
3.3. Expenses........................................................................................7
3.4. Maintenance of Books............................................................................7
4. ADJUSTMENT PROVISIONS....................................................................................7
4.1. Stock Dividends, Subdivisions and Combinations..................................................7
4.2. Adjustment of Number of Shares Purchasable......................................................7
4.3. Consolidation, Amalgamation, Arrangement or Merger..............................................8
4.4. Other Provisions Applicable to Adjustments Under this Section 4.................................8
5. RESERVATION AND AUTHORIZATION OF COMMON STOCK............................................................9
6. NOTICE OF CORPORATE ACTIONS; TRANSFER BOOKS..............................................................9
6.1. Notices of Corporate Actions....................................................................9
6.2. Closing of Transfer Books.......................................................................9
7. TRANSFER RESTRICTIONS....................................................................................9
7.1. Restrictions on Transfers......................................................................10
7.2. Restrictive Legends............................................................................10
7.3. Termination of Securities Law Restrictions.....................................................10
7.4. Transfers to Affiliates........................................................................11
8. LOSS OR MUTILATION......................................................................................11
9. OFFICE OF THE COMPANY...................................................................................11
10. NO VOTING OR DIVIDEND RIGHTS; LIMITATIONS OF LIABILITY..................................................11
11. MISCELLANEOUS...........................................................................................11
11.1. Nonwaiver......................................................................................11
11.2. Notice Generally...............................................................................12
11.3. Successors and Assigns.........................................................................12
11.4. Amendment......................................................................................12
11.5. Severability...................................................................................12
11.6. Headings.......................................................................................12
11.7. Governing Law; Jurisdiction....................................................................12
11.8. Satisfaction of Securities Purchase Agreement..................................................12
11.9. Investment Invent..............................................................................12
11.10. Entire Agreement...............................................................................12
11.11. Due Authorization..............................................................................13
11.12. No Conflict....................................................................................13
EXHIBIT A SUBSCRIPTION FORM
EXHIBIT B ASSIGNMENT FORM
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NEITHER THE WARRANT REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES
ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED UNLESS SO REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION AND
SUCH STATE SECURITIES LAWS IS AVAILABLE.
Warrant No.
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WARRANT
TO PURCHASE SHARES OF COMMON STOCK OF
AVIALL, INC.
THIS IS TO CERTIFY THAT ____________________ ("Initial Holder"), or its
registered assigns, is entitled, at any time after March 15, 2002 until the
Expiration Date (the "Exercise Period"), to purchase from Aviall, Inc., a
Delaware corporation (the "Company"), an aggregate of _______________ duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
of the Company (subject to adjustment as provided herein), at a purchase price
of $.01 per share (the initial "Exercise Price", subject to adjustment as
provided herein), all on the terms and conditions and pursuant to the provisions
hereinafter set forth.
1. DEFINITIONS.
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Adjustment Event" shall mean any event (other than a transaction to
which Section 4.1 applies) as a result of which the Series D Conversion Price is
adjusted pursuant to Section 5(g) of the Series D Certificate of Designations.
For the avoidance of doubt, each such adjustment (including any such adjustment
that results from giving effect to the provisions of Section 4) shall be deemed
a separate and distinct Adjustment Event subject to the provisions of Section 4.
"Additional Preferred Common Shares" shall mean, with respect to any
Adjustment Event resulting in a decrease in the Series D Conversion Price, the
aggregate additional number of shares of Common Stock issuable upon conversion
of all outstanding Convertible Preferred Stock as a result of such Adjustment
Event, provided that Additional Preferred Common Shares shall not include any
such additional shares of Common Stock to the extent that the holders of
Convertible Preferred Stock entitled to receive such additional shares of Common
Stock have irrevocably agreed with the Company to waive their rights to such
additional shares of Common Stock and the Company has not compensated any such
holder of Convertible Preferred Stock principally for such waiver.
"Affiliate" shall mean (i) with respect to any Person, any other Person
that directly or indirectly controls or manages, is controlled or managed by, or
is under common control or management with such Person, whether through the
ownership of equity interests, by contract or otherwise, and (ii) with respect
to an individual, in addition to any Person specified in clause (i), the spouse,
any parent or any child of such individual and any trust for the benefit of such
individual's spouse, parent or child.
