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EXHIBIT 4
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS OR "BLUE SKY" LAWS, AND MAY NOT
BE TRANSFERRED UNLESS SO REGISTERED OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
MLC HOLDINGS, INC.
STOCK PURCHASE WARRANT
Date of Issuance: October 23, 1998 Certificate No. W-1
FOR VALUE RECEIVED, MLC Holdings, Inc., a Delaware corporation
(the "Company"), hereby grants to TC Leasing, LLC or its registered assigns
(the "Registered Holder") the right to purchase from the Company 1,090,909
shares of Warrant Stock at a price per share of $11.00 (as adjusted from time
to time hereunder, the "Exercise Price"). The amount and kind of securities
obtainable pursuant to the rights granted hereunder and the purchase price for
such securities are subject to adjustment pursuant to the provisions contained
in this Stock Purchase Warrant (this "Warrant").
This Warrant is subject to the following provisions:
Section 1. Definitions. The following terms have meanings set
forth below:
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Aggregate Exercise Price" has the meaning set forth in
Section 2B(i)(d)(1) hereof.
"Assignee" has the meaning set forth in Section 6A hereof.
"Assignment" has the meaning set forth in Section 2B(i)(c)
hereof.
"Base Price" has the meaning set forth in Section 3A(i)
hereof.
"Common Stock" means, collectively, the Company's Common
Stock, par value $.01 per share, and any capital stock of any class of the
Company hereafter authorized which is not limited to a fixed sum or percentage
of par or stated value in respect to the rights of the holders
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thereof to participate in dividends or in the distribution of assets upon any
liquidation, dissolution or winding up of the Company.
"Common Stock Deemed Outstanding" means, at any given time,
the number of shares of Common Stock actually outstanding at such time, plus
the number of shares of Common Stock deemed to be outstanding pursuant to
paragraphs 3B(i) and 3B(ii) hereof regardless of whether the Options or
Convertible Securities are actually exercisable at such time.
"Common Stock Purchase Agreement" means the Common Stock
Purchase Agreement, dated as of the date hereof, by and between the Company and
TC Leasing, LLC.
"Company" has the meaning set forth in the preface hereof.
"Convertible Securities" means any stock or securities
(directly or indirectly) convertible into or exchangeable for Common Stock,
except for any such stock or securities issued or granted pursuant to the
Company's Master Stock Incentive Plan (including any of its component plans) or
1998 Long-Term Incentive Plan, each as in effect on the Date of Issuance.
"Date of Issuance" means October 23, 1998.
"Exercise Agreement" has the meaning set forth in Section 2C
hereof.
"Exercise Period" has the meaning set forth in Section 2A
hereof.
"Exercise Price" has the meaning set forth in the preamble
hereto.
"Exercise Time" has the meaning set forth in Section 2B
hereof.
"GAAP" means United States generally accepted accounting
principles.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended from time to time.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.
"Liquidating Dividend" has the meaning set forth in Section 4
hereof.
"Market Price" means, with respect to any security on any
date, (x) if such security is quoted on NASDAQ or listed on a national
securities exchange, the closing sales price of such security on NASDAQ or a
national securities exchange, as applicable, on the last trading day prior to
such date, and (y) if such security is not quoted on NASDAQ or listed on a
national securities exchange, the fair value per share determined jointly by
the Company and the Registered Holder,
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provided that if the Company and the Registered Holder are unable to reach an
agreement within a reasonable period of time, such fair value shall be
determined by a recognized investment banking firm jointly selected by the
Company and the Registered Holder, whose determination shall be final and
binding upon the Company and the Registered Holder (and the fees and expenses
of such recognized investment banker shall be paid by the Company).
"Material Adverse Effect" has the meaning set forth in the
Common Stock Purchase Agreement.
"NASDAQ" means National Association of Securities Dealers
Automated Quotations National Market System.
"Options" means any rights or options to subscribe for or
purchase Common Stock or Convertible Securities, except for any rights or
options to subscribe for or purchase Common Stock or Convertible Securities
issued or granted pursuant to the Company's Master Stock Incentive Plan
(including any of its component plans) or 1998 Long-Term Incentive Plan, each
as in effect on the Date of Issuance.
