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EXHIBIT 10.8
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE
OR CONVERSION OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE SUCH A REGISTRATION IS IN EFFECT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE
OR CONVERSION OF THIS WARRANT ARE ENTITLED TO CERTAIN
REGISTRATION RIGHTS AND TO CERTAIN OTHER BENEFITS AND
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A WARRANT
AND DEBENTURE COMMITMENT DATED MARCH 7, 1997 AND IN A
REGISTRATION RIGHTS AGREEMENT AND A TAG-ALONG, TRANSFER
RESTRICTION AND BRING-ALONG AGREEMENT, EACH DATED AS OF
NOVEMBER 28, 1995, AND AS FROM TIME TO TIME AMENDED AND
IN EFFECT. THE COMPANY WILL FURNISH A COPY OF SUCH
AGREEMENTS TO THE HOLDER OF THIS WARRANT WITHOUT CHARGE
UPON WRITTEN REQUEST.
TWEETER HOME ENTERTAINMENT GROUP, INC.
Common Stock Purchase Warrant
THIS WARRANT IS BEING ISSUED IN EXCHANGE FOR A NEW ENGLAND AUDIO CO., INC.
COMMON STOCK PURCHASE WARRANT DATED AS OF MARCH 7, 1997.
No.CG-1 June 5, 1998
Tweeter Home Entertainment Group, Inc., a Delaware corporation (the
"COMPANY"), for value received, hereby certifies that Weston Presidio Offshore
Capital C.V., or registered assigns, is entitled to purchase from the Company,
at the purchase price per share of $6.46 (the "INITIAL WARRANT PRICE"), at any
time or from time to time prior to 5:00 p.m., Boston, Massachusetts time, on
June 30, 2002 (the "EXPIRATION DATE"), 11,832 duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock, $.01 par value (the "COMMON
STOCK"), of the Company all subject to the terms, conditions and adjustments set
forth below in this Warrant. This Warrant is one of the Common Stock Purchase
Warrants
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(the "WARRANTS", such term to include any such warrants issued in substitution
therefor) originally issued pursuant to a Warrant and Debenture Commitment dated
March 7, 1997 (the "WARRANT AND DEBENTURE COMMITMENT") among the Company, the
holder hereof and certain other original holders of Warrants.
1. DEFINITIONS.
"ADDITIONAL SHARES OF COMMON STOCK" means all shares of Common Stock
issued (or, pursuant to Section 3.1.3 or 3.1.4, deemed to be issued) by the
Company after the Original Issue Date, other than shares of Common Stock issued
or issuable at any time:
(a) upon the issuance or exercise or conversion of the
Warrants in accordance with their terms;
(b) and excluded from the definition of "Additional
Shares of Common Stock" in section 8.4.1(d) of the Certificate of Designation;
(c) by way of dividend or other distribution on shares of
capital stock excluded from the definition of "Additional Shares of Common
Stock" by the foregoing clauses (a) and (b).
"BOOK VALUE" means the Company's consolidated shareholders' equity per
share of Common Stock on a fully diluted basis (assuming the exercise of all
Warrants, the conversion of all Preferred Stock into Common Stock and the
exercise of all other then exercisable options, warrants and other purchase
rights), determined in accordance with generally accepted accounting principles,
as of the end of its fiscal quarter most recently completed prior to the date of
determination.
"BUSINESS DAY" means any day other than a Saturday or a Sunday or a day
on which commercial banking institutions in Boston, Massachusetts or New York,
New York are authorized by law to be closed.
"CERTIFICATE OF DESIGNATION" means the Certificate of Vote of Directors
Establishing a Series of a Class of Stock of New England Audio Co., Inc. filed
by the Company as of November 28, 1995, as from time to time in effect.
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"COMMON STOCK" is defined in the preamble.
"COMPANY" is defined in the preamble, and includes any corporation
which shall succeed to or assume the obligations of the Company hereunder in
compliance with Section 3.
