Exhibit 99.3
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT OR ANY SUCH STATE LAWS WHICH MAY
BE APPLICABLE.
No. WA-1 498,438 SHARES
SERIES A WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
STOKELY USA, INC.
Void after July 25, 2006
THIS IS TO CERTIFY that, for value received and subject to the
provisions hereinafter set forth, State of Wisconsin Investment
Board or assigns, is entitled to purchase from Stokely USA, Inc.,
a Wisconsin corporation (the "Company"), at any time up to and
including 5:00 P.M. E.S.T. on July 25, 2006 (the "Expiration
Date"), Four Hundred Ninety-Eight Thousand Four Hundred and Thirty-
Eight (498,438) shares of Common Stock of the Company of the par
value of $.05 per share, subject to the provisions and adjustments
and on the terms and conditions hereinafter set forth, at the price
per share equal to the Initial per share Warrant Price (as defined
in Section 13 hereof).
The aggregate price of the Common Stock which may be purchased
upon the exercise of this Warrant shall be equal to the Initial per
share Warrant Price multiplied by the number of shares initially
purchasable hereunder. The aggregate price is not subject to
adjustment and is herein sometimes referred to as the"aggregate
Warrant Price." The Initial per share Warrant Price is, however,
subject to adjustment as provided in Section 3 (such price, or such
price as last adjusted, as the case may be, being herein referred
to as the "per share Warrant Price"). The said number of shares
purchasable hereunder is likewise subject to adjustment as
hereinafter provided.
The terms which are capitalized herein shall have the meanings
specified in Section 13 unless the context shall otherwise require.
1. EXERCISE OF WARRANT.
Subject to the conditions hereinafter set forth, this Warrant
may be exercised in whole at any time or in part from time to time
prior to the Expiration Date (the "Exercise Date") by the holder
hereof, by the surrender of this Warrant (with the subscription
form at the end hereof duly executed) at the principal office of
the Company in Oconomowoc, Wisconsin, and upon payment to the
Company of the aggregate Warrant Price (or the proportionate part
thereof if exercised in part) for the shares so purchased. Payment
for the shares purchased by the holder pursuant to this Section 1
shall be made at the holder's option either (i) in funds current in
Oconomowoc, Wisconsin or (ii) by surrender for cancellation of the
Note held by such holder, at par, for the shares to be purchased.
If this Warrant is exercised in respect of less than all of the
shares of said Common Stock at the time purchasable hereunder, the
holder hereof shall be entitled to received a new Warrant of the
same series covering the number of shares in respect of which this
Warrant shall not have been exercised and setting forth the per
share Warrant Price applicable to such shares; provided, however,
that this Warrant and all rights and options hereunder shall expire
on the Expiration Date, and shall be wholly null and void to the
extent this Warrant is not exercised before it expires.
If the principal of any Note is tendered in payment of the
purchase price and the unpaid principal amount thereof exceeds the
purchase price, the Company will (without charge to the holder )
promptly issue and deliver to the holder a new Note, in exchange
for the Note so tendered, in a principal amount equal to such
excess and issued in the name of the holder or its designated
nominee or assignee and dated as provided in the Note Agreement.
2. RESERVATION OF COMMON STOCK.
The Company covenants and agrees that at all times prior to
the Expiration Date it will have authorized, and in reserve, a
sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.
3. PROTECTION AGAINST DILUTION.
The per share Warrant Price and the number of shares
deliverable hereunder shall be adjusted as hereinafter set forth:
3.1 Share Dividends, Subdivisions and Combinations. In case
after the date hereof the Company shall:
(a) take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend payable
in, or other distribution of, Common Stock, or
(b) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into
a smaller number of shares of Common Stock,
then the per share Warrant Price shall be adjusted to that price
determined by multiplying the per share Warrant price in effect
immediately prior to such event by a fraction (i) the numerator of
which shall be the total number of outstanding shares of Common
Stock of the Company immediately prior to such event, and (ii) the
denominator of which shall be the total number of outstanding
shares of Common Stock of the Company immediately after such event.