"Organic Change" has the meaning set forth in Section 3D
hereof.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means a sale of Common Stock to the public
in an offering pursuant to an effective registration statement filed with the
SEC pursuant to the Securities Act, as then in effect, provided that a Public
Offering shall not include an offering made in connection with a business
acquisition or combination or an employee benefit plan.
"Purchase Rights" has the meaning set forth in Section 5
hereof.
"Purchaser" has the meaning set forth in Section 2B(i)(A)
hereof.
"Requirement Date" has the meaning set forth in Section 6B
hereof.
"Requirement Notice" has the meaning set forth in Section 6A
hereof.
"Sale of the Company" means, whether in a single transaction
or in a series of related transactions, (i) a sale of all or substantially all
of the assets of the Company and its Subsidiaries on a consolidated basis, or
(ii) the transfer or other disposition of more than 50% of the outstanding
Common Stock or the outstanding common equity securities of any of the
Company's Subsidiaries (in each case whether accomplished by stock purchase,
asset purchase, merger, recapitalization, reorganization or other transaction).
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"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SEC" means the United States Securities and Exchange
Commission and any governmental body or agency succeeding to the functions
thereof.
"Stockholders Agreement" means the Stockholders Agreement,
dated as of the date hereof, among the Company and certain of its stockholders.
"Subsidiary" means any Person with respect to which the
Company (or a Subsidiary thereof) owns a majority of the common stock or has
the power to vote or direct the voting of sufficient securities to elect a
majority of the directors or other governing body.
"Warrant" has the meaning set forth in the preamble hereto.
"Warrant Stock" means the Company's Common Stock, par value
$.01 per share; provided that if there is a change such that the securities
issuable upon exercise of this Warrant are issued by an entity other than the
Company or there is a change in the type or class of securities so issuable,
then the term "Warrant Stock" shall mean one share of the security issuable
upon exercise of the Warrant if such security is issuable in shares, or shall
mean the smallest unit in which such security is issuable if such security is
not issuable in shares.
Section 2. Exercise of Warrant.
2A. Exercise Period. The Registered Holder may exercise,
in whole or in part (but not as to a fractional share of Warrant Stock), the
purchase rights represented by this Warrant at any time and from time to time
after the Date of Issuance to and including December 31, 2001 (as may be
extended pursuant to Section 2B(vi) hereof, the "Exercise Period").
2B. Exercise Procedure.
(i) This Warrant shall be deemed to have
been exercised when the Company has received all of the following items (the
"Exercise Time"):
(a) a completed Exercise
Agreement, executed by the Person exercising all or part of
the purchase rights represented by this Warrant (the
"Purchaser");
(b) this Warrant;
(c) if this Warrant is not
registered in the name of the Purchaser, an assignment (an
"Assignment") in the form set forth in Exhibit II hereto
evidencing
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the assignment of this Warrant to the Purchaser, in which case
the Registered Holder shall have complied with the provisions
set forth in Section 7 hereof; and
(d) either (1) a check or wire
transfer payable to the Company in an amount equal to the
product of the Exercise Price multiplied by the number of
shares of Warrant Stock being purchased upon such exercise
(the "Aggregate Exercise Price"), (2) with the prior approval
of the Company, the surrender to the Company of debt or equity
securities of the Company having a Market Price equal to the
Aggregate Exercise Price of the Warrant Stock being purchased
upon such exercise (provided that for purposes of this
subsection, the Market Price of any note or other debt
security or any preferred stock shall be deemed to be equal to
the aggregate outstanding principal amount or liquidation
value thereof plus all accrued and unpaid interest thereon or
accrued or declared and unpaid dividends thereon) or (3) with
the prior approval of the Company, a written notice to the
Company that the Purchaser is exercising the Warrant (or a
portion thereof) by authorizing the Company to withhold from
issuance a number of shares of Warrant Stock issuable upon
such exercise of the Warrant which when multiplied by the
Market Price of the Warrant Stock is equal to the Aggregate
Exercise Price (and such withheld shares shall no longer be
issuable under this Warrant).