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"CONVERTIBLE SECURITIES" means any indebtedness, shares or other
securities convertible into or exchangeable for Common Stock, other than the
Preferred Stock.
"CURRENT MARKET PRICE" means, on any date, the average daily Market
Price during the period of the most recent 20 days, ending on such date, on
which the national securities exchanges were open for trading, except that if no
class of the Common Stock is then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, the Current Market
Price shall be the Market Price on such date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"EXPIRATION DATE" is defined in the preamble.
"INITIAL WARRANT PRICE" is defined in the preamble.
"MARKET PRICE" means, on any date, the amount per share of Common Stock
equal to (a) the last sale price of Common Stock, regular way, on such date or,
if no such sale takes place on such date, the average of the closing bid and
asked prices thereof on such date, in each case as officially reported on the
principal national securities exchange on which Common Stock is then listed or
admitted to trading, or (b) if Common Stock is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the NASD, the last trading price of Common Stock on
such date, or (c) if no trading occurred on such date or if Common Stock is not
so designated, the average of the closing bid and asked prices of Common Stock
on such date as shown by the NASD automated quotation system, or (d) if Common
Stock is not then listed or admitted to trading on any national exchange or
quoted in the over-the-counter market, the higher of (i) Book Value or (ii) the
fair value thereof determined in good faith by the Board of Directors of the
Company as of a date which is within 15 days of the date as of which the
determination is to be made.
"NASD" means the National Association of Securities Dealers, Inc.
"OPTIONS" means rights, options or warrants to subscribe for, purchase
or otherwise acquire either Common Stock or Convertible Securities.
"ORIGINAL ISSUE DATE" means March 7, 1997.
"OTHER SECURITIES" means any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 3 or otherwise.
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"PERSON" means a corporation, an association, a partnership, an
organization, a business trust, a limited liability company, a trust, an
individual, a government or political subdivision thereof or a governmental
agency.
"PREEMPTIVE GROUP" is defined in Section 10.1 of the Certificate of
Designation.
"PURCHASE AGREEMENT" means the Amended and Restated Preferred Stock
Purchase Agreement dated as of March 30,1997 (as from time to time in effect)
among the Company, as assignee of New England Audio Co., Inc., and the preferred
stock purchasers named therein.
"REGISTRATION RIGHTS AGREEMENT" means the Amended and Restated
Registration Rights Agreement dated as of March 30, 1997, among the Company, as
assignee of New England Audio Co., Inc., and certain of its stockholders, as
from time to time in effect.
"SECURITIES ACT" means the Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"PREFERRED STOCK" means the Company's Series A Redeemable Convertible
Preferred Stock, $.01 par value, and the Company's Series B Redeemable
Convertible Preferred Stock, $.01 par value, each issued pursuant to the
Purchase Agreement.
"WARRANT AND DEBENTURE COMMITMENT" is defined in the preamble.
"WARRANT PRICE" is defined in Section 3.1.
"WARRANT SHARES" means the shares of Common Stock or Other Securities
issuable upon exercise or conversion of this Warrant.
"WARRANTS" is defined in the preamble.
2. EXERCISE OR CONVERSION OF WARRANT.
2.1. MANNER OF EXERCISE OR CONVERSION; PAYMENT.
2.1.1. EXERCISE. This Warrant may be exercised by the holder
hereof, in whole or in part, during normal business hours on any
Business Day on or prior to the Expiration Date, by surrender of this
Warrant to the Company at its office maintained pursuant to Section
6.2(a), accompanied by a subscription in substantially the form
attached to this Warrant duly executed by such holder and accompanied
by payment, in cash or by check payable to the order of the Company, in
the amount obtained by multiplying (a) the number of shares of Common
Stock (without giving effect to any adjustment thereof) designated in
such subscription by (b) the Initial Warrant Price,
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and such holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully paid and nonassessable Warrant
Shares determined as provided in Section 3.