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"Business Day" shall mean any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the city of
New
York.
"Carlyle" shall mean Carlyle Partners III, L.P., a Delaware limited
partnership, or any of its Affiliates.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the common stock of the Company, par value $.01 per share, and any
class of stock resulting from successive changes or reclassifications of such
Common Stock.
"Company" shall have the meaning set forth in the preamble of this
Warrant.
"Convertible Preferred Stock" shall mean the Series D Senior
Convertible Participating Preferred Stock of the Company, par value $.01 per
share, having the terms and conditions set forth in the Series D Certificate of
Designations.
"Current Market Price" shall mean, for a share of Common Stock on any
date, the average Quoted Price for the three consecutive (3) Trading Days prior
to the date in question.
"Designated Office" shall have the meaning set forth in Section 9
hereof.
"Exercise Date" shall have the meaning set forth in Section 2.1 hereof.
"Exercise Notice" shall have the meaning set forth in Section 2.1
hereof.
"Exercise Period" shall have the meaning set forth in the preamble of
this Warrant.
"Exercise Price" shall have the meaning set forth in the preamble of
this Warrant.
"Expiration Date" shall mean the earlier to occur of (i) the date on
which no Warrants are outstanding or (ii) March 15, 2012.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
"Holder" shall mean (i) with respect to this Warrant, the Person in
whose name the Warrant set forth herein is registered on the books of the
Company maintained for such purpose and (ii) with respect to any other Warrant
or shares of Warrant Stock, the Person in whose name such Warrant or Warrant
Stock is registered on the books of the Company maintained for such purpose.
"Initial Holder" shall have the meaning set forth in the preamble of
this Warrant.
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"Issuable Warrant Shares" shall mean, with respect to any Adjustment
Event, the aggregate number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such Adjustment Event.
"Letter Agreement" shall mean that certain Letter Agreement, dated as
of December 17, 2001, delivered by the Company to ▇. ▇. ▇▇▇▇▇▇▇ Mezzanine Fund,
L.P. and the other investors named therein.
"Opinion of Counsel" shall mean a written opinion of counsel
experienced in Securities Act matters chosen by the Holder (and which may be
in-house counsel to such Holder) of this Warrant or Warrant Stock issued upon
the exercise hereof; provided, such opinion and opinion giver are reasonably
acceptable to the Company.
"Original Issue Date" shall mean March 15, 2002.
"Original Warrant" shall mean the Warrant originally issued by the
Company as of the Original Issue Date to the Initial Holder.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
"Preferred Common Shares" shall mean with respect to any Adjustment
Event, the aggregate number of shares of Common Stock issuable upon conversion
of all outstanding Convertible Preferred Stock immediately prior to such
Adjustment Event.
"Quoted Price" shall mean, with respect to Common Stock, (i) the last
reported sales price of the Common Stock on the
New York Stock Exchange or (ii)
if not listed on the
New York Stock Exchange, the last reported sales price of
the Common Stock on such other principal exchange on which the Common Stock is
listed or admitted for trading or (iii) if not listed or admitted for trading on
a securities exchange, the last reported sales price for Common Stock as
reported by the National Association of Securities Dealers, Inc. Automatic
Quotations Systems - National Market System, or (iv) if not so reported or
listed or admitted for trading, the last reported bid price of the applicable
security in the over-the-counter market. In the event that the Quoted Price
cannot be determined as aforesaid, the Board of Directors of the Company shall
determine the Quoted Price on the basis of such quotations as it in good faith
considers appropriate. Such determination may be challenged in good faith by
holders of a majority of the shares of Common Stock issuable upon exercise of
all Warrants, and any dispute shall be resolved at the prevailing party's cost,
by the determination of an investment banking firm of recognized national
standing selected by the Company and acceptable to such holders of a majority of
the shares of Common Stock issuable upon exercise of all Warrants, which
determinations shall be made in good faith and be conclusive absent manifest
error.
"Reduced Preferred Common Shares" shall mean, with respect to any
Adjustment Event resulting in an increase in the Series D Conversion Price, the
aggregate reduction in the number of shares issuable upon conversion of all
Convertible Preferred Stock as a result of such Adjustment Event.
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"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in Section 7.2(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Series D Conversion Price" shall mean the Conversion Price (as defined
in the Series D Certificate of Designations).