(ii) Certificates for shares of Warrant Stock
purchased upon exercise of this Warrant shall be delivered by the Company to
the Purchaser within five business days after the date of the Exercise Time.
Unless this Warrant has expired or all of the purchase rights represented
hereby have been exercised, the Company shall prepare a new Warrant,
substantially identical hereto, representing the rights formerly represented by
this Warrant which have not expired or been exercised and shall, within such
five-business day period, deliver such new Warrant to the Person designated for
delivery in the Exercise Agreement.
(iii) The Warrant Stock issuable upon the
exercise of this Warrant shall be deemed to have been issued to the Purchaser
at the Exercise Time, and the Purchaser shall be deemed for all purposes to
have become the record holder of such Warrant Stock at the Exercise Time.
(iv) The issuance of certificates for shares
of Warrant Stock upon exercise of this Warrant shall be made without charge to
the Registered Holder or the Purchaser for any issuance tax in respect thereof
or other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Warrant Stock. Each share of Warrant Stock
issuable upon exercise of this Warrant shall, upon payment of the Exercise
Price therefor, be fully paid and nonassessable and free from all Liens with
respect to the issuance thereof.
(v) The Company shall not close its books
against the transfer of this Warrant or of any share of Warrant Stock issued or
issuable upon the exercise of this Warrant in any manner which interferes with
the timely exercise of this Warrant.
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(vi) The Company and the Registered Holder or
Purchaser, as applicable, shall use their best efforts to make any filings with
any governmental body, NASDAQ or any stock exchange in which the Warrant Stock
is listed or obtain any approvals of any governmental body, NASDAQ, any stock
exchange in which the Warrant Stock is listed or the stockholders of the
Company (including those in connection with under the HSR Act) required prior
to or in connection with any exercise of this Warrant within a reasonable
period of time. The Exercise Period shall be extended to the extent necessary
to allow such filings to be made and such approvals to be obtained. The costs
and expenses (including reasonable attorneys fees) associated with any filing
or approval required (including those in connection with the HSR Act) shall be
paid by the Company.
(vii) Notwithstanding any other provision
hereof, if an exercise of any portion of this Warrant is to be made in
connection with a Public Offering or the Sale of the Company, the exercise of
any portion of this Warrant may, at the election of the holder hereof, be
conditioned upon the consummation of the Public Offering or the Sale of the
Company in which case such exercise shall not be deemed to be effective until
the consummation of such transaction.
(viii) The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Warrant Stock
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Warrant Stock issuable upon the exercise of all outstanding
Warrants. The Company shall take all such actions as may be necessary to
assure that all such shares of Warrant Stock may be so issued without violation
of any applicable law or governmental regulation or any requirements of any
domestic securities exchange upon which shares of Warrant Stock may be listed
(except for official notice of issuance which shall be immediately delivered by
the Company upon each such issuance). The Company shall not take any action
which would cause the number of authorized but unissued shares of Warrant Stock
to be less than the number of such shares required to be reserved hereunder for
issuance upon exercise of the Warrants.
2C. Exercise Agreement. Upon any exercise of this
Warrant, the exercise agreement (the "Exercise Agreement") shall be
substantially in the form set forth in Exhibit I hereto, except that if the
shares of Warrant Stock are not to be issued in the name of the Person in whose
name this Warrant is registered, the Exercise Agreement shall also state the
name of the Person to whom the certificates for the shares of Warrant Stock are
to be issued, and if the number of shares of Warrant Stock to be issued does
not include all the shares of Warrant Stock purchasable here under, it shall
also state the name of the Person to whom a new Warrant for the unexercised
portion of the rights hereunder is to be delivered. Such Exercise Agreement
shall be dated the actual date of execution thereof.
Section 3. Adjustment of Exercise Price and Number of Shares.