2.1.2. CONVERSION. This Warrant may be converted by the
holder hereof, in whole or in part, into Warrant Shares, during normal
business hours on any Business Day on or prior to the Expiration Date
by surrender of this Warrant to the Company at its office maintained
pursuant to Section 6.2(a), accompanied by a conversion notice in
substantially the form attached to this Warrant duly executed by such
holder, and such holder shall thereupon be entitled to receive a number
of duly authorized, validly issued, fully paid and nonassessable
Warrant Shares equal to:
(a) an amount equal to:
(i) an amount equal to (A) the number
of Warrant Shares determined as
provided in Section 3 which such
holder would be entitled to receive
upon exercise of this Warrant for
the number of shares of Common
Stock designated in such conversion
notice MULTIPLIED BY (B) the
Current Market Price of each such
Warrant Share so receivable upon
such exercise
MINUS
(ii) an amount equal to (A) the number
of shares of Common Stock (without
giving effect to any adjustment
thereof) designated in such
conversion notice MULTIPLIED BY (B)
the Initial Warrant Price
DIVIDED BY
(b) such Current Market Price of each such
Warrant Share.
For all purposes of this Warrant (other than this Section 2.1), any
reference herein to the exercise of this Warrant shall be deemed to
include a reference to the conversion of this Warrant into Warrant
Shares in accordance with the terms of this Section 2.1.2.
2.2. WHEN EXERCISE EFFECTIVE. Each exercise of this Warrant shall
be deemed to have been effected immediately prior to the close of business on
the Business Day on which this Warrant shall have been surrendered to the
Company as provided in Section 2.1, and at such time the Person in whose name
any certificate for Warrant Shares shall be issuable upon such exercise as
provided in Section 2.3 shall be deemed to have become the holder of record
thereof.
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2.3. DELIVERY OF STOCK CERTIFICATES, ETC. As soon as practicable
after each exercise of this Warrant, in whole or in part, and in any event
within five Business Days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the holder hereof or, subject to Section 5, as such holder
(upon payment by such holder of any applicable transfer taxes) may direct:
(a) a certificate for the number of duly
authorized, validly issued, fully paid and nonassessable Warrant Shares
to which such holder shall be entitled upon such exercise PLUS, in lieu
of any fractional share to which such holder would otherwise be
entitled, cash in an amount equal to the same fraction of the Market
Price per share on the Business Day immediately preceding the date of
such exercise; and
(b) in case such exercise is in part only, a new
Warrant of like tenor, dated the date hereof and calling in the
aggregate on the face thereof for the number of shares of Common Stock
equal (without giving effect to any adjustment thereof) to the number
of such shares called for on the face of this Warrant minus the number
of such shares designated by the holder upon such exercise as provided
in Section 2.1.
2.4. COMPANY TO REAFFIRM OBLIGATIONS. The Company will, at the time
of each exercise of this Warrant, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder all
rights (including any rights pursuant to the Registration Rights Agreement with
respect to the Warrant Shares issued upon such exercise) to which such holder
shall continue to be entitled after such exercise in accordance with the terms
of this Warrant; PROVIDED, HOWEVER, that if the holder of this Warrant shall
fail to make any such request, such failure shall not affect the continuing
obligation of the Company to afford such rights to such holder.
3. ADJUSTMENT OF WARRANT SHARES AND WARRANT PRICE.
3.1. ADJUSTMENT OF WARRANT SHARES AND WARRANT PRICE DUE TO
ADDITIONAL SHARES. The number of Warrant Shares which the holder of this Warrant
shall be entitled to receive upon the exercise hereof shall be determined by
multiplying the number of shares of Common Stock which would otherwise (but for
the provisions of this Section 3.1) be issuable upon such exercise, as
designated by the holder hereof pursuant to Section 2.1, by the fraction of
which (a) the numerator is the Initial Warrant Price and (b) the denominator is
the Warrant Price in effect on the date of such exercise. The "WARRANT PRICE"
shall initially be the Initial Warrant Price, but shall be adjusted and
readjusted from time to time as provided in this Section 3.1 and, as so adjusted
or readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by this Section 3.1.