"Series D Certificate of Designations" shall mean the Amended and
Restated Certificate of Designations of Series D Senior Convertible
Participating Preferred Stock of the Company as filed with the Secretary of
State of the State of Delaware on February 7, 2002, as amended from time to time
thereafter.
"Securities Purchase Agreement" shall mean that certain Securities
Purchase Agreement, dated as of December 17, 2001, by and between the Company,
Aviall Services, Inc. and the investors named therein.
"Trading Day" shall mean, with respect to any security, any day on
which any market in which the applicable security is then traded and in which
the Quoted Price may be ascertained, is open for business.
"Transfer" shall mean any disposition of any Warrant or Warrant Stock
or of any interest in either thereof, which would constitute a "sale" thereof
within the meaning of the Securities Act.
"Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1 hereof, multiplied by (ii) the Exercise Price as of the date of such
exercise.
"Warrants" shall mean the Original Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, such Original
Warrant or any other such warrant.
"Warrant Stock" generally shall mean the shares of Common Stock issued,
issuable or both (as the context may require) upon the exercise of this Warrant.
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2. EXERCISE OF WARRANT.
2.1. Manner of Exercise. (a) During the Exercise Period, the Holder of
this Warrant may from time to time exercise this Warrant, on any Business Day,
for all or any part of the number of shares of Common Stock purchasable
hereunder. In order to exercise this Warrant, in whole or in part, the Holder
shall (i) deliver to the Company at the Designated Office a written notice of
the Holder's election to exercise this Warrant (an "Exercise Notice"), which
Exercise Notice shall be irrevocable and shall specify the number of shares of
Common Stock to be purchased, (ii) surrender to the Company at the Designated
Office this Warrant and (iii) pay to the Company the Warrant Price (the date on
which such delivery, surrender and payment shall have taken place being
hereinafter sometimes referred to as the "Exercise Date"). Such Exercise Notice
shall be in the form of the subscription form attached hereto as Exhibit A, duly
executed by the Holder or its duly authorized agent or attorney.
(b) Upon receipt by the Company of such Exercise Notice, Warrant and
Warrant Price, the Company shall, as promptly as practicable, and in any event
within five (5) Business Days thereafter, execute (or cause to be executed) and
deliver (or cause to be delivered) to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided. The certificate or certificates so delivered shall be, to
the extent possible, in such denomination or denominations as the exercising
Holder shall reasonably request in the Exercise Notice and shall be registered
in the name of the Holder or such other name as shall be designated in the
Exercise Notice. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder
or any other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the Exercise
Date.
(c) Payment of the Warrant Price may be made as follows (or by any
combination of the following): (i) in United States currency by cash or delivery
of a certified check, bank draft or postal or express money order payable to the
order of the Company, (ii) by surrendering to the Company for cancellation a
portion of the principal amount of the senior promissory note due December 21,
2007 of the Company held by the Holder (the "Note") or (at the election of the
Holder) accrued and unpaid interest thereon which is equal to the Warrant Price,
(iii) by surrender of a number of shares of Common Stock held by the Holder
equal to the quotient obtained by dividing (A) the Warrant Price payable with
respect to the portion of this Warrant then being exercised by (B) the Current
Market Price per share of Common Stock on the Exercise Date, or (iv) by
cancellation of any portion of this Warrant with respect to the number of shares
of Common Stock equal to the quotient obtained by dividing (A) the Warrant Price
payable with respect to the portion of this Warrant then being exercised by (B)
the difference between (1) the Current Market Price per share of Common Stock on
the Exercise Date, and (2) the Exercise Price per share of Common Stock.
If, pursuant to clause (ii) above, less than the entire unpaid
principal amount of any Note shall be applied toward payment of the
consideration payable upon any exercise of this Warrant, the Holder thereof
shall surrender the Note and the Company shall (1) pay to the Holder the amount
of unpaid interest accrued to the date of surrender on the portion of the
principal amount of such Note which has been applied toward the Warrant Price,
such payment to be in the form of a certified or official bank check and (2)
issue a new Note representing the balance of the unpaid principal amount of the
Note so surrendered, payable to such Holder or as such Holder may otherwise
direct.
(d) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
the shares of Common Stock being issued, deliver to the Holder
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a new Warrant evidencing the rights of the Holder to purchase the unpurchased
shares of Common Stock called for by this Warrant. Such new Warrant shall in all
other respects be identical with this Warrant.