In order to prevent dilution of the rights granted under this Warrant, the
Exercise Price shall be subject to adjustment from time to time as provided in
this Section 3, and the number of shares of Warrant Stock obtainable upon
exercise of this Warrant shall be subject to adjustment from time to time as
provided in this Section 3.
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3A. Adjustment of Exercise Price and Number of Shares
upon Issuance of Common Stock.
(i) Except as set forth in Section 3A(iii), if
and whenever the Company issues or sells, or in accordance with Section 3B is
deemed to have issued or sold, any shares of Common Stock for a gross
consideration per share (not net of discounts and commissions to underwriters)
less than either (A) $11.00 (as such amount is proportionately adjusted for
stock splits, stock combinations, stock dividends and recapitalizations
affecting the Common Stock after the Date of Issuance, the "Base Price") or (B)
the Market Price of the Common Stock determined as of the date of such issue or
sale, then immediately upon such issue or sale the Exercise Price shall be
reduced to whichever of the following Exercise Prices is lower:
(a) the Exercise Price determined by
dividing (1) the sum of (x) the product derived by multiplying
the Exercise Price in effect immediately prior to such issue
or sale by the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue or sale, plus (y)
the gross consideration (not net of discounts and commissions
to underwriters), if any, received by the Company upon such
issue or sale, by (2) the number of shares of Common Stock
Deemed Outstanding immediately after such issue or sale; or
(b) the Exercise Price determined by
multiplying the Exercise Price in effect immediately prior to
such issue or sale by a fraction, the numerator of which shall
be the sum of (1) the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue or sale multiplied
by the Market Price of the Common Stock determined as of the
date of such issuance of sale, plus (2) the gross
consideration (not net of discounts and commissions to
underwriters), if any, received by the Company upon such issue
or sale, and the denominator of which shall be the product
derived by multiplying the Market Price of the Common Stock by
the number of shares of Common Stock Deemed Outstanding
immediately after such issue or sale.
(ii) Upon each such adjustment of the Exercise
Price hereunder, the number of shares of Warrant Stock acquirable upon exercise
of this Warrant shall be adjusted to the number of shares determined by
multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Warrant Stock acquirable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product thereof
by the Exercise Price resulting from such adjustment.
(ii) Notwithstanding the foregoing, there shall be no
adjustment to the Exercise Price or the number of shares of Warrant Stock
obtainable upon exercise of this Warrant with respect to (w) the issuance and
sale of Common Stock, or the granting of any rights or options to subscribe for
or purchase Common Stock or Convertible Securities, pursuant to an acquisition
by the Company or any Subsidiary, (x) the granting of any rights or options to
subscribe for or purchase
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Common Stock or Convertible Securities pursuant to the Company's Master Stock
Incentive Plan (including any of its component plans) or 1998 Long-Term
Incentive Plan, each as in effect on the Date of Issuance, (y) the exercise of
such rights and options or (z) the issuance and sale of Common Stock pursuant to
the Employee Stock Purchase Plan, as in effect on the date hereof.
3B. Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section 3A, the
following shall be applicable:
(i) Issuance of Rights or Options. If the
Company in any manner grants or sells any Options and the price per
share for which Common Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible Securities
issuable upon exercise of such Options, is less than either (a) the
Base Price in effect immediately prior to the time of the granting or
sale of such Options or (b) the Market Price determined as of such
time, then the total maximum number of shares of Common Stock issuable
upon the exercise of such Options, or upon conversion or exchange of
the total maximum amount of such Convertible Securities issuable upon
the exercise of such Options, shall be deemed to be outstanding and to
have been issued and sold by the Company at such time for such price
per share. For purposes of this Section 3B(i), the "price per share
for which Common Stock is issuable upon exercise of such Options or
upon conversion or exchange of such Convertible Securities" is
determined by dividing (A) the total amount, if any, received or
receivable by the Company as consideration for the granting or sale of
such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such
Options, plus in the case of such Options which are exercisable into
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock
issuable upon exercise of such Options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise
of such Options. No further adjustment of the Exercise Price shall be
made upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
(ii) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities and
the price per share for which Common Stock is issuable upon conversion
or exchange thereof is less than either (a) the Base Price in effect
immediately prior to the time of such issue or sale or (b) the Market
Price determined as of such time, then the maximum number of shares of
Common Stock issuable upon conversion or exchange of such Convertible
Securities shall be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. For the purposes of
this Section 3B(ii), the "price per share for which Common Stock is
issuable upon conversion or exchange thereof" is determined by
dividing (A) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities,
plus
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the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof, by (B)
the total maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. No further
adjustment of the Exercise Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustments
of the Exercise Price had been or are to be made pursuant to other
provisions of this Section 3B, no further adjustment of the Exercise
Price shall be made by reason of such issue or sale.
