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EXHIBIT 10.25
THE HAWK GROUP OF COMPANIES, INC.
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WARRANT AGREEMENT
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DATED AS OF JUNE 30, 1995
316,970 WARRANTS TO PURCHASE CLASS B COMMON STOCK,
$.01 PAR VALUE
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TABLE OF CONTENTS
(NOT PART OF AGREEMENT)
PAGE
1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES................................................... 1
1.1 Form of Warrant Certificates.................................................................. 1
1.2 Execution of Warrant Certificates; Registration Books......................................... 2
1.3 Transfer, Split Up, Combination and Exchange of Warrant Certificates; Lost
or Stolen Warrant Certificates................................................................ 2
1.4 Subsequent Issuance of Warrant Certificates................................................... 3
1.5 Special Agreements of Warrant Certificate Holders............................................. 3
2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE........................................................ 4
2.1 Exercise of Warrants.......................................................................... 4
2.2 Issuance of Class B Common Stock.............................................................. 4
2.3 Unexercised Warrants.......................................................................... 4
2.4 Cancellation and Destruction of Warrant Certificates.......................................... 4
3. SPECIAL AGREEMENTS OF THE COMPANY...................................................................... 5
3.1 Reservation of Common Stock................................................................... 5
3.2 Common Stock To Be Duly Authorized and Issued, Fully Paid and
Nonassessable................................................................................. 5
3.3 Transfer Taxes................................................................................ 5
3.4 Class B Common Stock Record Date.............................................................. 6
3.5 Rights in Respect of Class B Common Stock..................................................... 6
3.6 Private Placement Number; CUSIP Number........................................................ 6
3.7 Right of Action............................................................................... 6
3.8 Survival...................................................................................... 7
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES;
FRACTIONAL SHARES...................................................................................... 7
4.1 Mechanical Adjustments........................................................................ 7
4.2 Fractional Shares............................................................................. 12
4.3 Additional Agreements of the Company.......................................................... 12
5. INTERPRETATION OF THIS AGREEMENT....................................................................... 13
5.1 Certain Defined Terms......................................................................... 13
5.2 Descriptive Headings.......................................................................... 18
5.3 Governing Law................................................................................. 19
6. MISCELLANEOUS.......................................................................................... 19
6.1 Expenses...................................................................................... 19
6.2 Amendment and Waiver.......................................................................... 19
6.3 Warrants Subject to Shareholders' Agreement................................................... 20
6.4 No Rights or Liabilities as Stockholder....................................................... 20
6.5 Directly or Indirectly........................................................................ 20
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TABLE OF CONTENTS (CONTINUED)
(NOT PART OF AGREEMENT)
PAGE
6.6 Survival of Representations and Warranties; Entire Agreement.................................. 20
6.7 Successors and Assigns........................................................................ 20
6.8 Notices....................................................................................... 20
6.9 Satisfaction Requirement...................................................................... 22
6.10 Severability.................................................................................. 22
6.11 Counterparts.................................................................................. 22
6.12 Jurisdiction; Jury Trial...................................................................... 22
6.13 Expiration.................................................................................... 22
Attachment A -- Form of Warrant Certificate
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of June 30, 1995, among THE HAWK GROUP OF
COMPANIES, INC. (together with its successors and assigns, the "COMPANY"), a
Delaware corporation, and each of CONNECTICUT GENERAL LIFE INSURANCE COMPANY
("CONNECTICUT GENERAL") and CIGNA MEZZANINE PARTNERS III, L.P. ("CMP" and,
together with Connecticut General, collectively, the "PURCHASERS").
RECITALS:
A. Certain capitalized terms used in this Agreement shall have the
meanings ascribed to them in Section 5 hereof.
B. The Board of Directors has authorized the issuance of an aggregate
of Three Hundred Sixteen Thousand Nine Hundred Seventy (316,970) warrants (the
"WARRANTS") of the Company, each Warrant representing the right to purchase,
upon the terms and subject to the conditions hereinafter set forth, and subject
to adjustment as set forth herein, one (1) share of Class B Common Stock on the
terms and subject to the conditions hereinafter set forth.
C. The Company and the Purchasers have entered into the separate Senior
Subordinated Note and Warrant Purchase Agreements (collectively, as may
thereafter be amended from time to time, the "NOTE PURCHASE AGREEMENT"), each
dated as of even date herewith, pursuant to which the Company agreed to sell,
and the Purchasers have agreed to purchase, Thirty Million Dollars ($30,000,000)
in aggregate principal amount of the Company's 12% Senior Subordinated Notes due
2005 (the "SUBORDINATED NOTES"), and the Warrants, for an aggregate
consideration of Thirty Million Dollars ($30,000,000) in cash.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties to this Agreement hereby agree as
follows:
1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.
1.1 FORM OF WARRANT CERTIFICATES. The warrant certificates
(individually, a "WARRANT CERTIFICATE" and, collectively, the "WARRANT
CERTIFICATES") evidencing the Warrants, and the forms of assignment and of
election to purchase shares to be attached to such certificates, shall be
substantially in the form set forth in Attachment A hereto and may have such
letters, numbers or other marks of identification or designation as may be
required to comply with any law or with any rule or regulation of any
governmental authority, stock exchange or self-regulatory organization made
pursuant thereto. Each Warrant Certificate shall be dated the date of issuance
thereof by the Company, either upon initial issuance or upon transfer or
exchange, and on its face shall initially entitle the holder thereof to purchase
a number of shares of Class B Common Stock equal to the number of Warrants
represented by such Warrant Certificate at a price per share equal to the
Purchase Price, but the number of such shares and the Purchase Price shall be
subject to adjustment as provided herein.
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1.2 EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS.
(A) EXECUTION OF WARRANT CERTIFICATES. The Warrant
Certificates shall be executed on behalf of the Company by an officer
of the Company authorized by the Board of Directors. In case the
officer of the Company who shall have signed any Warrant Certificate
shall cease to be such an officer of the Company before issuance and
delivery by the Company of such Warrant Certificate, such Warrant
Certificate nevertheless may be issued and delivered with the same
force and effect as though the individual who signed such Warrant
Certificate had not ceased to be such an officer of the Company, and
any Warrant Certificate may be signed on behalf of the Company by any
individual who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, notwithstanding the fact that at the date of the
execution of this Agreement any such individual was not such an
officer.
(B) REGISTRATION BOOKS. The Company will keep or cause to be
kept at the office of its counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, One
Cleveland Center, 20th Floor, ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, or at its office maintained at the address of the Company set
forth in Section 6.8 hereof, or at such other office of such counsel or
the Company in the United States of America of which the Company shall
have given notice to each holder of Warrant Certificates, books for
registration and transfer of the Warrant Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders
of the Warrant Certificates, the registration number and the number of
Warrants evidenced on its face by each of the Warrant Certificates and
the date of each of the Warrant Certificates.