2.2. Issued Warrant Shares Fully Paid, Nonassessable; Reservation of
Shares; Covenants. The Company shall take all actions reasonably necessary to
ensure that upon exercise of this Warrant, the shares of Common Stock issued
upon exercise hereof shall, without further action by the Holder, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof.
The Company shall not avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will reasonably cooperate
in good faith with the Holder in the exercise of the Holder's rights hereunder.
Without limiting the generality of the foregoing, the Company will (i) not
increase the par value of its Common Stock, except in connection with a reverse
stock split, (ii) take all such action as may be reasonably necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein and restrictions under federal and
state securities laws) created by or through the Company with respect to such
issuance upon the exercise of this Warrant, and (iii) use its reasonable best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
2.3. Payment of Taxes. The Company shall pay all expenses, taxes and
charges in connection with the issue or delivery thereof, excluding Holder's
income or capital gains taxes with respect to the transaction.
2.4. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of this Warrant. As to any
fraction of a share that the Holder of this Warrant would otherwise be entitled
to purchase upon such exercise, the Company shall pay the Holder cash in lieu of
such fractional share in an amount equal to the same fraction of the Current
Market Price.
3. TRANSFER, DIVISION AND COMBINATION.
3.1. Transfer. Subject to compliance with Section 7 hereof, each
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the Designated Office, together with delivery of a
written assignment of this Warrant in the form attached hereto as Exhibit B duly
executed by the Holder or its duly authorized agent or attorney. Upon such
surrender and delivery, the Company shall, subject to Section 7, execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned and this Warrant shall promptly be cancelled. A Warrant,
if properly assigned in compliance with Section 7, may be exercised by the new
Holder for the purchase of shares of Common Stock without having a new Warrant
issued.
3.2. Division and Combination. Subject to compliance with the
applicable provisions of this Warrant, including Section 7 hereof, this Warrant
may be divided or combined with other Warrants upon surrender and presentation
hereof at the Designated Office, together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the
Holder duly authorized or its agent or attorney. Subject to compliance with the
applicable provisions of this Warrant as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
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3.3. Expenses. The Company shall prepare, issue and deliver at its own
expense any new Warrant or Warrants required to be issued under this Section 3.
3.4. Maintenance of Books. The Company agrees to maintain, at the
Designated Office, books for the registration and transfer of the Warrants.
4. ADJUSTMENT PROVISIONS.
4.1. Stock Dividends, Subdivisions and Combinations. If at any time
after the date hereof the Company shall:
(i) pay a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(ii) subdivide its outstanding shares of Common Stock into a greater
number of shares;
(iii) combine its outstanding shares of Common Stock into a smaller
number of shares; or
(iv) issue by reclassification of its Common Stock any shares of its
capital stock;
then the Exercise Price shall be adjusted to equal the product of the Exercise
Price in effect immediately prior to such event multiplied by a fraction, the
numerator of which is equal to the number of shares of Common Stock outstanding
immediately prior to the event and the denominator of which is equal to the
number of shares of Common Stock outstanding immediately after such event;
provided, however, in no event shall the Exercise Price be less than the par
value of a share of Common Stock. Such adjustment shall be made successively
whenever any event listed above shall occur.
In addition, the number of shares for which this Warrant is exercisable
shall be adjusted so that the Holder of this Warrant thereafter may exercise
this Warrant for the same aggregate number and kind of shares of capital stock
of the Company that such Holder would have owned immediately following such
event if such Holder had exercised this Warrant immediately prior to such event.
The adjustment shall become effective immediately after the record date in the
case of a dividend or distribution and immediately after the effective date of a
subdivision, combination or reclassification.
If, after an adjustment referred to in clauses (i) through (iv) above,
the Holder upon exercise of this Warrant may receive shares of two or more
classes of capital stock of the Company, the Company shall determine the
allocation of the Exercise Price between the classes of capital stock; provided,
however, in no event shall the Exercise Price be less than the par value of the
capital stock for which this Warrant is then exercisable. After such allocation,
the exercise rights and the Exercise Price with respect to each class of capital
stock shall thereafter be subject to adjustment on terms comparable to those
applicable to Common Stock in this Section 4.