(iii) Change in Option Price or Conversion Rate.
If the purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion or exchange
of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock
changes at any time, the Exercise Price in effect at the time of such
change shall be adjusted immediately to the Exercise Price which would
have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold and the number of
shares of Warrant Stock shall be correspondingly adjusted. For
purposes of this Section 3B, if the terms of any Option or Convertible
Security which was outstanding as of the date of issuance of this
Warrant are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the
Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such
change; provided that no such change shall at any time cause the
Exercise Price hereunder to be increased.
(iv) Treatment of Expired Options and Unexercised
Convertible Securities. Upon the expiration of any Option or the
termination of any right to convert or exchange any Convertible
Securities without the exercise of such Option or right, the Exercise
Price then in effect and the number of shares of Warrant Stock
acquirable hereunder shall be adjusted immediately to the Exercise
Price and the number of shares which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued. For purposes of this
Section 2B, the expiration or termination of any Option or Convertible
Security which was outstanding as of the date of issuance of this
Warrant shall not cause the Exercise Price hereunder to be adjusted
unless, and only to the extent that, a change in the terms of such
Option or Convertible Security caused it to be deemed to have been
issued after the date of issuance of this Warrant.
(v) Calculation of Consideration Received. If
any Common Stock, Options or Convertible Securities are issued or sold
or deemed to have been issued or sold for cash, the consideration
received therefor shall be deemed to be the net amount received by the
Company therefor. In case any Common Stock, Options or Convertible
Securities are
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issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be the
fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company shall be the Market Price thereof as of the
date of receipt. In case any Common Stock, Options or Convertible
Securities are issued to the owners of the non- surviving entity in
connection with any merger in which the Company is the surviving
entity the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Stock, Options
or Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities shall be determined
jointly by the Company and the Registered Holder. If such parties are
unable to reach agreement within a reasonable period of time, such
fair value shall be determined by a recognized investment banking firm
jointly selected by the Company and the Registered Holder. The
determination of such recognized investment banker shall be final and
binding on the Company and the Registered Holder of the Warrants, and
the fees and expenses of such recognized investment banker shall be
paid by the Company.
(vi) Integrated Transactions. In case any Option
is issued in connection with the issue or sale of other securities of
the Company, together comprising one integrated transaction in which
no specific consideration is allocated to such Options by the parties
thereto, the Options shall be deemed to have been issued without
consideration.
(vii) Treasury Shares. The number of shares of
Common Stock outstanding at any given time does not include shares
owned or held by or for the account of the Company or any Subsidiary,
and the disposition of any shares so owned or held shall be considered
an issue or sale of Common Stock.
(viii) Record Date. If the Company takes a record
of the holders of Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in Common Stock,
Options or in Convertible Securities or (B) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase,
as the case may be.
3C. Subdivision or Combination of Common Stock. If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced and the
number of shares of Warrant Stock obtainable upon exercise of this Warrant
shall be proportionately increased. If the Company at any time combines (by
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
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immediately prior to such combination shall be proportionately increased and
the number of shares of Warrant Stock obtainable upon exercise of this Warrant
shall be proportionately decreased.