1.3 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; LOST OR STOLEN WARRANT CERTIFICATES.
(A) TRANSFER, SPLIT UP, ETC. Any Warrant Certificate, with or
without other Warrant Certificates, may be transferred, split up,
combined or exchanged for another Warrant Certificate or Warrant
Certificates, entitling the registered holder or Transferee thereof to
purchase a like number of shares of Class B Common Stock as the Warrant
Certificate or Warrant Certificates surrendered then entitled such
registered holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Warrant Certificate shall
make such request in writing delivered to the Company, and shall
surrender the Warrant Certificate or Warrant Certificates to be
transferred, split up, combined or exchanged at the office of the
Company referred to in Section 1.2(b) hereof, whereupon the Company
shall deliver promptly to the Person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so
requested.
(B) LOSS, THEFT, ETC. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate (which evidence
shall be, in the case of an Institutional Investor, notice from such
Institutional Investor of such ownership (or of ownership by such
Institutional Investor's nominee) and such loss, theft, destruction or
mutilation), and:
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(i) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to the Company; provided,
however, that if the holder of such Warrant Certificate is an
Institutional Investor or a nominee of an Institutional
Investor, such holder's own unsecured agreement of indemnity
shall be deemed to be satisfactory; or
(ii) in the case of mutilation, upon surrender and
cancellation thereof;
the Company at its own expense will execute and deliver, in lieu
thereof, a new Warrant Certificate, dated the date of such lost,
stolen, destroyed or mutilated Warrant Certificate and of like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant
Certificate.
(C) LIMITATION ON TRANSFERS. Notwithstanding the foregoing
provisions of this Section 1.3 or any other provision contained in this
Agreement, each holder of Warrant Certificates agrees that it will not
at any time sell, transfer or otherwise convey any of the Warrants to
any Person which is a Competitor without the prior written consent of
the Company.
1.4 SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES. Subsequent to
the original issuance, no Warrant Certificates shall be issued except:
(a) Warrant Certificates issued upon any transfer, split up,
combination or exchange of Warrants pursuant to Section 1.3(a) hereof;
(b) Warrant Certificates issued in replacement of lost,
stolen, destroyed or mutilated Warrant Certificates pursuant to Section
1.3(b) hereof; and
(c) Warrant Certificates issued pursuant to Section 2.3 hereof
upon the partial exercise of any Warrant Certificate to evidence the
unexercised portion of such Warrant Certificate.
1.5 SPECIAL AGREEMENTS OF WARRANT CERTIFICATE HOLDERS. Every
holder of a Warrant Certificate by accepting the same consents and agrees with
the Company and with every other holder of a Warrant Certificate that:
(a) the Warrant Certificates are transferable only on the
registry books of the Company if surrendered at the office of the
Company referred to in Section 1.2(b) hereof, duly endorsed or
accompanied by an instrument of transfer (in the form attached hereto);
and
(b) the Company may deem and treat the Person in whose name
each Warrant Certificate is registered as the absolute owner thereof
and of the Warrants evidenced thereby (notwithstanding any notations of
ownership or writing on the Warrant Certificates made by anyone other
than the Company) for all purposes whatsoever, and the Company shall
not be affected by any notice to the contrary.
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2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.
2.1 EXERCISE OF WARRANTS. At any time and from time to time on
or prior to the Expiration Date, the holder of any Warrant Certificate may
exercise the Warrants evidenced thereby, in whole or in part, by surrender of
such Warrant Certificate, with an election to purchase (a form of which is
attached to each Warrant Certificate) attached thereto duly executed, to the
Company at its office referred to in Section 1.2(b) hereof, together with
payment of the Purchase Price for each share of Class B Common Stock with
respect to which the Warrants are then being exercised. Such Purchase Price
shall be payable:
(a) in cash or by certified or official bank check payable to
the order of the Company or by wire transfer of immediately available
funds to the account of the Company; or
(b) by surrender of one or more Subordinated Notes to the
Company, in accordance with Section 5.9 of the Note Purchase Agreement,
in an aggregate principal amount which, together with any consideration
simultaneously delivered pursuant to Section 2.1(a) hereof, shall equal
such Purchase Price. Upon any such delivery of Subordinated Notes to
the Company, the Company shall pay to the tendering holder all accrued
and unpaid interest in respect of the Subordinated Notes so delivered
to and including the date of exercise, and shall cancel and retire such
Subordinated Note. The Company and the Purchasers agree that a tender
of Subordinated Notes in payment of the Purchase Price in respect of
the Warrants shall not be deemed a prepayment of the Subordinated
Notes, but rather a conversion of such Subordinated Notes, pursuant to
the terms of this Agreement and the Warrants, into Class B Common
Stock.
2.2 ISSUANCE OF CLASS B COMMON STOCK. Upon timely receipt of a
Warrant Certificate, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for each of the shares to be
purchased in the manner provided in Section 2.1 hereof and an amount equal to
any applicable transfer tax (if not payable by the Company as provided in
Section 3.3 hereof), the Company shall thereupon promptly cause certificates
representing the number of whole shares of Class B Common Stock then being
purchased to be delivered to or upon the order of the registered holder of such
Warrant Certificate, registered in such name or names as may be designated by
such holder, and, promptly after such receipt deliver the cash, if any, to be
paid in lieu of fractional shares pursuant to Section 4.2 hereof to or upon the
order of the registered holder of such Warrant Certificate.
2.3 UNEXERCISED WARRANTS. In case the registered holder of any
Warrant Certificate shall exercise less than all the Warrants evidenced
thereby, a new Warrant Certificate evidencing Warrants equal in number to the
number of Warrants remaining unexercised shall be issued by the Company to the
registered holder of such Warrant Certificate or to its duly authorized
assigns.
2.4 CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES. All
Warrant Certificates surrendered to the Company for the purpose of exercise,
exchange, substitution or transfer shall be cancelled by it, and no Warrant
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall cancel and retire
any
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other Warrant Certificates purchased or acquired by the Company otherwise than
upon the exercise thereof.