4.2. Adjustment of Number of Shares Purchasable. Upon each Adjustment
Event resulting in any decrease in the Series D Conversion Price, this Warrant
shall thereafter evidence the right to receive, at the Exercise Price, a number
of shares of Common Stock equal to the sum of (A) the number of Issuable Warrant
Shares, and (B) that number of shares of Common Stock (calculated to the nearest
one-hundredth) obtained by multiplying (x) the number of Issuable Warrant Shares
by (y) a fraction, the numerator of which equals the number of Additional
Preferred Common Shares and the denominator of which equals the number of
Preferred Common Shares.
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Upon each Adjustment Event resulting in any increase in the Series D
Conversion Price, this Warrant shall thereafter evidence the right to receive,
at the Exercise Price, a number of shares of Common Stock equal to (A) the
number of Issuable Warrant Shares, minus (B) that number of shares of Common
Stock (calculated to the nearest one-hundredth) obtained by multiplying (x) the
number of Issuable Warrant Shares by (y) a fraction, the numerator of which
equals the number of Reduced Preferred Common Shares and the denominator of
which equals the Preferred Common Shares. Notwithstanding anything to the
contrary herein, immediately upon transfer of this Warrant to a Person who is
not an Affiliate of the Initial Holder of this Warrant, the first sentence of
this Section 4.2 shall be of no further force or effect.
4.3. Consolidation, Amalgamation, Arrangement or Merger. In case of any
consolidation, amalgamation, arrangement or merger of the Company with or into
another Person or any merger of another Person with or into the Company (other
than a transaction to which Section 4.1 applies), or in case of any sale or
transfer of all or substantially all of the assets of the Company, this Warrant
shall become exercisable only into the kind and amount of securities, cash and
other property receivable upon such consolidation, amalgamation, arrangement,
merger, sale or transfer by a holder of the number of shares of Common Stock
(and other securities, if applicable) for which this Warrant was exercisable
immediately prior thereto (assuming such holder of Common Stock (and other
securities, if applicable) failed to exercise any rights of election).
Concurrently with the consummation of such transaction, the corporation formed
by or surviving any such consolidation or merger if other than the Company, or
the person to which such sale or conveyance shall have been made, shall enter
into a supplemental agreement so providing and further providing for adjustments
which shall be as equivalent as may be practicable to the adjustments provided
for in this Section 4.
4.4. Other Provisions Applicable to Adjustments Under this Section 4.
The following provisions shall be applicable to the adjustments provided for
pursuant to this Section 4:
(a) When Adjustments To Be Made. The adjustments required by this
Section 4 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. In computing the adjustments under this Section 4,
fractional interests in Common Stock shall be taken into account to the nearest
1/100th of a share.
(b) When Adjustment Not Required. If the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution to which the provisions of Section 4.1 would apply, but
shall, thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend or distribution, 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.
(c) Notice of Adjustments. Whenever the Exercise Price or number of
shares issuable upon exercise of this Warrant is adjusted, the Company shall
promptly mail to the Holder, first class, postage paid, a notice
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of the adjustment and a certificate from the Company's public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. The Company shall keep at its principal office or at the Designated Office,
if different, copies of all such certificates and cause the same to be available
for inspection at said office during normal business hours by any Holder or any
prospective transferee of a Warrant designated by a Holder thereof.
Except as provided in the immediately following sentence, any
determination that the Company or its Board of Directors must make pursuant to
this Section 4 shall be conclusive. Whenever the Company or its Board of
Directors shall be required to make a determination under this Section 4, such
determination shall be made in good faith and may be challenged in good faith by
the Holder and any dispute shall be resolved, at the prevailing party's expense,
by an investment banking firm of recognized national standing, selected by the
Company and acceptable to such Holder.
(d) Dividends. If the Company shall make or pay any dividend or other
distribution, whether in cash, securities or other property (other than
dividends and distributions to which Sections 4.1 or 4.2 applies), with respect
to its Common Stock, the Company shall concurrently make a payment to the Holder
of this Warrant equal to the amount of cash, securities or property that would
have been payable to such Holder had such Holder exercised its Warrant for
Common Stock on the record date for such dividend or distribution or if no such
record is taken, on the date of such dividend or distribution and appropriate
provision therefor shall be made a part of any such dividend or distribution.