3D. Reorganization, Reclassification, Consolidation, Merger
or Sale. Except as provided in Section 9, any recapitalization,
reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Company's assets or other transaction, which in each
case is effected in such a way that the holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for Common Stock is referred to herein as
"Organic Change." Prior to the consummation of any Organic Change, the Company
shall make appropriate provision (in form and substance satisfactory to the
Registered Holder) to insure that the Registered Holder shall thereafter have
the right to acquire and receive, in lieu of or addition to (as the case may
be) the shares of Warrant Stock immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such shares of stock, securities
or assets as may be issued or payable with respect to or in exchange for the
number of shares of Warrant Stock immediately theretofore acquirable and
receivable upon exercise of this Warrant had such Organic Change not taken
place. In any such case, the Company shall make appropriate provision (in form
and substance satisfactory to the Registered Holder) with respect to the
Registered Holders' rights and interests to insure that the provisions of this
Section 3 and Sections 4 and 5 hereof shall thereafter be applicable to the
Warrants. The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof, the successor entity (if other than
the Company) resulting from consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance satisfactory
to the Registered Holder), the obligation to deliver to the Registered Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
3E. Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 3 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features
(except in each case pursuant to the Company's Master Stock Incentive Plan
(including any of its component plans) or 1998 Long-Term Incentive Plan, each
as in effect on the Date of Issuance)), then the Company's board of directors
shall make an appropriate adjustment in the Exercise Price and the number of
shares of Warrant Stock obtainable upon exercise of this Warrant so as to
protect the rights of the Registered Holder; provided that no such adjustment
shall increase the Exercise Price or decrease the number of shares of Warrant
Stock obtainable as otherwise determined pursuant to this Section 3.
3F. Notices.
(i) Immediately upon any adjustment of the
Exercise Price, the Company shall give written notice thereof to the Registered
Holder, setting forth in reasonable detail and certifying the calculation of
such adjustment.
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(ii) The Company shall give written notice to the
Registered Holder at least 20 days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any Organic Change, Sale of the Company, dissolution or
liquidation.
(iii) The Company shall also give written notice to
the Registered Holders at least 20 days prior to the date on which any Organic
Change, dissolution or liquidation shall take place.
Section 4. Liquidating Dividends. If the Company declares or
pays a dividend upon the Common Stock payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with GAAP) except for a
stock dividend payable in shares of Common Stock (a "Liquidating Dividend"),
then the Company shall pay to the Registered Holder at the time of payment
thereof the Liquidating Dividend which would have been paid to the Registered
Holder on the Warrant Stock (after netting out the Aggregate Exercise Price)
had this Warrant been fully exercised immediately prior to the date on which a
record is taken for such Liquidating Dividend, or, if no record is taken, the
date as of which the record holders of Common Stock entitled to such dividends
are to be determined.
Section 5. Purchase Rights. If at any time the Company
grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then the
Registered Holder shall be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such holder could
have acquired if the Registered Holder had held the number of shares of Warrant
Stock acquirable upon complete exercise of this Warrant immediately before the
date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights.
Section 6. Company's Right to Require Exercise.
6A. Requirement Notice. Subject to Section 6B, if on any
date during the Exercise Period the daily closing sales price of a share of
Warrant Stock quoted on NASDAQ equals or exceeds $11.00 per share (as such
amount is proportionately adjusted for stock splits, stock combinations, stock
dividends and recapitalizations affecting the Warrant Stock after the Date of
Issuance) for the 20 consecutive trading days immediately prior to such date,
the Company may, by giving written notice (the "Requirement Notice") to the
Registered Holder within three business days of such date, require the
Registered Holder to exercise, in whole or in part (but not as to a fractional
share of Warrant Stock), the purchase rights represented by this Warrant within
15 business days of receipt of the Requirement Notice; provided, however such
15 business day period shall be extended to the extent necessary for the
Company and the Registered Holder to make any filings with any governmental
body, NASDAQ or any stock exchange in which the Warrant Stock is listed or
obtain
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any approvals of any governmental body, NASDAQ, any stock exchange in which the
Warrant Stock is listed or the stockholders of the Company (including those in
connection with under the HSR Act) required prior to or in connection with any
exercise of this Warrant. Except as explicitly set forth in this Section 6,
the exercise of this Warrant shall follow the procedures set forth in Section
2B. Notwithstanding anything in this Section 6 to the contrary, the Registered
Holder can satisfy its obligations under this Section 6 by assigning this
Warrant pursuant to Section 8 to another Person (the "Assignee") within 10
business days of receipt of the Requirement Notice, so long as the Assignee
exercises the assigned Warrant within 10 business days of such assignment;
provided, however such 10 business day period shall be extended to the extent
necessary for the Company and the Assignee to make any filings with any
governmental body, NASDAQ or any stock exchange in which the Warrant Stock is
listed or obtain any approvals of any governmental body, NASDAQ, any stock
exchange in which the Warrant Stock is listed or the stockholders of the
Company (including those in connection with under the HSR Act) required prior
to or in connection with any exercise of the assigned Warrant.