3. SPECIAL AGREEMENTS OF THE COMPANY.
3.1 RESERVATION OF COMMON STOCK. The Company covenants and agrees
that it will at all times cause to be reserved and kept available:
(a) out of its authorized and unissued shares of Class B
Common Stock such number of shares of Class B Common Stock as will be
sufficient to permit the exercise in full of all Warrants issued
hereunder and all other rights, warrants or options exercisable into,
and the conversion of all Securities convertible into, Class B Common
Stock; and
(b) out of its authorized and unissued shares of Class A
Common Stock such number of shares of Class A Common Stock as will be
sufficient to permit the conversion in full of all Class B Common Stock
issued or issuable hereunder and all other rights, warrants or options
exercisable into, and the conversion of all Securities convertible
into, Class A Common Stock.
3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID AND
NONASSESSABLE. Upon payment of the aggregate Purchase Price, the Company
covenants and agrees that it will take all such action as may be necessary to
ensure that
(a) all shares of Class B Common Stock delivered upon the
exercise of any Warrants at the time of delivery of the certificates
representing such shares, and
(b) all shares of Class A Common Stock delivered upon the
conversion of any Class B Common Stock at the time of delivery of the
certificates representing such shares,
shall be duly and validly authorized and issued and fully paid and
nonassessable, free of any preemptive rights and free of any Lien created by, or
arising out of actions of, the Company or any Subsidiary.
3.3 TRANSFER TAXES. The Company covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the initial issuance or delivery of:
(a) each Warrant Certificate;
(b) each Warrant Certificate issued in exchange for any other
Warrant Certificate pursuant to Section 1.3(a) or Section 2.3 hereof;
(c) each share of Class B Common Stock issued upon the
exercise of any Warrant; and
(d) each share of Class A Common Stock issued upon conversion
of any share of Class B Common Stock issued upon the exercise of any
Warrant.
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The Company shall not, however, be required to:
(i) pay any transfer tax that may be payable in respect of the
transfer or delivery of Warrant Certificates or the issuance or
delivery of certificates for shares of Common Stock in a name other
than that of the registered holder of the Warrant Certificate
evidencing any Warrant surrendered for exercise or the certificate
representing the shares of Class B Common Stock presented for
conversion, as the case may be (any such tax being payable by the
holder of such Warrant Certificate or Class B Common Stock at the time
of surrender); or
(ii) issue or deliver any such certificates referred to in the
foregoing clause (i) for shares of Class B Common Stock upon the
exercise of any Warrant until any such tax referred to in the foregoing
clause (i) shall have been paid.
3.4 CLASS B COMMON STOCK RECORD DATE. Each Person in whose name
any certificate for shares of Class B Common Stock is issued upon the exercise
of Warrants shall for all purposes be deemed to have become the holder of
record of the Class B Common Stock represented thereby on, and such certificate
shall be dated, the date upon which the Warrant Certificate evidencing such
Warrants was duly surrendered with an election to purchase attached thereto
duly executed and payment of the aggregate Purchase Price (and any applicable
transfer taxes, if payable by such Person) was made.
3.5 RIGHTS IN RESPECT OF CLASS B COMMON STOCK. Except as
otherwise set forth herein or in the Shareholders' Agreement, prior to the
exercise of the Warrants evidenced thereby, the holder of a Warrant Certificate
shall not be entitled to any rights of a stockholder in the Company with
respect to shares for which the Warrants shall be exercisable, including,
without limitation, the right to vote in respect of any matter upon which the
holders of Class B Common Stock may vote or the right to receive dividends or
other distributions and shall not be entitled to receive any notice of any
proceedings of the Company.
3.6 PRIVATE PLACEMENT NUMBER; CUSIP NUMBER. The Company covenants
and agrees to maintain a private placement number in respect of the Warrants
and on or before the earlier of (i) the date of the first offer for sale of
Class A Common Stock pursuant to an effective registration statement filed by
the Company under the Securities Act or (ii) thirty (30) days after the first
exercise of a Warrant (or as soon thereafter as practicable), CUSIP numbers in
respect of each of the Class A Common Stock and the Class B Common Stock, in
each case, from the CUSIP Service Bureau of Standard & Poor's, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
3.7 RIGHT OF ACTION. All rights of action in respect of the
Warrants are vested in the respective registered holders of the Warrant
Certificates, and any registered holder of any Warrant Certificate, without the
consent of the holder of any other Warrant Certificate, may, in its own behalf
and for its own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, its right to exercise the Warrants evidenced by such Warrant
Certificate in the manner provided in such Warrant Certificate and in this
Agreement.
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3.8 SURVIVAL. The agreements of the Company contained in this
Section 3 shall survive the exercise of and the expiration of the Warrants.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES; FRACTIONAL
SHARES.
4.1 MECHANICAL ADJUSTMENTS. The number of shares of Class B
Common Stock purchasable upon the exercise of each Warrant, and the Purchase
Price, shall be subject to adjustment as follows:
(A) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In the
event that the Company shall:
(i) pay a dividend in shares of Additional
Common Stock or make a distribution in shares of Additional
Common Stock;
(ii) reclassify by subdivision its outstanding
shares of Common Stock into a greater number of shares; or
(iii) reclassify by combination its outstanding
shares of Common Stock into a smaller number of shares;
then, and in each such case, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision or combination shall be adjusted to that price determined
by multiplying the Purchase Price in effect immediately prior to such
event by the quotient of:
(A) the total number of outstanding shares of Common
Stock immediately prior to such event; divided by
(B) the total number of outstanding shares of Common
Stock immediately after such event.
An adjustment made pursuant to this Section 4.1(a) shall become
effective on the effective date of such event.
(B) DISTRIBUTIONS OF PROPERTY. In the event that the Company
shall distribute to holders of shares of Common Stock (including,
without limitation, any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) shares of stock other than Common Stock or evidences of
its indebtedness or assets, or Rights (excluding those referred to in
Section 4.1(c) hereof), then in each case the Purchase Price in effect
after the record date in respect of which such stock, indebtedness,
assets or Rights were issued shall be adjusted by multiplying the
Purchase Price in effect immediately prior to such record date by the
quotient of:
(i) the difference of:
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(A) the Reference Price on such record date;
minus
(B) the quotient of (I) the then fair value
(as determined in good faith and on a reasonable
basis by the Board of Directors, whose determination,
if so made, shall be conclusive) of the shares of
stock or assets or evidences of indebtedness so
distributed or of such Rights, divided by (II) the
number of shares of Common Stock outstanding on the
record date;
divided by
(ii) the Reference Price on such record date.
Such adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of such distribution.
(C) ISSUANCES OF ADDITIONAL COMMON STOCK AND OTHER SECURITIES.