5. RESERVATION AND AUTHORIZATION OF COMMON STOCK.
From and after the Original Issue Date, the Company shall at all times
reserve and keep available for issuance upon the exercise of the Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all Warrants. All shares of Common
Stock issuable upon the exercise of the Warrants shall be fully paid and
nonassessable, not subject to preemptive rights and shall be free and clear of
all liens (other than any created by actions of the Holder).
6. NOTICE OF CORPORATE ACTIONS; TRANSFER BOOKS.
6.1. Notices of Corporate Actions. 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 distribution, (b) any capital reorganization of the Company
(including any transaction specified in Section 4.1), 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 or other
disposition of all or substantially all the assets of the Company to another
Person or (c) any voluntary or involuntary dissolution, liquidation or winding
up of the Company, the Company shall provide not less than twenty (20) days
prior notice of such event described in clauses (a), (b) and (c) in accordance
with Section 11.2.
6.2 Closing of Transfer Books. The Company shall not at any time,
except upon dissolution, liquidation or winding up of the Company, close its
stock transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
7. TRANSFER RESTRICTIONS.
The Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 7.
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7.1. Restrictions on Transfers. Neither this Warrant nor any shares of
Restricted Common Stock issued upon the exercise hereof shall be Transferred
other than pursuant to (i) an effective registration statement under the
Securities Act or (ii) an exemption from the registration provisions thereof. If
requested by the Company, the Holder will deliver an Opinion of Counsel to the
effect that a proposed transfer pursuant to clause (ii) of the preceding
sentence (other than a transfer described in Section 7.4) is exempt from the
registration requirements of the Securities Act.
7.2. Restrictive Legends. (a) Except as otherwise provided in this
Section 7, each certificate for Warrant Stock initially issued upon the exercise
of this Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS. NO TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL (AS DEFINED IN THAT CERTAIN
WARRANT FOR COMMON STOCK DATED MARCH 15, 2002) OR OTHER MEANS
SATISFACTORY TO THE COMPANY, THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IS IN COMPLIANCE WITH
STATE SECURITIES LAWS."
(b) Except as otherwise provided in this Section 7, each Warrant shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
"NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED UNLESS SO REGISTERED OR
UNLESS AN EXEMPTION FROM REGISTRATION AND SUCH STATE SECURITIES LAWS IS
AVAILABLE."
7.3. Termination of Securities Law Restrictions. Notwithstanding the
foregoing provisions of this Section 7, the restrictions imposed by Section 7.1
upon the transferability of the Warrants and the Restricted Common Stock and the
legend requirements of Section 7.2 shall terminate as to any particular Warrant
or shares of Restricted Common Stock if (i) the Company shall have received from
the Holder thereof an Opinion of Counsel to the effect that such legend is not
required in order to ensure compliance with the Securities Act or (ii) such
Warrant or shares of Restricted Common Stock shall be registered by the Company.
Whenever the restrictions imposed by Section 7.2 shall terminate as to this
Warrant, as hereinabove provided, the Holder hereof shall be entitled to receive
from the Company, at the expense of the Company, a new Warrant bearing the
following legend in place of the restrictive legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED IN
SECTION 7 HEREOF TERMINATED ON ______________, ____, AND ARE OF NO
FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Wherever the
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restrictions imposed by this Section shall terminate as to any share of
Restricted Common Stock, as hereinabove provided, the Holder thereof shall be
entitled to receive from the Company, at the Company's expense, a new
certificate representing such Common Stock not bearing the restrictive legends.
7.4. Transfers to Affiliates. Notwithstanding anything contained herein
to the contrary, the Holders shall have the right at any time, without
restriction of any kind, to transfer all or any portion of the Warrants and the
Warrant Stock to any Affiliate; provided, however, that any such Affiliate
agrees to be bound by the provisions of this Section 7.
8. LOSS OR MUTILATION.
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft, destruction
or mutilation of this Warrant, and, in the case of such loss, theft, or
destruction of this Warrant, an indemnity bond or agreement reasonably
satisfactory to the Company or, in case of mutilation, upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to such Holder; provided, however, in the
case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.
9. OFFICE OF THE COMPANY.
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency, which may be the principal executive offices of
the Company (the "Designated Office"), where the Warrants may be presented for
exercise, registration of transfer, division or combination as provided in this
Warrant. Such Designated Office shall initially be the office of the Company at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Company may from time to time
change the Designated Office to another office of the Company or its agent
within the United States by notice given to all registered holders of Warrants
at least ten (10) Business Days prior to the effective date of such change.