3.1.1. NO ADJUSTMENT OF WARRANT PRICE. No adjustment in the
Warrant Price shall be made in respect of the issuance of Additional
Shares of Common Stock unless the consideration per share for an
Additional Share of Common Stock issued or deemed to be issued by the
Company is less than the applicable Warrant Price in
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effect on the date of, and immediately prior to, such issue.
3.1.2. ADJUSTMENT OF WARRANT PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In the event the Company shall issue
Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 3.1.4) for a
consideration per share less than the applicable Warrant Price in
effect on the date of and immediately prior to such issue, then the
applicable Warrant Price shall be recomputed, concurrently with such
issue (calculated to the nearest one hundredth of a cent) by dividing
(a) an amount equal to the sum of (i) the number of shares of Common
Stock outstanding immediately prior to such issue multiplied by the
then effective Warrant Price and (ii) the consideration, if any, deemed
received by the Company upon such issue by (b) the total number of
shares of Common Stock deemed to be outstanding immediately after such
issue; and provided that, for purposes of this Section 3.1.2, all
shares of Common Stock outstanding and issuable upon conversion of
outstanding Options, Convertible Securities and the Preferred Stock
shall be deemed to be outstanding. In no event will the Warrant Price
be adjusted as the result of any issuance of any Additional Shares of
Common Stock for any amount higher than the Warrant Price in effect
immediately prior to such issuance.
3.1.3. ADJUSTMENTS FOR SUBDIVISIONS, STOCK DIVIDENDS,
COMBINATIONS OR CONSOLIDATION OF COMMON STOCK. In the event the
outstanding shares of Common Stock shall be increased by way of stock
issued as a dividend for no consideration or subdivided (by stock split
or otherwise) into a greater number of shares of Common Stock, the
Warrant Price then in effect shall, concurrently with the effectiveness
of such increase or subdivision, be proportionately decreased. In the
event the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, the Warrant Price then in effect shall,
concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
3.1.4. DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK -
OPTIONS AND CONVERTIBLE SECURITIES. In the event the Company at any
time after the Original Issue Date shall issue any Options or
Convertible Securities other than such Options or Convertible
Securities which are exchangeable, issuable, exercisable or convertible
into Common Stock which is excluded from the definition of Additional
Common Stock, or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options
or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such
number) of Common Stock issuable upon the exercise of such Options or,
in the case of Convertible Securities and Options therefor, the
conversion or exchange of such Convertible Securities, shall be deemed
to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the
close of business on such record date, PROVIDED that Additional Shares
of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to Section 3.1.5) of such
Additional Shares of
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Common Stock would be less than the applicable Warrant Price in effect
on the date of, and immediately prior to, such issue, or such record
date, as the case may be, and PROVIDED FURTHER that in any such case in
which Additional Shares of Common Stock are deemed to be issued:
(a) no further adjustment in the applicable
Warrant Price shall be made upon the subsequent issue of
shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities or upon
the subsequent issue of such Convertible Securities or
Options;
(b) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise,
for any increase or decrease in the consideration payable to
the Company, or any increase or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion
or exchange thereof, the applicable Warrant Price computed
upon the original issue thereof (or upon the occurrence of a
record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options or the
rights of conversion or exchange under such Convertible
Securities; and
(c) upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the applicable
Warrant Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon shall, upon such
expiration, be recomputed as if such unexercised portion of
such Options or rights of conversion or exchange under such
Convertible Securities had not been issued.