In the event that the Company shall issue or sell shares of Additional
Common Stock or Rights (excluding Excluded Securities) at a
Consideration Per Share lower than the Reference Price in effect on the
date of such issuance or sale, or if the Company shall amend the
provisions of any Rights such as to reduce the Consideration Per Share
applicable thereto, then the Purchase Price in effect immediately after
such event shall be adjusted by multiplying the Purchase Price in
effect immediately prior to such event by the quotient of:
(i) the sum of:
(A) the number of shares of Common Stock
outstanding immediately prior to such event; plus
(B) the quotient of (I) the Aggregate
Consideration Receivable, divided by (II) the
Reference Price, in each case immediately prior to
such event;
divided by
(ii) the sum of:
(A) the number of shares of Common Stock
outstanding immediately prior to such event; plus
(B) the number of shares of Additional
Common Stock so issued or sold (or then issuable
pursuant to such Rights).
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In the event that the Company shall issue and sell shares of Common
Stock or Rights for a consideration consisting, in whole or in part, of
Property (including, without limitation, a Security) other than cash or
its equivalent, then in determining the "Aggregate Consideration
Receivable," the Board of Directors shall determine, in good faith and
on a reasonable basis, the fair value of such Property, and such
determination, if so made, shall be binding upon all holders of
Warrants.
(D) CONSOLIDATION; MERGER; SALE; RECLASSIFICATION. In the
event that there shall be:
(i) any consolidation of the Company with, or merger
of the Company with or into, another corporation (other than a
merger in which the Company is the surviving corporation and
that does not result in any reclassification or change of
shares of Common Stock outstanding immediately prior to such
merger);
(ii) any sale or conveyance to another corporation of
the Property of the Company substantially as an entirety; or
(iii) any reclassification of the Common Stock that
results in the issuance of other Securities of the Company;
then, in each such case, lawful provision shall be made as a part of
the terms of such transaction so that the holders of Warrants shall
thereafter have the right to purchase the number and kind of shares of
stock, other Securities, cash, Property and rights receivable upon such
consolidation, merger, sale, conveyance or reclassification by a holder
of such number of shares of Common Stock as the holder of a Warrant
would have had the right to acquire upon the exercise of such Warrant
immediately prior to such consolidation, merger, sale or conveyance, at
the Purchase Price then in effect.
(E) DE MINIMIS CHANGES IN PURCHASE PRICE. No adjustment in the
Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the Purchase
Price; provided that any adjustments that, at the time of the
calculation thereof, are less than one percent (1%) of the Purchase
Price at such time and by reason of this Section 4.1(e) are not
required to be made at such time shall be carried forward and added to
any subsequent adjustment or adjustments for purposes of determining
whether such subsequent adjustment or adjustments, as so supplemented,
exceed the one percent (1%) amount set forth in this Section 4.1(e)
and, if any such subsequent adjustment, as so supplemented or
otherwise, should exceed such one percent (1%) amount, all adjustments
deferred prior thereto and not previously made shall then be made. In
any case, all such adjustments being carried forward pursuant to this
Section 4.1(e) shall be given effect upon the exercise of any Warrants
by any holder thereof for purposes of determining the Purchase Price
thereof. All calculations shall be made to the nearest ten-thousandth
of a dollar ($0.0001).
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(F) ADJUSTMENT OF NUMBER OF SHARES ISSUABLE PURSUANT TO
WARRANTS. Upon each adjustment of the Purchase Price as a result of the
calculations made in this Section 4.1, each Warrant outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of shares of Class B Common Stock (calculated to the nearest
one-hundredth (.01)) obtained by multiplying the number of shares of
Class B Common Stock covered by such Warrant immediately prior to such
adjustment by the quotient of:
(i) the Purchase Price in effect immediately prior to
such adjustment,
divided by
(ii) the Purchase Price in effect immediately after
such adjustment.
All Warrants originally issued by the Company hereunder shall,
subsequent to any adjustment made to the Purchase Price hereunder,
evidence the right to purchase, at the adjusted Purchase Price, the
number of shares of Class B Common Stock determined to be purchasable
from time to time hereunder upon exercise of such Warrants, all subject
to further adjustment as provided herein. Each such adjustment shall be
valid and binding upon the Company and the holders of Warrants
irrespective of whether the Warrant Certificates theretofore and
thereafter issued express the Purchase Price per share of Class B
Common Stock and the number of shares of Common Stock that were
expressed upon the initial Warrant Certificates issued hereunder.
(G) MISCELLANEOUS.
(i) Adjustments shall be made pursuant to this
Section 4.1 successively whenever any of the events referred
to in Section 4.1(a) through Section 4.1(d), inclusive, hereof
shall occur.
(ii) If any Warrant shall be exercised subsequent to
the record date for any of the events referred to in this
Section 4.1, but prior to the effective date thereof,
appropriate adjustments shall be made immediately after such
effective date so that the holder of such Warrant on such
record date shall have received, in the aggregate, the kind
and number of shares of Class B Common Stock or other
Securities or Property that it would have owned or been
entitled to receive on such effective date had such Warrant
been exercised prior to such record date.
(iii) Shares of Common Stock owned by or held for the
account of the Company or any Subsidiary shall not, for
purposes of the adjustments set forth in this Section 4.1, be
deemed outstanding.
(H) EXPIRATION OF RIGHTS. Upon the expiration of any Rights
with respect to which an adjustment was required to be made pursuant to
Section 4.1, without the full exercise thereof, the Purchase Price and
the number of shares of Class B Common Stock purchasable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be the Purchase Price and the number of shares of
Class B Common
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Stock as would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if:
(i) the only shares of Common Stock issuable under
such Rights were the shares of Common Stock, if any, actually
issued or sold upon the exercise of such Rights; and
(ii) such shares of Common Stock, if any, were issued
or sold for the consideration actually received by the Company
upon such exercise plus the aggregate consideration, if any,
actually received by the Company for the issuance, sale or
grant of all of such Rights, whether or not exercised;
provided that no such readjustment shall have the effect of
increasing the Purchase Price by an amount in excess of the
amount of the reduction initially made in respect of the
issuance, sale, or grant of such Rights.
(I) OTHER SECURITIES. In the event that at any time, as a
result of an adjustment made pursuant to this Section 4.1, each holder
of Warrants shall become entitled to purchase any Securities of the
Company other than shares of Class B Common Stock, the number or amount
of such other Securities so purchasable and the Purchase Price of such
Securities shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions
contained in Section 4.1(a) through Section 4.1(d), inclusive, hereof,
and all other relevant provisions of this Section 4.1 that are
applicable to shares of Class B Common Stock shall be applicable to
such other Securities.