3.2 Issuance of Additional Shares of Common Stock. In case
after the date hereof the Company shall (except as hereinafter
provided) issue any Additional Shares of Common Stock for a
consideration (i) less than the then effective per share Warrant
Price or (ii) less than the Current Market Price per share, then
the per share Warrant Price upon each such issuance shall be
adjusted to that price determined by multiplying the per share
Warrant Price in effect immediately prior to such event by a
fraction:
(a) if issued for a consideration per share less than
the then effective per share Warrant Price:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to
the issuance of such Additional Shares of Common Stock
plus the number of shares of Common Stock which the
aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would
purchase at the then effective per share Warrant Price,
and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to
the issuance of such Additional Share of Common Stock
plus the number of such Additional Shares of Common Stock
so issued.
(b) if issued for a consideration per share less than
the Current Market Price per share of Common Stock:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to
the issuance of such Additional Shares of Common Stock
plus the number of shares of Common Stock which the
aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would
purchase at the Current Market Price per share, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to
the issuance of such Additional Shares of Common Stock
plus the number of such Additional Shares of Common Stock
so issued.
If such Additional Shares of Common Stock shall be issued at
a price per share less than both the then effective per share
Warrant Price and the then Current Market Price per share of Common
Stock, the per share Warrant Price shall be adjusted in the manner
which will result in the greatest reduction of the per share
Warrant Price. The provisions of this Section 3.2 shall not apply
to any Additional Shares of Common Stock which are distributed to
holders of Common Stock as a stock dividend, distribution or
subdivision, for which an adjustment is provided for under Section
3.1. No adjustment of the per share Warrant Price shall be made
under this Section 3.2 prior to or upon the issuance of any
Additional Shares of Common Stock which are issued pursuant to the
exercise of any warrants or other subscription or purchase rights
or pursuant to the exercise of any conversion or exchange rights in
any Convertible Securities, if any such adjustment shall previously
have been made upon the issuance of such warrants or other rights
or upon the issuance of such Convertible Securities (or upon the
issuance of any warrants or other rights therefor) pursuant to
Section 3.3.
3.3 Issuance of Warrants or Other Rights, Convertible
Securities. In case the Company shall issue any warrants or other
rights to subscribe for or purchase any Additional Shares of Common
Stock or issue Convertible Securities and the consideration per
share for which Additional Shares of Common Stock may at any time
thereafter be issuable pursuant to such warrants or other rights or
pursuant to the terms of such Convertible Securities shall be (i)
less than the then effective per share Warrant Price or (ii) less
than the Current Market Price, then the per share Warrant Price
shall be adjusted as provided in Section 3.2 above on the basis
that:
(a) the maximum number of Additional Shares of Common
Stock issuable pursuant to all such warrants or other rights
or necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as
of the earlier of (i) the date on which the Company shall
enter into a firm contract or commitment for the issuance of
such warrants, other rights or Convertible Securities or (ii)
the date of actual issuance of such warrants, other rights or
Convertible Securities, and
(b) the aggregate consideration for such maximum number
of Additional Shares of Common Stock shall be deemed to be the
minimum consideration received and receivable by the Company
for the issuance of such Additional Shares of Common Stock
pursuant to such warrants or other rights or pursuant to the
terms of such Convertible Securities.
No adjustment of the per share Warrant Price shall be made
under this Section 3.3 upon the issuance of any Convertible
Securities which are issued pursuant to the exercise of any
warrants or other subscription or purchase rights therefor, if any
such adjustment shall previously have been made upon the issuance
of such warrants or other rights pursuant to this Section 3.3.
3.4 Other Provisions Applicable to Adjustments Under this
Section. The following provisions shall be applicable to the
making of adjustments in the per share Warrant Price hereinbefore
provided in this Section 3:
(a) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Convertible
Securities or any warrants or other rights to subscribe for or
purchase any Additional Shares of Common Stock or any
Convertible Securities shall be issued for a cash
consideration, the consideration received by the Company
therefor shall be deemed to be the amount of the cash received
by the Company therefor, or, if such Additional Shares of
Common Stock or Convertible Securities or warrants or other
rights are offered by the Company for subscription, the
subscription price, or, if such Additional Shares of Common
Stock or Convertible Securities or warrants or other rights
are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering
price, in any such case excluding any amounts paid or
receivable for accrued interest or accrued dividends and
without deduction of any compensation, discounts or expenses
paid or incurred by the Company for and in the underwriting
thereof, or otherwise in connection with the issue thereof.
