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WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "AGREEMENT") is dated as of
October 2, 1998 by and between ▇▇▇▇▇▇▇ International, Ltd., a Delaware
corporation (the "CORPORATION"), and ▇▇▇▇▇▇▇ Partners, LLC, a limited liability
company organized and existing under the laws of the State of Delaware (the
"WARRANT HOLDER").
RECITALS:
A. The Warrant Holder is a party to that certain Agreement
dated as of the date hereof (the "OMNIBUS AGREEMENT"), by and among (i) the
Company; (ii) BankBoston N.A., successor by merger to Bank of Boston
Connecticut ("▇▇▇"); (iii) June ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and the United States Trust Company of New York, as Co-Executors of the
Estate of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Late of New York, New York (the "Estate"); and (iv)
the Warrant Holder.
B. The Omnibus Agreement generally sets forth the terms and
conditions under which the Warrant Holder is willing to provide $4,000,000 of
emergency funding to the Company.
C. In partial consideration of the entering into Omnibus
Agreement by the Warrant Holder, the Company has agreed to issue and deliver to
the Warrant Holder stock purchase warrants entitling the Warrant Holder to
purchase, in the aggregate, up to that number of shares of the Company's common
stock, par value $.01 per share ("COMMON STOCK"), that would result in the
Warrant Holder owning thirty-five percent (35%) of the pro forma, fully diluted
number of shares of the Company's Common Stock at the time of exercise.
D. This is the warrant agreement contemplated by the Omnibus
Agreement.
E. Subject to the terms and provisions hereof, each Common
Stock purchase warrant (individually, a "WARRANT", and collectively, the
"WARRANTS") issued under this Agreement shall be evidenced by a Warrant
Certificate in the form of Exhibit A entitling the Warrant Holder to purchase a
number of shares of Common Stock determined as provided therein at the per
share Exercise Price (as defined herein)(subject to adjustment hereunder).
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties intending to be
legally bound hereby agree as follows:
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ARTICLE I
FORM OF WARRANT
The Warrants shall be evidenced by a certificate (the "WARRANT
CERTIFICATE"). The text of the Warrant Certificate (and the related forms of
exercise and assignment) shall be substantially in the form attached hereto as
Exhibit A and may have such identification, designation and information thereon
as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation adopted pursuant thereto.
ARTICLE II
EXERCISE PRICE, RIGHTS, TERM, AND METHOD OF EXERCISE
Section 2.01. Exercise Price. Unless adjusted as provided in Article III
hereof, the exercise price ("EXERCISE PRICE") for each share of Common Stock
purchased upon exercise of a Warrant issued hereunder shall be $1.50.
Section 2.02. Warrant Rights And Term. Each Warrant shall entitle the
Warrant Holder, upon exercise thereof and subject to the provisions thereof and
of this Agreement, including the provisions relating to adjustments upon the
occurrence of certain events as set forth in Article III hereof, to purchase
from the Company one fully paid and nonassessable share of Common Stock at the
then Exercise Price. The Warrants issued hereunder and evidenced by the Warrant
Certificate shall not be exercisable prior to January 1, 1999 and shall expire
and no longer be exercisable at 5:00 p.m. on October 1, 2003 (the "EXPIRATION
DATE").
Section 2.03. Expiration. Each Warrant not exercised by 5:00 p.m. on the
Expiration Date shall become void, and all rights thereunder and all rights in
respect thereof under this Agreement shall thereupon cease.
Section 2.04. Method Of Exercise.
(a) The Warrant Holder may exercise its rights with respect to
all or any whole number of Warrants evidenced by the Warrant Certificate.
Exercise shall be effected by surrender of the Warrant Certificate, with the
exercise form thereon duly executed, to the Company at its offices as designated
in Section 5.04 hereof, together with the Exercise Price for each Warrant that
is exercised. Payment of the Exercise Price shall be made by (a) certified check
payable in lawful money of the United States of America to the order of the
Company, (b) wire transfer of immediately available funds to an account
designated by the Company, or (c) surrender and cancellation of outstanding
indebtedness due and owing from the Company to the Warrant Holder at face value
(including both principal and any interest accrued and payable thereon) in an
amount equal to the aggregate Exercise Price payable with respect to the portion
of the Warrant then being exercised.