3.1.5. DETERMINATION OF CONSIDERATION. For purposes of this
Section 3.1, the consideration received by the Company for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(a) CASH AND PROPERTY: Such consideration shall:
(i) insofar as it consists of cash, be
computed at the aggregate amount of net cash proceeds
received by the Company excluding unpaid amounts
payable for accrued interest or accrued dividends;
(ii) insofar as it consists of property
other than cash, be computed at the fair value
thereof at the time of such issue, as determined in
good faith by the Board of Directors of the Company;
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and
(iii) in the event Additional Shares of
Common Stock are issued together with other shares or
securities or other assets of the Company for
consideration which covers both, be the proportion of
such consideration so received, computed as provided
in clauses (i) and (ii) above, which is allocated to
the Additional Shares of Common Stock as determined
in good faith by the Board of Directors.
(b) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Company for Additional
Shares of Common Stock deemed to have been issued pursuant to
Section 3.1.4, relating to Options and Convertible Securities,
shall be determined by dividing
(i) the total amount, if any, received
or receivable by the Company as consideration for the
issue of such Options or Convertible Securities, plus
the minimum aggregate amount of additional
consideration (as set forth in the instruments
relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such
consideration but subject to later readjustment
pursuant to Section 3.1.4) payable to the Company
upon the exercise of such Options or the conversion
or exchange of such Convertible Securities, or in the
case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities
and the conversion or exchange of such Convertible
Securities by
(ii) the maximum number of shares of
Common Stock (as set forth in the instruments
relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such
number but subject to later readjustment pursuant to
Section 3.1.4) issuable upon the exercise of such
Options or the conversion or exchange of such
Convertible Securities.
3.1.6. OTHER DILUTIVE EVENTS. In case any event shall occur
as to which the other provisions of this Section 3.1 are not strictly
applicable, but the failure to make any adjustment in the Warrant Price
would not fairly protect the rights represented by this Warrant in
accordance with the intention of this Section 3, then, upon request of
the holders of a majority of the Warrants, the Board of Directors of
the Company shall appoint a firm of independent public accountants of
recognized national standing (which may be the regular auditors of the
Company) to give their opinion as to the adjustment, if any, on a basis
consistent with the intention of this Section 3, necessary to preserve
without dilution the rights represented by the Warrants. Upon receipt
of such opinion, the Company will promptly furnish a copy thereof to
the holders of the Warrants and the Warrant Price shall be adjusted in
accordance therewith. The fees and expenses of such accountants shall
be paid by the Company;
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PROVIDED, HOWEVER, that if such accountants opine that no adjustment is
necessary, such fees and expenses will be paid by the holders of the
Warrants.
3.2. SUBSEQUENT EVENTS. In the event of any recapitalization,
consolidation or merger of the Company or its successor, the Warrants shall be
exercisable for such shares or other interests as the Warrants would have been
entitled if the Warrants had been exercised for Common Stock immediately prior
to such event.
4. COVENANTS.
4.1. NO IMPAIRMENT. The Company will not seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but will at all times in good faith assist in
carrying out all the provisions of this Warrant.
4.2. RESERVATION OF SHARES. So long as any Warrants shall remain
outstanding, the Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized capital stock, for the purpose of
issuance upon exercise of the Warrants, the full number of shares of Common
Stock then issuable upon exercise of all outstanding Warrants. If the Company's
Common Stock shall be listed on any national stock exchange, the Company at its
expense shall include in its listing application all of the shares of Common
Stock reserved for issuance upon exercise of the Warrants (subject to issuance
or notice of issuance to the exchange) and will similarly procure the listing of
any further Common Stock reserved for issuance upon exercise of the Warrants at
any subsequent time as a result of adjustments in the outstanding Common Stock
or otherwise.
4.3. VALIDITY OF SHARES. The Company will from time to time take
all such action as may be required to assure that all shares of Common Stock
which may be issued upon exercise of this Warrant will, upon issuance, be
legally and validly issued, fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issuance thereof. Without limiting
the generality of the foregoing, the Company will from time to time take all
such action as may be required to assure that the par value per share, if any,
of the Common Stock is at all times equal to or less than the lowest quotient
obtained by dividing the then current exercise price of this Warrant by the
number of shares of Common Stock into which this Warrant can, from time to time,
be exercised.