6B. Conditional Precedent to Requirement Notice.
Notwithstanding anything in Section 6A to the contrary, the obligations of the
Registered Holder or the Assignee, as applicable, under Section 6A shall be
subject to the Registered Holder or the Assignee, as applicable, having
received on or before the date of the closing of the exercise of the Warrant
pursuant to this Section 6 (the "Requirement Date") a certificate signed by the
chief executive officer of the Company certifying that as of the Requirement
Date, (x) the representations and warranties of the Company set forth in the
Common Stock Purchase Agreement shall be true, correct and complete in all
respects on and as of the Requirement Date to the same extent as though made on
and as of such date, except to the extent such representations and warranties
specifically related to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all respects on and as
of such earlier date (provided that the requirements of this clause (x) shall
be deemed satisfied unless all inaccuracies of such representations and
warranties in the aggregate have a Material Adverse Effect, ignoring any
qualification as to materiality or Material Adverse Effect contained therein),
(y) the Company shall have performed in all material respects all agreements
which the Common Stock Purchase Agreement provides shall be performed by the
Company and (z) the Company is not subject to any debt or credit agreement
under which a default, an event of default, a right of acceleration or a right
to bring an action against any property of the Company may be triggered if (A)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ does not maintain effective control of the Company or MLC
Group, Inc., or (B) any specified Person does not own any specified number or
percentage of shares of Common Stock (provided, however, such agreement can
provide a default, an event of default, a right of acceleration or a right to
bring an action against any property of the Company may be triggered if (1) one
or more of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, any of their lineal
descendants or siblings and any trust formed and maintained solely for the
benefit of any such Persons beneficially owns in the aggregate less than
1,600,000 shares of Common Stock, or (2) one or more of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, any other employee of the Company, any of their lineal descendants,
siblings or spouses and any trust formed and maintained solely for the benefit
of any such Persons beneficially owns in the aggregate less than 2,000,000
shares of Common Stock).
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6C. No Manipulation. Each of the parties hereto hereby
agrees that neither it nor any of its Affiliates shall take any action or omit
to take any action which increases or decreases the daily closing sales price
of a share of Warrant Stock quoted on NASDAQ for the primary purpose of
effecting whether or not the Company shall have the right to require the
Registered Holder to exercise, in whole or in part, the purchase rights
represented by this Warrant.
Section 7. No Voting Rights; Limitations of Liability. Except
as otherwise provided in the Stockholders Agreement, this Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision hereof, in the absence of affirmative action by
the Registered Holder to purchase Warrant Stock, and no enumeration herein of
the rights or privileges of the Registered Holder shall give rise to any
liability of such holder for the Exercise Price of Warrant Stock acquirable by
exercise hereof or as a stockholder of the Company.
Section 8. Warrant Transferable. Subject to federal and state
securities laws, this Warrant and all rights hereunder are transferable, in
whole or in part, without charge to the Registered Holder, upon surrender of
this Warrant with a properly executed Assignment at the address of the Company
set forth in Section 12.