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(b) Upon receipt of the Warrant Certificate with the exercise form duly
executed and accompanied by full and proper payment of the Exercise Price for
the shares of Common Stock purchased thereby, the Company shall deliver to, or
in accordance with the instructions of, the Warrant Holder certificates for
the total number of shares of Common Stock for which the Warrants evidenced by
such Warrant Certificate are being exercised.
(c) In the event that the Warrant Holder shall exercise rights with
respect to less than all of the Warrants evidenced by the Warrant Certificate
surrendered upon the exercise of Warrants, a new Warrant Certificate for the
balance of such Warrants shall be delivered to, or in accordance with the
instructions of, the Warrant Holder. The amount of the balance shall be
expressed as a percentage equal to the aggregate percentage specified in the
surrendered Warrant Certificate less the percentage represented by the Warrants
that have been exercised.
Section 2.05. Cancellation of Warrants. In the event the Company shall
purchase or otherwise acquire the Warrants, the same shall thereupon be
delivered to the Company and be cancelled by it and retired. The Company shall
cancel any Warrant surrendered for exchange, substitution, transfer or
exercise in whole or in part.
Section 2.06. Transferability. Prior to the Expiration Date and subject to
compliance with applicable laws, the Warrants and all rights thereunder and
hereunder are transferable by the holder of the Warrants, in whole or in part,
at the office or agency of the Company referred to herein. Any such transfer
shall be made upon surrender of the Warrant Certificate together with a duly
completed Form of Assignment in the form attached hereto as Exhibit B properly
endorsed.
ARTICLE III
ADJUSTMENTS TO WARRANTS UPON CERTAIN EVENTS
Section 3.01. Definition: Mechanical Adjustments.
(a) Except as otherwise provided herein, for purposes of the applicable
percentages set forth in the Warrants issued pursuant to this Agreement, the
pro forma, fully diluted number of shares of the Company's Common Stock shall
be deemed to mean and include (i) all shares of Common Stock issued and
outstanding on the date of exercise; and (ii) all shares of Common Stock that
are issuable upon the exercise of any then exercisable rights, options or
warrants to purchase shares of Common Stock (including any unexercised Warrants
issued pursuant to this Warrant Agreement); and (iii) all shares of Common
Stock that are issuable upon the conversion of securities then convertible into
shares of Common Stock; provided, however, that the pro forma, fully diluted
number of shares of the Company's Common Stock shall not be deemed to include
any shares of Common Stock (X) issued after the date hereof in a bona fide
public offering registered under the Securities Act of 1933, as amended, or (y)
any shares of Common Stock issuable upon the exercise of any stock purchase
warrants issued in connection
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with the Company's initial public offering consummated on December 20, 1993
(including any such warrants issued to the underwriters of such offering or
upon the exercise of the over-allotment option granted to such underwriters)
unless the expiration date of such warrants is extended beyond the expiration
date in effect as of the date hereof (in which case, such warrants shall be
deemed to be included in the calculation of the pro form, fully diluted number
of shares of Common Stock).
(b) The Exercise Price for each share of Common Stock purchasable
upon the exercise of each Warrant (such shares being referred to in this Article
III as the "WARRANT SHARES") shall be subject to adjustment in the event that
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, (ii) subdivide or reclassify its
outstanding shares of Common Stock into a greater number of shares or (iii)
combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares (each, an "ADJUSTMENT EVENT"). As a result of any such
Adjustment Event, the Exercise Price per Warrant Share in effect immediately
prior to the Share Adjustment Event shall be adjusted by multiplying the
Exercise Price by a fraction, the numerator or which shall be one (1) and the
denominator of which shall be the aggregate number of shares (or fraction
thereof) into which a single share of the Common Stock would be converted as a
result of the Adjustment Event.
Section 3.02. Notice of Adjustment. Whenever the Exercise Price of
Warrant Shares is adjusted, as herein provided, the Company shall promptly
provide to the Warrant Holder, in accordance with Section 5.04, a notice of
such adjustment or adjustments which sets forth the Exercise Price of the
Warrant Shares after such adjustment, a brief statement of the facts requiring
such adjustment and the computation by which such adjustment was made.
Section 3.03. Effect of Sale, Merger or Consolidation.