4.4. NOTICE OF CERTAIN EVENTS. If at any time:
(a) the Company shall declare any dividend or
distribution payable to the holders of its Common Stock;
(b) the Company shall offer for subscription pro rata to
the holders of Common Stock any additional shares of stock of any class
or any other rights;
(c) there shall be any recapitalization of the Company,
or consolidation or
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merger of the Company with, or sale of all or substantially all of its
assets to, another corporation or business organization; or
(d) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company as a whole or
substantially as a whole in a single transaction or a series of related
transactions;
then, in any one or more of such cases, the Company shall give the registered
holder of this Warrant written notice, by registered mail, of the date on which
a record shall be taken for such dividend, distribution or subscription rights
or for determining stockholders entitled to vote upon such recapitalization,
consolidation, merger, sale, dissolution, liquidation or winding up and of the
date when any such transaction shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such recapitalization, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Such written notice
shall be given 20 days prior to the record date with respect thereto.
5. RESTRICTIONS ON TRANSFER.
Each certificate for Warrant Shares issued upon the exercise of any
Warrant, each certificate issued upon the direct or indirect transfer of any
Warrant Shares and each Warrant issued upon direct or indirect transfer or in
substitution for any Warrant pursuant to Section 6 shall be transferable only
upon satisfaction of the conditions specified in Section 6.5 of the Warrant and
Debenture Commitment (as in effect on March 7, 1997) and shall be stamped or
otherwise imprinted with legends in substantially the form set forth on the face
of this Warrant or otherwise required by Section 6.5 of the Warrant and
Debenture Commitment (as in effect on March 7, 1997).
The holder understands and agrees that: (1) there are substantial
restrictions on the transferability of this Warrant; (2) this Warrant has not
been registered under the Securities Act and it may not be sold, pledged,
transferred or otherwise disposed of unless it is so registered or an exemption
from such registration is available and unless any such proposed sale, pledge,
transfer or disposition is effected in compliance with state securities laws;
(3) this Warrant may only be registered under the Securities Act by the Company;
(4) there is no trading market for this Warrant; (5) the Warrant has been issued
to the holder in reliance upon an exemption from the registration requirements
of the Securities Act afforded to private offerings; and (6) in light of the
foregoing, the holder may not be able to liquidate its investment in this
Warrant at any given time, and the holder must be prepared to bear that economic
risk.
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6. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
6.1. OWNERSHIP OF WARRANTS. The Company may treat the person in
whose name any Warrant is registered on the register kept at the office of the
Company maintained pursuant to Section 6.2(a) as the owner and holder thereof
for all purposes, notwithstanding any notice to the contrary, except that, if
and when any Warrant is properly assigned in blank, the Company may (but shall
not be obligated to) treat the bearer thereof as the owner of such Warrant for
all purposes, notwithstanding any notice to the contrary. Subject to Section 5,
a Warrant, if properly assigned, may be exercised by a new holder without a new
Warrant first having been issued.
6.2. OFFICE; TRANSFER AND EXCHANGE OF WARRANTS.
(a) The Company will maintain an office (which may be an
agency maintained at a bank) in the United States of America where
notices, presentations and demands in respect of this Warrant may be
made upon it. Such office shall be maintained at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such location as the Company shall
otherwise notify the holders of the Warrants.
(b) The Company shall cause to be kept at its office
maintained pursuant to Section 6.2(a) a register for the registration
and transfer of the Warrants. The names and addresses of holders of
Warrants, the transfers thereof and the names and addresses of
transferees of Warrants shall be registered in such register. Subject
to Section 6.2(a), the Person in whose name any Warrant shall be so
registered shall be deemed and treated as the owner and holder thereof
for all purposes of this Warrant, and the Company shall not be affected
by any notice or knowledge to the contrary.