(J) NOTICE OF ADJUSTMENT. Whenever the number of shares of
Class B Common Stock issuable upon the exercise of Warrants is adjusted
or the Purchase Price in respect thereof is adjusted, as herein
provided, the Company shall promptly give to each holder of Warrants
notice of such adjustment or adjustments and shall promptly deliver to
each holder of Warrants a certificate of the Company's chief financial
officer setting forth:
(i) the number of shares of Class B Common Stock
issuable upon the exercise of each Warrant and the Purchase
Price of such shares after such adjustment;
(ii) a brief statement of the facts requiring such
adjustment; and
(iii) the computation by which such adjustment was
made.
So long as any Warrant is outstanding, the Company shall, upon the
written request of the Required Holders, deliver to each holder of
Warrants a certificate of the independent certified public accountants
of the Company setting forth:
(A) the number of shares of Class B Common Stock
issuable upon the exercise of each Warrant and the Purchase
Price of such shares as of the end of such fiscal year;
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(B) a brief statement of the facts requiring each
adjustment required to be made in such fiscal year; and
(C) the computation by which each such adjustment was
made;
provided, that the required Holders may not make more than one (1) such
request in any twelve (12) month period.
(K) NOTICE OF CERTAIN EVENTS. Whenever the Company shall
publicly announce the authorization of any Notice Event, the Company
shall, not less than thirty (30) days prior to the record date with
respect to such event (or, if no record date for the same shall be
fixed, not less than thirty (30) days prior to the occurrence of such
Notice Event), give to each holder of Warrants, written notice of such
event setting forth any change in the number of shares of Class B
Common Stock the Company estimates will be issuable upon the exercise
of such holder's Warrants, the estimated Purchase Price of such shares
after any adjustment required to be made hereunder and a brief
statement of the facts requiring such adjustment and the computation by
which the Company expects such adjustment will be made. Notwithstanding
the foregoing, no failure of the Company to give any such notice shall
affect the validity of the action taken unless such failure was in bad
faith.
4.2 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares of Class B Common Stock upon the exercise of any Warrant. Upon
the exercise of any Warrant, there shall be paid to the holder thereof, in lieu
of any fractional share of Class B Common Stock resulting therefrom, an amount
of cash (computed to the nearest whole cent) equal to the product of:
(a) the fractional amount of such share; times
(b) the Market Price, as determined on the trading day
immediately prior to the date of exercise of such Warrant.
4.3 ADDITIONAL AGREEMENTS OF THE COMPANY. The Company covenants
and agrees that:
(a) The Company shall not, by amendment to its certificate of
incorporation, as in effect on the date hereof, or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
liquidation, issuance or sale of Securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but
shall at all times in good faith assist in the carrying out of all the
provisions of this Section 4 and in the taking of all such actions as
may be reasonably necessary or appropriate in order to protect the
rights of the holders of the Warrant Certificates against dilution or
other impairment.
(b) Before taking any action that would result in an
adjustment to the then current Purchase Price to a price that would be
below the then current par value of Class B Common Stock issuable upon
exercise of any Warrant, the Company will take or cause to be taken any
and all necessary corporate or other action that may be necessary in
order
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that the Company may validly and legally issue fully paid and
nonassessable shares of Class B Common Stock upon payment of such
Purchase Price as so adjusted.
5. INTERPRETATION OF THIS AGREEMENT.
5.1 CERTAIN DEFINED TERMS. For the purpose of this Agreement, the
following terms shall have the meanings specified with respect thereto below:
ADDITIONAL COMMON STOCK -- means Common Stock of the Company, including
treasury shares, issued after the Closing Date, except Class B Common Stock
issued upon the exercise of any one or more Warrants and Class A Common Stock
issued upon the conversion of any Class B Common Stock.
AFFILIATE -- means, at any time, a Person (other than a Subsidiary or a
Purchaser or an affiliate of a Purchaser):
(a) that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company;
(b) that beneficially owns or holds five percent (5%) or more
of any class of the Voting Stock; or
(c) five percent (5%) or more of the Voting Stock (or in the
case of a Person that is not a corporation, five percent (5%) or more
of the equity interest) of which is beneficially owned or held by the
Company or a Subsidiary;
at such time.
As used in this definition,
Control -- means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
AGGREGATE CONSIDERATION RECEIVABLE -- means, in the case of a sale of
shares of Additional Common Stock, the aggregate amount paid to the Company in
connection therewith and, in the case of an issuance or sale of Rights, or any
amendment thereto, the sum of:
(a) the aggregate amount paid to the Company for such Rights;
plus
(b) the aggregate consideration or premiums stated in such
Rights payable for the shares of Additional Common Stock covered
thereby;
in each case without deduction for any fees, expenses or underwriters'
discounts.
AGREEMENT, THIS -- and references thereto shall mean this Agreement as
it may from time to time be amended or supplemented.
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BOARD OF DIRECTORS -- means the board of directors of the Company or
any committee thereof that, in the instance, shall have the lawful power to
exercise the power and authority of such board of directors.
BUSINESS DAY -- means a day other than a Saturday, a Sunday or a day on
which banks in the State of Connecticut are required or permitted by law (other
than a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.
CMP -- shall have the meaning specified in the introductory paragraph
hereof.
CALCULATION AGENT -- means a firm of independent certified public
accountants of recognized national standing appointed by the Board of Directors
and reasonably acceptable to the Required Warrantholders.
CLASS A COMMON STOCK -- means the Class A Common Stock, par value $.01
per share, of the Company.
CLASS B COMMON STOCK -- means and includes:
(a) the Class B Common Stock, par value $.01 per share, of the Company;
and
(b) any other Securities of the Company or any other Person that the
holders of the Class B Common Stock at any time shall have received, in
lieu of or in addition to Class B Common Stock, or that at any time
shall have been issued in exchange for or in replacement of Class B
Common Stock or such additional Securities.
CLOSING DATE -- shall mean the "Closing Date" as defined in the Note
Purchase Agreement.
CLOSING PRICE -- means, per share of Common Stock, on any date
specified herein:
(i) the last sale price, regular way, on such date or, if no
such sale takes place on such date, the average of the closing bid and
asked prices on such date, in each case as officially reported on the
principal national securities exchange on which the Class A Common
Stock is then listed or admitted to trading; and
(ii) if the Class A 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 National
Association of Securities Dealers, Inc., the last trading price of the
Class A Common Stock on such date, or if there shall have been no
trading on such date or if the Class A Common Stock is not so
designated, the average of the reported closing bid and asked prices on
such date as shown by the NASDAQ.
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COMMON STOCK -- the common stock of the Company (including, without
limitation, the Class A Common Stock and the Class B Common Stock) and any other
equity securities of the Company which are not limited to a fixed sum or a fixed
percentage of par value in respect of participation in dividends and
distributions in liquidation.
COMPANY -- shall have the meaning specified in the introductory
paragraph hereof.