(a) In the event of (i) any reclassification (other than a change in
par value) of the Common Stock or the exchange or cancellation of outstanding
shares of Common Stock, (ii) any conversion of the Common Stock into securities
or property (including cash) of another corporation, (iii) the consolidation of
the Company with, or the merger of the Company with or into, any other
corporation or (iv) in the event of the sale of all or substantially all of
the properties and assets of the Company to any person in exchange for
securities or other property (including cash) (each such event hereinafter
being referred to as a "CAPITAL EVENT"), each Warrant shall thereafter be
exercisable upon the terms and conditions specified in this Agreement for the
number of shares of stock or other securities or property (including cash) of
the Company or of the person into which shares of Common Stock are converted or
resulting from such consolidation or surviving such merger or to which such
sale shall be made, as the case may be, to which the shares of Common Stock
issuable (immediately prior to such Capital Event) upon exercise of such
Warrant would have been entitled upon such Capital Event. In any such case, if
necessary, the provisions set forth in this Article III with respect to the
rights and interests thereafter of the Warrant Holder shall be appropriately
adjusted so as to be reasonably applicable
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to any shares of stock or other securities or property thereafter deliverable on
the exercise of the Warrants.
(b) The subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock shall not
be deemed to be a reclassification of the Common Stock of the Company for the
purpose of this Section 3.03. The Company shall not effect any transaction
resulting in a Capital Event, unless prior to or simultaneously with the
consummation thereof, any successor person or person purchasing such assets
shall assume, by written instrument executed and delivered to the Warrant
Holder, the obligation to deliver to the holder of each Warrant such shares of
stock, securities or property (including cash) as the Warrant Holder may be
entitled to receive upon exercise of the Warrants in accordance with the
foregoing provisions, and the other obligations of the Company under this
Warrant Agreement.
Section 3.04 Notice of Certain Events. In case at any time prior to the
Expiration Date:
(a) the Company shall authorize the granting to all holders of Common
Stock of rights to subscribe for or purchase any shares of stock of any class or
of any other rights; or
(b) there shall be any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock); or
(c) there shall be any capital reorganization by the Company; or
(d) there shall be a consolidation or merger involving the Company or sale
of all or substantially all of the Company's property and assets (except a
merger or other reorganization in which the Company shall be the surviving
corporation or a consolidation, merger or sale with a wholly-owned subsidiary);
or
(e) there shall be voluntary or involuntary dissolution, liquidation and
winding up by the Company or dividend or distribution to holders of Common Stock
(other than the Company's customary cash and stock dividends); or
(f) any other event described in Section 3.01.
then in any one or more of said cases, the Company shall cause to be delivered
to the Warrant Holder, at the earliest practicable time (and, in any event, not
less than fifteen (15) days before any record date or other date set for
definitive action), notice of the date on which the books of the Company shall
close or a record shall be taken for such dividend, distribution or subscription
rights or such reorganization, sale, consolidation, merger, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also set forth such facts as shall indicate the effect of such action (to
the extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares of stock and other securities and
property deliverable upon exercise of the Warrants. Such notice shall also
specify the date, if
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known, as of which the holders of record of the Common Stock shall participate
in said dividend, distribution or subscription rights or shall be entitled to
exchange their shares of the Common Stock for securities or other property
(including cash) deliverable upon such reorganization, sale, consolidation,
merger, dissolution, liquidation or winding up, as the case may be.
Section 3.05. Effect of Adjustment on Warrant Certificates. The form of
Warrant Certificate need not be changed because of any change in the Exercise
Price, the number of Warrant Shares issuable upon the exercise of a Warrant or
the number of Warrants outstanding pursuant to this Article III, and Warrant
Certificates issued before or after such change may state the same Exercise
Price, the same number of Warrants and the same number of Warrant Shares
issuable upon exercise of Warrants as are stated in the Warrant Certificates
theretofore issued pursuant to this Agreement. The Company may, however, at any
time, in its sole discretion, make any change in the form of Warrant Certificate
that it may deem appropriate and that does not affect the substance thereof, and
any Warrant Certificates thereafter issued, whether in exchange or substitution
for an outstanding Warrant Certificate or otherwise, may be in the form as so
changed.