(c) Upon the surrender of any Warrant, properly endorsed,
for registration of transfer or for exchange at the office of the
Company maintained pursuant to Section 6.2(a), the Company at its
expense will (subject to compliance with Section 5, if applicable)
execute and deliver to or upon the order of the holder thereof a new
Warrant of like tenor, in the name of such holder or as such holder
(upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face thereof for the number of
shares of Common Stock called for on the face of the Warrant so
surrendered.
6.3. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant
held by a Person other than a Purchaser or any institutional investor, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of a security held by the Investors or any
institutional holder or by the Investors or such institutional holder's nominee,
of an unsecured indemnity agreement from the Investors or such other holder
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon surrender of such Warrant for
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cancellation at the office of the Company maintained pursuant to Section 6.2(a),
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated the date hereof.
7. REMEDIES. The Company stipulates that the remedies at law of the holder
of this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
8. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this
Warrant shall be construed as conferring upon the holder hereof any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
9. NOTICES. Any notice or other communication in connection with this
Warrant shall be deemed to be delivered if in writing addressed as provided
below and if either (a) actually delivered at said address, (b) in the case of a
letter, seven business days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified, return receipt requested, or two business days shall have elapsed
after the same shall have been deposited with an overnight courier (for
overnight delivery) of national recognition, (c) in the case of a telecopy
within the United States, upon confirmation of receipt of such telecopy (which
confirmation may consist of a telecopy machine printout showing successful
transmission), if such telecopy is followed by a copy of the same being
deposited within one business day of such telecopy with an overnight courier
(for overnight delivery) or (d) transmitted to any address outside of the United
States, by telecopy and confirmed by overnight or two-day courier:
If to the Company, to it at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇, telephone: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to Goulston & Storrs, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ or at such other
address as the Company shall have specified by notice delivered to the holder
hereof.
If to the holder thereof, to the holders' addresses set forth on
Exhibit 1 to the Purchase Agreement, or at such other address as the Investors
shall have specified by notice delivered to the Company, in each case with a
copy to WPC.
If to any other holder of record of this Warrant, to it at its address
set forth in the registers of the Company.
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14
10. MISCELLANEOUS. The section headings in this Warrant are for convenience
of reference only and shall not constitute a part hereof. This Warrant and any
term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the laws (other than
the conflict of laws rules) of the State of Delaware.
This Warrant is hereby executed on behalf of the Company by its duly
authorized officer under its corporate seal as of the date first written above.
TWEETER HOME ENTERTAINMENT GROUP, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: President
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15
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To TWEETER HOME ENTERTAINMENT GROUP, INC.
The undersigned registered holder of the enclosed Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, __________(1)
shares of the Common Stock and herewith makes payment of $___________________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to ____________________, whose address is _____________
___________________________________________________.
Dated: ____________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
----------
(1) Insert here the number of shares called for on the face of this Warrant
(or, in the case of a partial exercise, the portion thereof as to which this
Warrant is being exercised), in either case without making any adjustment for
Additional Shares of Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of this Warrant,
may be delivered upon exercise. In the case of a partial exercise, a new Warrant
will be issued and delivered, representing the unexercised portion of the
Warrant, to the holder surrendering the Warrant.
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16
FORM OF CONVERSION NOTICE
[To be executed only upon conversion of Warrant]
To TWEETER HOME ENTERTAINMENT GROUP, INC.
The undersigned registered holder of the enclosed Warrant hereby
irrevocably converts such Warrant with respect to ____________(1) shares of the
Common Stock which such holder would be entitled to receive upon the exercise
hereof, and requests that the certificates for such shares be issued in the name
of, and delivered to ____________, whose address is ______________________.
Dated: _________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
_________________________________
(Street Address)
_________________________________
(City) (State) (Zip Code)
__________
(1) Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial conversion, the portion thereof as to
which this Warrant is being converted), in either case without making any
adjustment for Additional Shares of Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment provisions of
this Warrant, may be delivered upon exercise. In the case of a partial
conversion, a new Warrant will be issued and delivered, representing the
unconverted portion of the Warrant, to the holder surrendering the Warrant.