To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly
provided, the amount of such consideration shall be deemed to
be the fair value of such consideration at the time of such
issuance as determined in good faith by the Board of Directors
of the Company. The consideration for any Additional Shares
of Common Stock issuable pursuant to any warrants or other
rights to subscribe for or purchase the same shall be the
consideration received by the Company for issuing such
warrants or other rights plus the additional consideration
payable to the Company upon the exercise of such warrants or
other rights. The consideration for any Additional Shares of
Common Stock issuable pursuant to the terms of any Convertible
Securities shall be the consideration received by the Company
for issuing any warrants or other rights to subscribe for or
purchase such Convertible Securities plus the consideration
paid or payable to the Company in respect of the subscription
for or purchase of such Convertible Securities plus the
additional consideration, if any, payable to the Company upon
the exercise of the right of conversion or exchange of such
Convertible Securities. In case of the issuance at any time
of any Additional Shares of Common Stock or Convertible
Securities in payment or satisfaction of any dividend upon any
class of equity securities other than Common Stock, the
Company shall be deemed to have received for such Additional
Shares of Common Stock or Convertible Securities a
consideration equal to the amount of such dividend so paid or
satisfied.
(b) Readjustment of per share Warrant Price. Upon
expiration of the right of conversion or exchange of any
Convertible Securities, or upon the expiration of any rights,
options or warrants, or upon any increase in the minimum
consideration receivable by the Company for the issuance of
Additional Shares of Common Stock pursuant to such Convertible
Securities, rights, options or warrants, if any such
Convertible Securities shall not have been converted or
exchanged, or if any such rights, options or warrants shall
not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding by reason of the fact that
they were issuable upon conversion or exchange of any such
Convertible Securities or upon exercise of any such rights,
options or warrants shall no longer be computed as set forth
above, and the per share Warrant Price shall forthwith be
readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the per share
Warrant Price made pursuant to the provisions of this Section
3 after the issuance of such Convertible Securities, rights,
options or warrants) had the adjustment of the per share
Warrant Price made upon the issuance or sale of such
Convertible Securities or the issuance of such rights, option
or warrants been made on the basis of the issuance only of the
number of Additional Shares of Common Stock actually issued
upon conversion or exchange of such Convertible Securities or
upon the exercise of such rights, options or warrants, or upon
the basis of such increased minimum consideration, as the case
may be, and thereupon only the number of Additional Shares of
Common Stock actually so issued or the number thereof issuable
upon the basis of such increased minimum consideration shall
be deemed to have been issued and only the consideration
actually received or such increased minimum consideration
receivable by the Company (computed in accordance with Section
3.4(a)) shall be deemed to have been received by the Company.
3.5 Extraordinary Dividends. In case the Company shall
declare a dividend upon its Common Stock (except a dividend payable
in shares of Common Stock referred to in Section 3.1(a) or a
dividend payable in warrants, rights or Convertible Securities
referred to in Section 3.3) payable otherwise than out of retained
earnings or surplus (other than revaluation surplus or paid-in
surplus), the per share Warrant Price in effect immediately prior
to the declaration of such dividend shall be reduced by an amount
equal, in the case of a dividend in cash, to the amount thereof
payable per share of Common Stock or, in the case of any other
dividend, to the fair value thereof per share of Common Stock as
determined in good faith by the Board of Directors of the Company.
For the purposes of the foregoing, a dividend payable other than in
cash shall be considered payable out of retained earnings or
surplus (other than revaluation surplus or paid-in surplus) only to
the extent that such retained earnings or surplus are charged an
amount equal to the fair value of such dividend as determined by
the Board of Directors of the Company. Such reduction shall take
effect as of the date on which a record is taken for the purpose of
such dividend or, if a record is not taken, the date as of which
the holders of the Common Stock of record entitled to such dividend
are to be determined. Appropriate readjustment of the per share
Warrant Price shall be made in the event that any dividend referred
to in this Section 3.5 shall be lawfully abandoned.