ARTICLE IV
RIGHTS OF WARRANT HOLDER; OTHER AGREEMENTS
Section 4.01. No Rights as Stockholders. The Warrant Holder, as such, shall
not be entitled to vote or to receive dividends or otherwise be deemed to be the
holder of shares of Common Stock for any purpose, nor shall anything contained
herein or in any Warrant Certificate be construed to confer upon any Warrant
Holder, as such, any of the rights of a stockholder of the Company or any right
to vote upon or give or withhold consent to any action of the Company (whether
upon any reorganization, issuance of securities, reclassification or conversion
of Common Stock, consolidation, merger, sale, lease, conveyance or otherwise),
receive notice of meetings or other action affecting stockholders (except for
notices expressly provided for in this Agreement) or receive dividends or
subscription rights, until such Warrant Certificates shall have been surrendered
for exercise accompanied by full and proper payment of the Exercise Price as
provided in this Agreement and shares of Common Stock thereunder shall have
become issuable and until such person shall have been deemed to have become a
holder of record of such shares. If, at the date of surrender of such Warrant
Certificate and payment of such Exercise Price, the transfer books for the
Common Stock shall be closed, certificates for the shares of Common Stock shall
be issuable on the date on which such books shall next be open (whether before,
on or after the Expiration Date) and, until such date, the Company shall be
under no duty to deliver any certificate for such shares of Common Stock. The
Warrant Holder shall, upon the exercise of Warrants, not be entitled to any
dividends if the record date with respect to payment of such dividends shall be
a date prior to the date such shares of Common Stock became issuable upon the
exercise of such Warrants.
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Section 4.02. Replacement Warrants. If any Warrant Certificate is lost,
stolen, mutilated or destroyed, the Company may, upon receipt of evidence
satisfactory to the Company of such loss, theft, mutilation or destruction and
on such terms as to indemnity or otherwise as the Company may in its discretion
require (which shall, in the case of a mutilated Warrant Certificate, include
the surrender thereof), issue a new Warrant Certificate of like denomination and
tenor as the lost, stolen, mutilated or destroyed Certificate. Applicants for
such substitute Warrant Certificates shall also comply with such other
reasonable regulations and pay any such reasonable charges as the Company may
prescribe. In the event any Warrant Certificate is lost, stolen, mutilated or
destroyed, and the owner thereof desires to exercise the Warrants evidenced
thereby, the Company may, in lieu of issuing a substitute Warrant Certificate,
authorize the exercise thereof upon receipt of the above evidence and on such
terms of indemnity as it may require.
Section 4.03. Maintenance of Sufficient and Proper Shares of Common Stock.
(a) The Company shall at all times reserve and keep available a number
of authorized shares of Common Stock sufficient to permit the exercise in full
of all outstanding Warrants and shall use its best efforts to cause all shares
of Common Stock issued upon the exercise of the Warrants to be listed on any
exchanges on which the Common Stock is then listed.
(b) If at any time the taking of any action would cause an adjustment in
the Exercise Price so that the exercise of a Warrant while such Exercise Price
is in effect would cause a share of Common Stock to be issued at a price below
its then par value, the Company shall take such action as may, in the opinion of
its counsel, be necessary in order that it may validly and legally issue fully
paid and nonassessable shares of Common Stock upon the exercise of the Warrants
at such Exercise Price.
Section 4.04. Fractional Warrants. Anything herein to the contrary
notwithstanding, the Company shall not be required to issue fractions of
Warrants on any distribution of Warrants to Warrant Holders or to distribute
Warrant Certificates that evidence fractional Warrants.
Section 4.05. Legend. The Warrant Certificates shall bear the legend set
forth in Exhibit A hereto and the shares of Common Stock issuable upon the
exercise of the Warrants shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.
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A STATEMENT SUMMARIZING THE VOTING POWERS, DESIGNATIONS, PREFERENCES,
LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS OF THE VARIOUS CLASSES
OF STOCK OR SERIES THEREOF MAY BE OBTAINED BY THE STOCKHOLDERS OF THE
COMPANY, WITHOUT CHARGE, FROM THE PRINCIPAL OFFICES OF THE COMPANY."