10. NO VOTING OR DIVIDEND RIGHTS; LIMITATIONS OF LIABILITY.
This Warrant shall not be construed as conferring upon the Holder the
right to vote or to execute written consents as a stockholder of the Company.
Except as expressly provided herein, this Warrant shall not be construed as
conferring upon the Holder the right to notice as a stockholder of the Company
or any other matters or rights whatsoever as a stockholder of the Company.
Except as expressly provided herein, no dividends or interest shall be payable
or accrued in respect of this Warrant or the rights represented hereby or the
shares purchasable hereunder until, and only to the extent that, shares of
Common Stock have been issued to the Holder pursuant to the exercise of this
Warrant. 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 such
Holder for the Exercise Price for any Warrant Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or its creditors.
11. MISCELLANEOUS.
11.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Company or the Holder shall
operate as a waiver of such right or otherwise prejudice the rights, powers or
remedies of such Person.
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11.2. Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or communication hereunder to be made pursuant to the
provisions of this Warrant shall be delivered or sent by registered or certified
mail, postage prepaid, to any Holder of this Warrant, at its last known address
appearing on the books of the Company maintained for such purpose, or to the
Company at its Designated Office.
11.3. Successors and Assigns. Subject to the provisions of Sections
3.1, 7.1 and 7.2, this Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
permitted successors and assigns of the Holder hereof.
11.4. Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder
thereof.
11.5. Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
11.6. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
11.7. Governing Law; Jurisdiction. In all respects, including all
matters of construction, validity and performance, this Warrant and the
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the state of
New York. The Company hereby
consents and agrees that the state or federal courts located in
New York, shall
have exclusive jurisdiction to hear and determine any claims or disputes between
the Company and the Holder of this Warrant pertaining to this Warrant or to any
matter arising out of or relating to this Warrant.
11.8. Satisfaction of Securities Purchase Agreement. The parties to
this Warrant acknowledge and agree that the Initial Holder elected to receive
this Warrant in lieu of receiving shares of Common Stock pursuant to the terms
of the Securities Purchase Agreement and the Letter Agreement and that the
issuance of this Warrant is in complete satisfaction of the Company's
obligations to deliver Mezzanine Equity (as defined in the Securities Purchase
Agreement) to the Initial Holder pursuant to the terms of the Securities
Purchase Agreement.
11.9. Investment Intent. The Holder hereby represents and warrants that
this Warrant and the shares of Common Stock issued or issuable upon the exercise
of this Warrant are being or will be acquired for the Holder's account and with
no intention of distributing or reselling such Warrant or shares of Common Stock
or any part thereof in any transaction that would be in violation of the
Securities Act or any state securities laws, without prejudice, however, to the
Holder's right at all times to sell or otherwise dispose of all or any part of
(i) the shares of Common Stock issued upon the exercise of this Warrant, under
an effective registration statement under the Securities Act, or (ii) the shares
of Common Stock issued upon the exercise of this Warrant or the Warrant under an
exemption from such registration available under the Securities Act, and
subject, nevertheless, to the disposition of its property being at all times
within its control.
11.10. Entire Agreement. This Warrant, including all exhibits attached
hereto, constitute the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties.
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11.11. Due Authorization. The execution and delivery by the Company of
this Warrant, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action of the
Company. This Warrant has been duly executed and delivered and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally, and (ii) general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
11.12. No Conflict. The execution and delivery by the Company of this
Warrant and the performance by it of the transactions contemplated hereby do not
and will not (i) conflict with or result in a violation of any provision of the
Company's Restated Certificate of Incorporation or Amended and Restated By-laws,
(ii) conflict with or result in a violation of any provision of, or constitute a
default or event of default under any material contract to which the Company is
a party, except where such violation, default or event of default would not have
a material adverse effect on the Company or the Holder's rights hereunder or
(iii) violate any applicable law, except where such violation would not have a
material adverse effect on the Company or the Holder's rights hereunder.
* * * * * * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
AVIALL, INC.
By:
----------------------------
Name:
Title:
[SEAL]
Attest:
By:
----------------------------
Name:
Title:
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