COMPETITOR -- means, at any time, any Person that is engaged at such
time in a principal line of business which is substantially the same as, or
substantially similar to, any of the businesses in which the Company and the
Subsidiaries were engaged in on the Closing Date. Notwithstanding the foregoing,
"Competitor" shall not include any of the Purchasers, or (A) any (1) subsidiary
or affiliate of any Purchaser, (2) insurance company, (3) bank or savings and
loan association, (4) investment company (collectively, the "Institutional
Investors"), the primary businesses of which are any one or more of insurance,
the investment of funds as principal or on behalf of third parties, or the
providing of other financial services and (B) any broker, dealer or similar
intermediary that has acquired the Warrants for resale to Institutional
Investors.
CONNECTICUT GENERAL -- shall have the meaning specified in the
introductory paragraph hereof.
CONSIDERATION PER SHARE -- means, with respect to shares of Common
Stock or Rights, the quotient of:
(a) the Aggregate Consideration Receivable in respect of such
shares of Common Stock or such Rights; divided by
(b) the total number of such shares of Common Stock or, in the
case of Rights, the total number of shares of Common Stock covered by
such Rights.
EXCLUDED SECURITIES -- means and includes:
(a) shares of Common Stock or Rights issued in any of the
transactions described in Section 4.1(a), Section 4.1(b), Section
4.1(c) or Section 4.1(d) hereof, and in respect of which an adjustment
has been made pursuant to such Section; and
(b) shares of Class B Common Stock issuable upon exercise of
the Warrants and shares of Class A Common Stock issued upon conversion
of the Class B Common Stock;
(c) shares of Common Stock or Rights issued pursuant to a
Permitted Management Issuance.
EXPIRATION DATE -- means, with respect to any Warrant, June 30, 2005.
FAIR VALUE -- means, with respect to any share of Common Stock, the
quotient of:
(a) the sum of
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(i) the fair salable value of the Company, as a going
concern, giving effect to all Property thereof and subject to
all liabilities thereof, that would be realized in an
arm's-length sale between an informed and willing buyer and an
informed and willing seller, under no compulsion to buy or
sell, respectively, as of a date that is within fifteen (15)
days of the date as of which the determination is to be made,
determined by the Valuation Agent, such determination to be
made without regard to any absence of a liquid or ready market
for such Common Stock; plus
(ii) the aggregate exercise or conversion price of
all Rights in existence and remaining unexercised on such
date;
divided by
(b) the total number of shares of Common Stock outstanding at
such time on a fully diluted basis.
INITIAL PURCHASE PRICE -- means $0.01 per share.
INSTITUTIONAL INVESTOR -- means the Purchasers, any affiliate of any of
the Purchasers, and any holder of a Warrant Certificate that is an "accredited
investor" as defined in section 2(15) of the Securities Act.
LIEN -- means any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the foregoing (but excluding negative pledge clauses in agreements
related to the borrowing of money), any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction (but excluding informational filings made in respect of
leases)) or any other type of preferential arrangement for the purpose, or
having the effect, of protecting a creditor against loss or securing the payment
or performance of an obligation. The term "Lien" includes encumbrances with
respect to stock, including, without limitation, stockholder agreements, voting
trust agreements, buy-back agreements and all similar arrangements.
MANAGEMENT EMPLOYEES - means the directors and senior management
employees of the Corporation or any Subsidiary.
MANAGEMENT STOCKHOLDER -- means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
MARKET PRICE -- means, per share of Common Stock, as of any date of
determination, the arithmetic mean of the daily Closing Prices for the twenty
(20) consecutive trading days before such date of determination of the Class A
Common Stock; provided that if the Common Stock is not then listed or admitted
to trading on any national securities exchange or quoted in the over-the-counter
market, then "Market Price" means the greater of:
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(a) the book value of one share of Common Stock, as determined
in accordance with generally accepted accounting principles by the
Calculation Agent, as of the date of determination; and
(b) the Fair Value of one share of Common Stock, as of the
date of determination.
NASDAQ -- means the National Association of Securities Dealers
Automated Quotation System.
NOTE PURCHASE AGREEMENT -- shall have the meaning specified in Recital
C of this Agreement.
NOTICE EVENT -- means any of the following:
(a) any event that would require an adjustment in the Purchase
Price pursuant to Section 4.1 hereof; or
(b) any distribution of Property in respect of Common Stock.
PERMITTED MANAGEMENT ISSUANCES - means the issuance by the Company
after the Closing Date of Common Stock or Rights to Management Employees
pursuant to, and in accordance with, the provisions of a stock option plan
approved by the Board of Directors and consented to by a majority of the holders
of Company Securities; however, that the aggregate number of shares of Issuable
Shares so issued or sold shall not exceed at any time Eighty-Eight Thousand
Forty-Seven (88,047) shares of Common Stock (as such number may be
proportionately adjusted to reflect any stock dividend or split or
reclassification, by subdivision, combination or otherwise, of the Common Stock.
PERSON -- means an individual, partnership, corporation, limited
liability company, joint venture, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
PURCHASE PRICE -- means, prior to any adjustment pursuant to Section
4.1 of this Agreement, the Initial Purchase Price and thereafter, the Initial
Purchase Price as adjusted and readjusted from time to time (in each case,
rounded to the nearest whole cent).
PURCHASERS -- shall have the meaning specified in the introductory
paragraph hereof.
REFERENCE PRICE -- means, per share of Common Stock, as of any date of
determination, the greater of the Market Price as of such date and the Purchase
Price on such date.
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REQUIRED WARRANTHOLDERS -- means, at any time, the holders of at least
fifty-one percent (51%) of all Warrants outstanding (excluding any Warrants
directly or indirectly held by the Company, any Subsidiary or any Affiliate) at
such time, and which must include the Purchasers if, at such time, they hold
their entire original investment in the Warrants on the books of the Company.
RIGHT -- means and includes:
(a) any warrant (including, without limitation, any Warrant)
or any option (including, without limitation, employee stock options)
to acquire Common Stock;
(b) any right issued to holders of the Common Stock, or any
class thereof, permitting the holders thereof to subscribe to shares of
Additional Common Stock (pursuant to a rights offering or otherwise);
(c) any right to acquire Common Stock pursuant to the
provisions of any Security convertible or exchangeable into Common
Stock; and
(d) any similar right permitting the holder thereof to
subscribe for or purchase shares of Common Stock.
SECURITIES ACT -- means the Securities Act of 1933, as amended.
SECURITY -- shall have the meaning specified in section 2(1) of the
Securities Act.
SHAREHOLDERS' AGREEMENT -- means the Shareholders' Agreement, dated as
of the date hereof, among the Company, the Purchasers and the Management
Stockholders.