Section 4.06. No Dilution or Impairment. The Company will not, by amendment
of its certificate of incorporation or through any reorganization, 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 the Warrants, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Warrant Holder
against dilution or other impairment. Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any shares of
Common Stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise and (b) will not effect a subdivision or split-up of
shares or similar transaction with respect to any class of Common Stock of the
Company without effecting an equivalent transaction with respect to all other
classes of Common Stock of the Company.
4.07. No Liens, etc. All securities that may be issued upon exercise of the
Warrants (and pursuant to this Agreement) will, upon issuance, be validly
issued, fully paid, nonassessable and free from all taxes, liens and charges
with respect to the issue thereof.
4.08. Registration Rights. The shares issued upon exercise of the Warrants
shall be Registrable Securities as defined in that certain Registration Rights
Agreement between the Company, the Warrant Holder and certain other signatories,
dated as of even date herewith (the "REGISTRATION RIGHTS AGREEMENT"). This
Warrant Agreement is subject to the terms and conditions of the Registration
Rights Agreement and the Warrant Holder is entitled to the rights set forth
therein.
4.09. Financial Statements and Information. The Company will deliver to the
Warrant Holder:
(a) As soon as practicable, but in any event not later than the date
on which such financial statements are delivered to any other preferred or
common stockholders of the Company in their capacities as such, the consolidated
balance sheet of the Company and its subsidiaries, each as at the end of such
year, and the related consolidated statement of income and consolidated
statement of cash flow and consolidating statement of income and consolidating
statement of cash flow for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such consolidated and consolidating
statements to be reasonable detail, prepared in accordance with generally
accepted accounting principles, and, with respect to such consolidated financial
statements, certified by independent certified public accountants of nationally
recognized standing selected by the Company;
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(b) as soon as practicable, but in any event not later than the date
on which such financial statements are delivered to any other preferred or
common stockholders of the Company in their capacities as such, copies of the
unaudited consolidated balance sheet of the Company and its subsidiaries and the
unaudited consolidating balance sheet of the Company and its subsidiaries, each
as at the end of such quarter, and the related consolidated statement of income
and consolidated statement of cash flow and consolidating statement of income
and consolidating statement of cash flow for the portion of the Company's fiscal
year then elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification by the
principal financial or accounting officer of the Company that the information
contained in such financial statements fairly presents the financial position of
the Company and its subsidiaries on the date thereof (subject to year-end
adjustments);
(c) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the common stockholders of the Company; and
(e) from time to time such other financial data and information as the
Warrant Holder may reasonably request.
So long as the Omnibus Agreement remains in effect, the Company shall be
deemed to have satisfied its obligations under this Section 4.09 by delivering
to the Warrant Holder the information which it is required to deliver under the
Omnibus Agreement at the times required by the Omnibus Agreement. After the
termination of the Omnibus Agreement, the Company shall deliver the information
specified in this Section 4.09 to the Warrant Holder. The Warrant Holder hereby
agrees (i) to receive and hold in strict confidence any and all information that
may be delivered to it pursuant to the provisions of this Section 4.09, unless
and until such information otherwise becomes public knowledge, (ii) not to
disclose such information to a third party, except as required by law or legal
process, and (iii) not to make use of such information for purposes of any
transactions unrelated to the transactions contemplated hereby. The provisions
of this paragraph shall survive the exercise of the Warrants and the termination
of this Agreement.
ARTICLE V
GENERAL
Section 5.01. Taxes on Issuance of Shares of Common Stock. The Company
shall pay all taxes and other governmental charges that may be imposed in
respect to the issue or delivery of shares of Common Stock other than taxes
imposed on net income of the Warrant Holder as a result of the exercise of the
Warrants and receipt of shares of Common Stock. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock in
any name other
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than that of the registered holder of the Warrant surrendered in connection with
the purchase of such shares, and in such case the Company shall not be required
to issue or deliver any stock certificate until such tax or other charge has
been paid or it has been established to the Company's satisfaction that no tax
or other charge is due.
Section 5.02. Dates and Times. If any date set forth in this Agreement
shall fall on a day other than a business day in Norwich, Connecticut, said date
shall be deemed to be the next full business day succeeding that date. All times
shall be the legal time then in effect in Norwich, Connecticut.