Section 9. Sale of the Company. Notwithstanding anything
herein the contrary, prior to the consummation of a Sale of the Company, the
Registered Holder shall be given the option, in its sole discretion, to either
(x) exercise this Warrant prior to the consummation of the Sale of the Company
and participate in such sale as a holder of such class of Common Stock, or (y)
upon the consummation of the Sale of the Company, receive in exchange for this
Warrant consideration equal to the amount determined by multiplying (1) the
same amount of consideration per share of a class of Common Stock received by
holders of such class of Common Stock in connection with the Approved Sale less
the Exercise Price by (2) the number of shares of such class of Common Stock
represented by this Warrant.
Section 10. Warrant Exchangeable for Different Denominations.
This Warrant is exchangeable, upon the surrender hereof by the Registered
Holder at the address of the Company set forth in Section 12, for new Warrants
of like tenor representing in the aggregate the purchase rights hereunder, and
each of such new Warrants shall represent such portion of such rights as is
designated by the Registered Holder at the time of such surrender. The date
the Company initially issues this Warrant shall be deemed to be the "Date of
Issuance" hereof regardless of the number of times new certificates
representing the unexpired and unexercised rights formerly represented by this
Warrant shall be issued. Each holder of a new Warrant shall have the rights and
privileges of the Registered Holder of this Warrant as provided herein.
Section 11. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation
of any certificate evidencing this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Company (provided that if the Registered Holder is ▇▇▇▇▇▇ Equity Investors III,
L.P. or any of its Affiliates,
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then its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.
Section 12. Notices. Any notice provided for in this Warrant
shall be in writing and shall be either personally delivered, or sent via
facsimile, or mailed first class mail (postage prepaid) or sent by reputable
overnight courier service (charges prepaid) to such Person as follows:
if to the Company:
MLC Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Bird, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III, Esq.
if to the Registered Holder:
c/▇ ▇▇▇▇▇▇ Equity Investors III, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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or at such address or to the attention of such other Person as the recipient
party has specified by prior written notice to the sending party. Notices will
be deemed to have been given hereunder when delivered personally or sent via
facsimile (against receipt therefor), five business days after deposit in the
U.S. mail and one business day after deposit with a reputable overnight courier
service.
Section 13. Amendment and Waiver. Except as otherwise
provided herein, the provisions of this Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Registered Holder.
Section 14. Descriptive Headings; Governing Law. The
descriptive headings of the several sections of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporation
laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal law of the State of Delaware, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Delaware.
* * * *
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IN WITNESS WHEREOF, the Company has caused this Stock Purchase
Warrant to be signed and attested by its duly authorized officers under its
corporate seal and to be dated the Date of Issuance hereof.
MLC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
[Corporate Seal]
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Secretary
ACKNOWLEDGED AND AGREED TO
AS OF THE DATE OF ISSUANCE:
TC LEASING, LLC
By: ▇▇▇▇▇▇ EQUITY INVESTORS III, L.P., its managing member
By: TC EQUITY PARTNERS, L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
18
EXHIBIT I
EXERCISE AGREEMENT
Dated:
-------------
The undersigned, pursuant to the provisions set forth in the
attached Stock Purchase Warrant (Certificate No. W-____), hereby agrees to
subscribe for the purchase of ______ shares of the Warrant Stock covered by
such Stock Purchase Warrant and makes payment herewith in full therefor at the
price per share provided by such Stock Purchase Warrant. A certificate for
such shares of Warrant Stock shall be made in the name of _______________,
and shall be mailed to the following address:___________________________. [A
new stock purchase warrant for the unexercised portion of the rights under the
attached Stock Purchase Warrant shall be issued in the name of ______________,
and shall be mailed to the following address: _____________________________.]
Name of Registered Holder:
-------------------------
Signature:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
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EXHIBIT II
ASSIGNMENT
Dated:
--------------
FOR VALUE RECEIVED, _________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Stock Purchase Warrant (Certificate No. W-_____) with respect to the
number of shares of the Warrant Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
----------------- ------- -------------
Name of Assignor:
----------------------------------
Signature:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------