SUBORDINATED NOTES -- shall have the meaning specified in Recital C of
this Agreement.
SUBSIDIARY -- means, as to any Person, any corporation in which such
Person or one or more Subsidiaries of such Person or such Person and one or more
Subsidiaries of such Person owns sufficient voting securities to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
corporation; the term "Subsidiary," as used herein without reference to any
Person, shall mean a Subsidiary of the Company.
TRANSFEREE -- means any transferee registered on the books of the
Company of all or any part of any Warrant Certificate issued to the Purchasers
under this Agreement.
VALUATION AGENT -- means a firm of independent certified public
accountants, an investment banking firm or appraisal firm (which firm shall own
no Securities of, and shall not be an Affiliate, Subsidiary or a related Person
of, the Company) of recognized national standing retained by the Company and
reasonably acceptable to the Required Warrantholders.
VOTING STOCK -- means, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of
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directors of such corporation (irrespective of whether at the time any stock of
any other class or classes shall have or might have voting power by reason of
the happening of any contingency).
WARRANT -- shall have the meaning specified in Recital B hereof.
WARRANT CERTIFICATE -- shall have the meaning specified in Section 1.1
hereof.
5.2 DESCRIPTIVE HEADINGS. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
5.3 GOVERNING LAW. THIS AGREEMENT AND THE WARRANT CERTIFICATES
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT.
6. MISCELLANEOUS.
6.1 EXPENSES. Except as provided in Section 3.3 hereof, the
Company agrees to pay, and save the Purchasers and any other holder of Warrant
Certificates harmless against liability for the payment of, all out-of-pocket
expenses (including, without limitation, attorney's fees and disbursements)
arising in connection with the transactions herein contemplated, including,
without limitation:
(a) the cost, if any, of complying with Section 3.6 hereof;
(b) any subsequent proposed modification of, or proposed
consent requested or initiated by or on behalf of the Company under,
this Agreement, the Warrant Certificates or the Warrants, whether or
not such proposed modification shall be effected or proposed consent
granted (including, without limitation, all document production and
duplication charges and the fees and expenses of one special counsel
engaged by the holders of Warrant Certificates in connection
therewith); and
(c) the enforcement of (or determination of whether or how to
enforce) any rights under this Agreement, the Warrant Certificates or
the Warrants or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement
or the transactions contemplated hereby or by reason of the Purchasers'
or any Transferee's having acquired any Warrant Certificate, including,
without limitation, the fees and disbursements of one special counsel
engaged by the Purchasers or any other holders of Warrant Certificates
and incurred by such holders and the costs and expenses incurred in any
bankruptcy case involving the Company or any Subsidiary.
The obligations of the Company under this Section 6.1 shall survive the transfer
of any Warrant Certificate or portion thereof or interest therein by the
Purchasers or any Transferee and the exercise or expiration of any Warrant.
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6.2 AMENDMENT AND WAIVER. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with and only with the
written consent of the Company and:
(a) in the case of Section 1 through Section 6, inclusive,
hereof (other than this Section 6.2), the written consent of the
Required Warrantholders; and
(b) in the case of this Section 6.2, the written consent of
all holders of Warrants then outstanding;
provided, however, that:
(i) no such amendment or waiver of any of the provisions of
this Agreement pertaining to the Purchase Price or the number or kind
of shares of Common Stock that may be purchased upon exercise of each
Warrant; and
(ii) no change hastening the occurrence of the Expiration
Date;
shall be effective as to the holder of any Warrant unless consented to in
writing by such holder.
6.3 WARRANTS SUBJECT TO SHAREHOLDERS' AGREEMENT. The holders of
the Warrants and the Company are subject in all respects to the terms of the
Shareholders' Agreement, the terms and provisions of which are incorporated
herein, mutatis mutandis, as if set forth fully herein. By its acceptance of a
Warrant, each holder of Warrants agrees to be bound by the provisions of the
Shareholders' Agreement to the extent applicable.
6.4 NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in
this Agreement shall be construed as conferring upon the holder of any Warrant
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.
6.5 DIRECTLY OR INDIRECTLY. Where any provision in this Agreement
refers to any action to be taken by any Person, or that such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person, including actions taken by or on
behalf of any partnership in which such Person is a general partner.
6.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein and in the Note Purchase
Agreement in connection herewith shall survive the execution and delivery of
this Agreement and the Warrant Certificates, the transfer by the Purchasers of
any Warrant Certificate or portion thereof or interest therein and the exercise
or expiration of any Warrant, and may be relied upon by the Purchasers or
Transferee, regardless of any investigation made at any time by or on behalf of
the Purchasers or Transferee. Subject to the preceding sentence, this Agreement
and the Warrant Certificates embody the entire agreement and understanding
between the Purchasers and the Company, and supersede all prior agreements and
understandings, relating to the subject matter hereof.
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6.7 SUCCESSORS AND ASSIGNS. All covenants and other agreements
in this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
6.8 NOTICES. All communications hereunder or under the
Subordinated Notes shall be in writing, shall be delivered by nationwide
overnight courier, or facsimile transmission (confirmed by delivery by
nationwide overnight courier sent on the day of the sending of such facsimile
transmission), and
(a) if to Connecticut General or CMP, addressed to it at:
CIG & CO.
c/o CIGNA Investments, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Securities Division S-307
with a copy to
Chase Manhattan Bank, N.A.
Private Placement Servicing
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: CIGNA Private Placements
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/1005
or at such other address as Connecticut General or CMP, as the case may
be, shall have specified to the Company in writing;
(b) if to any other holder of any Warrant Certificate,
addressed to such other holder at such address as such other holder
shall have specified to the Company in writing or, if any such other
holder shall not have so specified an address to the Company, then
addressed to such other holder in care of the last holder of such
Warrant Certificate that shall have so specified an address to the
Company; and
(c) if to the Company, addressed to it at:
The Hawk Group of Companies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TEL: ▇▇▇-▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
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or at such other address as the Company shall have specified to the
holder of each Warrant Certificate in writing; provided that any such
communication to the Company may also, at the option of the holder of
any Warrant Certificate, be delivered by any other means either to the
Company at its address specified above or to any officer of the
Company.
Any communication addressed and delivered as herein provided shall be deemed to
be received when actually delivered to the address of the addressee (whether or
not delivery is accepted) or received by the telecopy machine of the recipient.
Any communication not so addressed and delivered shall be ineffective.
6.9 SATISFACTION REQUIREMENT. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to the Purchasers or to any holder or
holders of Warrant Certificates, the determination of such satisfaction shall
be made by the Purchasers, holder or holders, as the case may be, in the sole
and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
6.10 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
6.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument.