Section 5.03. Binding Agreement. All of the covenants and provisions of
this Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder. Nothing expressed in
this Agreement and nothing that may be implied from any of the provisions hereof
is intended, or shall be construed, to confer upon or give to any person or
corporation other than the Company and the Warrant Holder, any legal or
equitable right, remedy or claim under or by reason of this Agreement or of any
covenant, condition, stipulation, promise or agreement herein, and all
covenants, conditions, stipulations, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Holder and their respective successors and assigns.
Section 5.04. Notices. All notices under this Agreement shall be in writing
and shall be delivered by personal service or telecopy or certified mail return
receipt requested (if such service is not available, then by first class mail),
postage prepaid, to such address as may be designated from time to time by the
relevant party, and which shall initially be:
(a) If to the Company:
▇▇▇▇▇▇▇ International, Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Murtha, Cullina, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP
CityPlace I
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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(b) If to the Warrant Holder to the address set forth on the signature
page hereto
With a copy to:
Ravitch & Rice LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Any notice sent by certified mail shall be deemed to have been given three
(3) days after the date on which it is mailed. All other notices shall be deemed
given when received. No objection may be made to the manner of delivery of any
notice actually received in writing by an authorized agent of a party.
Section 5.05. Governing Law Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
regard to the conflict of laws provisions thereof. The parties irrevocably agree
that all actions arising directly or indirectly as a result or in consequence of
this Agreement and the transactions contemplated hereby shall be instituted and
litigated only in federal, state or local courts sitting in the City of
Wilmington, Delaware, and each of the parties hereto hereby consents to the
exclusive jurisdiction and venue of any such court, and waives any objection
based on forum non conveniens.
Section 5.06. Headings. The Article and Section headings herein are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
Section 5.07. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, and
all such counterparts shall together constitute but one and the same instrument.
Section 5.08. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
Section 5.09. Entire Agreement. This Agreement and the Registration Rights
Agreement (and all exhibits and/or schedules attached) are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or understandings, other than those set forth or referred
to herein with respect to the registration rights granted by the Company with
respect to the securities now or hereafter owned by the Warrant Holder.
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Section 5.10. Modification and Waiver. This Agreement, the Warrant
Certificate and any provision hereof or thereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the same is sought.
Section 5.11. Execution by Telefacsimile Transmission. Telefacsimile
transmissions of any executed original document and/or retransmission of any
executed telefacsimile transmission shall be deemed to be the same as the
delivery of an executed original. At the request of any party hereto, the other
parties hereto shall confirm telefacsimile transmissions by executing duplicate
original documents and delivering the same to the requesting party or parties.
[Rest of This Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
THE COMPANY:
▇▇▇▇▇▇▇ INTERNATIONAL, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
President
THE WARRANT HOLDER:
▇▇▇▇▇▇▇ PARTNERS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
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SIGNATURE PAGE WARRANT
AGREEMENT
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EXHIBIT A
(Form of Warrant Certificate)
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF
COMMON STOCK UNDERLYING SUCH SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
▇▇. ▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇ to Purchase 35.0% of Pro Forma Shares
▇▇▇▇▇▇▇ INTERNATIONAL, LTD.
WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:00 P.M., NORWICH, CONNECTICUT
ON OCTOBER 1, 2003 (UNLESS EXTENDED OR EARLIER TERMINATED)
This Warrant Certificate certifies that ▇▇▇▇▇▇▇ Partners, LLC, a limited
liability company organized and existing under the laws of the State of
Delaware, ("WARRANT HOLDER") or registered assigns, is the registered holder of
warrants (the "WARRANTS") to purchase that number of shares of the common
stock, par value $.01 per share ("COMMON STOCK") of ▇▇▇▇▇▇▇ International,
Ltd., a Delaware corporation (the "Company") that upon exercise will constitute
Thirty-Five percent (35.0%) (the "APPLICABLE PERCENTAGE") of the pro forma,
fully diluted number of shares of the Company's Common Stock as of the date of
exercise. For purposes hereof, the pro forma, fully diluted number of shares of
Common Stock shall be deemed to mean the sum of the following: (i) all shares
of Common Stock that are issued and outstanding as of the date of exercise;
(ii) all shares of Common Stock that are issuable upon the exercise of any then
exercisable rights, options or warrants to purchase shares of Common Stock
(including any unexercised Warrants evidenced by this Warrant Certificate and
any other Warrant Certificates issued pursuant to the Warrant Agreement (as
defined below)); and (iii) all shares of Common Stock that are issuable upon
the conversion of securities then convertible into shares of Common Stock, but
shall not include any shares of Common Stock (x) issued after October 1, 1998,
by the Company in a bona fide public offering registered under the applicable
provisions of the Securities Act of 1993, as amended, or (y) any shares of
Common Stock issuable upon the
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exercise of any stock purchase warrants issued in connection with the Company's
initial public offering consummated on December 20, 1993 (including any such
warrants issued to the underwriters of such offering or upon the exercise of
the over-allotment option granted to such underwriters) unless the expiration
date of such warrants is extended beyond the expiration date in effect as of
October 2, 1998 (in which case, such warrants shall be deemed to be included in
the calculation of the pro forma, fully diluted number of shares of Common
Stock).