17
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant that
complies with Section 5 of the Warrant]
For value received, the undersigned registered holder of the attached
Warrant hereby sells, assigns and transfers unto the right
represented by such Warrant to purchase ______________ (1) shares of Common
Stock of TWEETER HOME ENTERTAINMENT GROUP, INC. to which such Warrant relates,
and appoints _______________ Attorney to make such transfer on the books of
TWEETER HOME ENTERTAINMENT GROUP, INC. maintained for such purpose, with full
power of substitution in the premises.
Dated: _________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
_________________________________
(Street Address)
_________________________________
(City) (State) (Zip Code)
Signed in the presence of:
_________________________________
__________
(1) Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial transfer, the portion thereof being
transferred), in either case without making any adjustment for Additional Shares
of Common Stock or any other stock or other securities or property or cash
which, pursuant to the adjustment provisions of this Warrant, may be delivered
upon exercise. In the case of a partial transfer, a new Warrant will be issued
and delivered, representing the untransferred portion of the Warrant, to the
holder surrendering the Warrant.
18
FORM OF CONVERSION NOTICE
[To be executed only upon conversion of Warrant]
To TWEETER HOME ENTERTAINMENT GROUP, INC.
The undersigned registered holder of the enclosed Warrant hereby
irrevocably converts such Warrant with respect to __________(1) shares of the
Common Stock which such holder would be entitled to receive upon the exercise
hereof, and requests that the certificates for such shares be issued in the name
of, and delivered to _____________________________, whose address is __________
______________________________________________.
Dated: ____________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
----------
(1) Insert here the number of shares called for on the face of this Warrant
(or, in the case of a partial conversion, the portion thereof as to which this
Warrant is being converted), in either case without making any adjustment for
Additional Shares of Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of this Warrant,
may be delivered upon exercise. In the case of a partial conversion, a new
Warrant will be issued and delivered, representing the unconverted portion of
the Warrant, to the holder surrendering the Warrant.
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19
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant that
complies with Section 5 of the Warrant]
For value received, the undersigned registered holder of the attached
Warrant hereby sells, assigns and transfers unto the right represented
by such Warrant to purchase __________(1) shares of Common Stock of TWEETER
HOME ENTERTAINMENT GROUP, INC. to which such Warrant relates, and appoints
_________ ________________________ Attorney to make such transfer on the books
of TWEETER HOME ENTERTAINMENT GROUP, INC. maintained for such purpose, with
full power of substitution in the premises.
Dated: ____________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the presence of:
______________________________
----------
(1) Insert here the number of shares called for on the face of this Warrant
(or, in the case of a partial transfer, the portion thereof being transferred),
in either case without making any adjustment for Additional Shares of Common
Stock or any other stock or other securities or property or cash which, pursuant
to the adjustment provisions of this Warrant, may be delivered upon exercise. In
the case of a partial transfer, a new Warrant will be issued and delivered,
representing the untransferred portion of the Warrant, to the holder
surrendering the Warrant.
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20
SCHEDULE TO EXHIBIT 10.8
FORM OF COMMON STOCK PURCHASE WARRANTS DATED JUNE 5, 1998
All Common Stock Purchase Warrants issued by the Company on June 5,
1998 are substantially identical in all material respects except as to the
Warrant Holder thereunder and the number of Common Stock shares of the Company
for which each individual Common Stock Purchase Warrant is exercisable. Such
information is set forth below:
NUMBER OF
WARRANT HOLDER WARRANT SHARES
1. Weston Presidio Offshore Capital C.V. 18,036
2. Advent Direct Investment Program Limited Partnership 7,052
3. Global Private Equity II Limited Partnership 18,720
4. Natio Vie Developpement II, FCPR 5,156
5. BNP Venture Holding Corp. 5,156
6. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 128
7. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 928
8. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 476
9. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 476
10. ▇▇▇▇▇ ▇▇▇▇▇▇ 476
======
TOTAL SHARES SUBJECT TO WARRANTS: 56,604
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