6.12 JURISDICTION; JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR CONNECTICUT COURT IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS AND INSTRUMENTS
CONTEMPLATED HEREBY AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. NONE OF THE PARTIES HERETO SHALL SEEK A JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION PROCEDURE
BASED UPON OR ARISING OUT OF OR OTHERWISE RELATED TO THIS AGREEMENT OR ANY OF
THE WARRANTS AND EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO ANY SUCH JURY TRIAL AND ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY SUCH PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 6.12.
6.13 EXPIRATION. All Warrants that have not been exercised or
purchased in accordance with the provisions of this Agreement shall expire and
all rights of holders of such Warrants shall terminate and cease on the
Expiration Date. The Company agrees to notify each holder of Warrants, not less
than ninety (90) days but not more than one hundred fifty (150) days, prior to
the Expiration Date, in writing, of the Expiration Date and that, on the
Expiration Date, all Warrants
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remaining unexercised shall expire and all rights of holders of such Warrants
shall terminate and cease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; NEXT PAGE IS A SIGNATURE PAGE.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by one of its duly authorized
officers or representatives.
THE HAWK GROUP OF COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice Chairman of the Board
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By CIGNA Investments, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CIGNA MEZZANINE PARTNERS III, L.P.
By CIGNA Investments, Inc. (as Agent)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
[WARRANT AGREEMENT of THE HAWK GROUP OF COMPANIES, INC.]
28
ATTACHMENT A
[FORM OF WARRANT CERTIFICATE]
THE ENCUMBERING, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED BY
THIS CERTIFICATE IS RESTRICTED UNDER THE TERMS OF THAT CERTAIN SHAREHOLDERS'
AGREEMENT DATED AS OF JUNE 30, 1995, AS MAY BE AMENDED FROM TIME TO TIME, THE
PROVISIONS OF WHICH ARE HEREIN INCORPORATED BY REFERENCE. SUCH SHAREHOLDERS'
AGREEMENT PROVIDES, AMONG OTHER THINGS, THAT THIS SECURITY MAY NOT BE SOLD OR
TRANSFERRED TO ANY PERSON WHO HAS NOT EXPRESSLY ASSUMED THE OBLIGATIONS OF SUCH
AGREEMENT AND CONTAINS, AMONG OTHER PROVISIONS, PROVISIONS WHICH COULD LIMIT THE
TRANSFER OF THIS SECURITY. A COPY OF THIS AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY. UPON THE WRITTEN REQUEST OF THE HOLDER HEREOF, THE
COMPANY SHALL FURNISH A COPY OF SUCH AGREEMENT, WITHOUT CHARGE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
A TRANSACTION REGISTERED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT.
WARRANT CERTIFICATE
THE HAWK GROUP OF COMPANIES, INC.
No. WR-__ [_________] Warrants
Date: ___________ PPN: 42009# 11 7
This Warrant Certificate certifies that _____________ or registered
assigns, is the registered holder of __________ (_______) Warrants. Each Warrant
entitles the owner thereof to purchase at any time on or prior to 5:00 p.m.
Eastern Time on June 30, 2005 (the "Expiration Date"), one (1) fully paid and
nonassessable share of Class B Common Stock of THE HAWK GROUP OF COMPANIES, INC.
(together with its successors and assigns, the "Company"), a Delaware
corporation, at a Purchase Price of one cent ($.01) upon presentation and
surrender of this Warrant Certificate with a form of election to purchase duly
executed and delivery to the Company of the payment of the Purchase Price in the
manner set forth in the Warrant Agreement. The number of shares of Class B
Common Stock that may be purchased upon exercise of each Warrant and the
Purchase Price are the number and the Purchase Price as of the date hereof, and
are subject to adjustment as referred to below.
The Warrants are issued pursuant to the Warrant Agreement (as it may
from time to time be amended or supplemented, the "Warrant Agreement"), dated as
of June 30, 1995, among the Company and the Purchasers (as defined therein), and
are subject to all of the terms, provisions and conditions thereof, which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, obligations, duties and immunities of the Company and
the holders of the Warrant
Attachment A-1
29
Certificates. Capitalized terms used, but not defined, herein have the
respective meanings ascribed to them in the Warrant Agreement.
As provided in the Warrant Agreement, the Purchase Price and the number
of shares of Class B Common Stock that may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment. As further set forth in,
and subject to, the Warrant Agreement, the expiration date of this Warrant
Certificate is 5:00 p.m. Eastern Time on June 30, 2005.
This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time. If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of Warrants not exercised. This Warrant Certificate, with or without
other Warrant Certificates, upon surrender in the manner set forth in the
Warrant Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants entitling the holder to purchase
a like aggregate number of shares of Class B Common Stock as the Warrants
evidenced by the Warrant Certificate or Warrant Certificates surrendered shall
have entitled such holder to purchase.
Except as expressly set forth in the Warrant Agreement, no holder of
this Warrant Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Class B Common Stock or of any
other Securities of the Company that may at any time be issued upon the exercise
hereof, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
holder of a share of Class B Common Stock in the Company or any right to vote
upon any matter submitted to holders of shares of Class B Common Stock at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of Securities,
change of par value, consolidation, merger, conveyance, or otherwise) or, except
as provided in the Warrant Agreement, to receive notice of meetings, or to
receive dividends or subscription rights, or otherwise, until the Warrant or
Warrants evidenced by this Warrant Certificate shall have been exercised as
provided in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF CONNECTICUT.
WITNESS the signature of a proper officer of the Company as of the date
first above written.
THE HAWK GROUP OF COMPANIES, INC.
By:
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Name:
Title:
Attachment A-2
30
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfers unto
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(Please print name and address of transferee.)
the accompanying Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint:
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attorney, to transfer the accompanying Warrant Certificate on the books of the
Company, with full power of substitution.
Dated: ____________________, ________.
[HOLDER]
By
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NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.
Attachment A-3
31
[FORM OF ELECTION TO PURCHASE]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO EXERCISE THE WARRANT CERTIFICATE)
To THE HAWK GROUP OF COMPANIES, INC.:
The undersigned hereby irrevocably elects to exercise
_____________________________ Warrants represented by the accompanying Warrant
Certificate to purchase the shares of Class B Common Stock issuable upon the
exercise of such Warrants and requests that certificates for such shares be
issued in the name of:
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(Please print name and address.)
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(Please insert social security or other identifying number.)
If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:
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(Please print name and address.)
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(Please insert social security or other identifying number.)
Dated: , .
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[HOLDER]
By
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NOTICE
The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.
Attachment A-4