Each Warrant entitles the holder thereof, upon proper exercise and subject
to the provisions of the Warrant Agreement, dated as of October 2, 1998 (the
"WARRANT AGREEMENT"), between the Company and the Warrant Holder, to purchase
one fully paid and non-assessable share of Common Stock. In order to exercise
the Warrants evidenced by this Warrant Certificate, the Warrant Holder shall
surrender this Warrant Certificate to the Company (together with the Form of
Election to Purchase duly executed) at the corporate office of the Company,
together with proper payment of the Exercise Price (as defined below). Subject
to adjustment as provided in the Warrant Agreement, the exercise price
("EXERCISE PRICE") for each Warrant evidenced hereby shall be $1.50 per share of
Common Stock. The Warrants will expire on the Expiration Date (as defined in the
Warrant Agreement). Payment of the Exercise Price shall be made in accordance
with the terms of the Warrant Agreement. As provided in the Warrant Agreement,
the Exercise Price is, upon the occurrence of certain events, subject to
modification or adjustment. The Applicable Percentage provided for herein is not
subject to modification or adjustment.
This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, including the provisions thereof relating
to the amendment thereof, which Warrant Agreement is hereby incorporated herein
by reference and made a part hereof. Reference is hereby made to the Warrant
Agreement for a full description of the rights, limitations of rights,
obligations, duties and immunities of the Company and the holder of this
Warrant Certificate. Capitalized terms not otherwise defined herein have the
meanings ascribed to them in the Warrant Agreement.
If this Warrant Certificate shall be exercised in part, the holder hereof
shall be entitled to receive upon surrender hereof another Warrant Certificate
evidencing the portion of the Applicable Percentage not exercised.
No holder of this Warrant Certificate shall be deemed to be the holder of
Common Stock or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
in the Warrant Agreement or herein be construed to confer upon the holder of
this Warrant Certificate as such any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any reorganization, issuance of
stock, reclassification or conversion of stock, change of par value, or
exchange of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise, until this Warrant Certificate shall have
been exercised and the Common Stock issuable upon the exercise hereof shall
have become issued as provided in the Warrant Agreement.
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This Warrant Certificate is expressly assignable and transferable by the
holder.
WITNESS the signature of a proper officer of the Company.
Date: October 2, 1998 ▇▇▇▇▇▇▇ INTERNATIONAL, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
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FORM OF
ELECTION TO EXERCISE
TO: ▇▇▇▇▇▇▇ INTERNATIONAL, LTD.
The undersigned hereby irrevocably elects to exercise __________ percent
(______%) of the Warrants represented by this Warrant Certificate, and to
purchase the Common Stock issuable upon the exercise of such Warrants, and
requests that certificates for such shares shall be issued in the name of
_________________________________________________
(Name)
_________________________________________________
(Address)
_________________________________________________
(Social Security or other Identifying Number)
and be delivered to
_________________________________________________
(Name)
at________________________________________________
(Address)
and, if said number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be delivered to the undersigned at the address stated above.
Dated: _____________________________________
Name of Warrant Holder:_____________________
(Please Print)
Signature:__________________________________
Address:____________________________________
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto ________________ the right represented by the within Warrant to purchase
____________ Warrant Shares and appoints ____________________ attorney-in-fact
to transfer such right on the books of ▇▇▇▇▇▇▇ International, Ltd. with full
power of substitution in the premises.
Dated: __________________________ _______________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
______________________________________
(Address)
Signed in the presence of:
_________________________________