3.6 Adjustment of Number of Shares Purchasable. Upon each
adjustment of the per share Warrant Price, the number of shares of
Common Stock purchasable hereunder shall be equal to the amount
determined by dividing the aggregate Warrant Price then in effect
by the per share Warrant Price in effect immediately following such
adjustment.
3.7 Minimum Adjustment. Except as hereinafter provided, no
adjustment of the per share Warrant Price hereunder shall be made
if such adjustment results in a change of the per share Warrant
Price then in effect of less than $.05. Any adjustment of less
than $.05 shall be carried forward and shall be made at the time of
and together with any subsequent adjustment which, together with he
adjustment or adjustments so carried forward, amounts to $.05 or
more of the per share Warrant Price then in effect. However, upon
the exercise of this Warrant, the Company shall make all necessary
adjustments not theretofore made to the per share Warrant Price up
to and including the date upon which this Warrant is exercised.
3.8 Notice of Adjustments. Whenever the per share Warrant
Price or number of shares deliverable upon exercise of this Warrant
shall be adjusted pursuant to this Section 3, the Company shall
promptly prepare a certificate signed by the President or a Vice
President and by the principal financial officer or principal
accounting officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the
adjustment, and the method by which such adjustment was calculated
(including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and
shall promptly cause copies of such certificate to be mailed (by
first class mail, postage prepaid) to the holder of this Warrant.
3.9 Date of Determination of Current Market Price. For all
purposes of this Warrant, the date of determination of the Current
Market Price of any Additional Shares of Common Stock shall be the
earlier of (i) the date on which the Company shall enter into a
firm contract for the issuance of such Additional Shares of Common
Stock or (ii) the date of actual issuance of such Additional Shares
of Common Stock.
4. MERGERS, CONSOLIDATIONS, SALES.
In the case of any consolidation or merger of the Company with
another entity, or the sale of all or substantially all of its
assets to another entity, or any reorganization or reclassification
of the Common Stock or other equity securities of the Company
(except a split-up or combination provision for which is made in
Section 3.1), then, as a condition of such consolidation, merger,
sale, reorganization or reclassification, lawful and adequate
provision shall be made whereby the holder of this Warrant shall
thereafter have the right to receive upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of
Common Stock immediately theretofore purchasable hereunder, such
shares of stock, securities or assets as may (by virtue of such
consolidation, merger, sale, reorganization or reclassification) be
issued or payable with respect to or in exchange for the number of
shares of Common Stock immediately theretofore so purchasable
hereunder had such consolidation, merger, sale, reorganization or
reclassification not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provision hereof
(including, with out limitation, provisions for adjustment of the
per share Warrant Price) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon exercise of this Warrant. The Company
shall not effect any such consolidation, merger or sale unless,
prior to or simultaneously with the consummation thereof, the
successor entity (if other than the Company) resulting from such
consolidation or merger or the entity purchasing such assets shall
assume, by written instrument executed and mailed or delivered to
the holder of this Warrant, the obligation to deliver to such
holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to
receive.
5. DISSOLUTION OR LIQUIDATION.
In the event of any proposed distribution of the assets of the
Company in dissolution or liquidation except under circumstances
when the foregoing Section 4 shall be applicable, the Company
shall mail notice thereof to the holder of this Warrant and shall
make no distribution to shareholders until the expiration of 30
days from the date of mailing of the aforesaid notice and, in any
such case, the holder of this Warrant may exercise the purchase
rights with respect to this Warrant within 30 days from the date of
mailing such notice and all rights herein granted not so exercised
within such 30-day period shall thereafter become null and void.
6. NOTICE OF EXTRAORDINARY DIVIDENDS.
If the Board of Directors of the Company shall declare any
dividend or other distribution on its Common Stock except out of
retained earnings or surplus or by way of a stock dividend payable
on its Common Stock, the Company shall mail notice thereof to the
holder of this Warrant not less than 15 days prior to the record
date fixed for determining shareholders entitled to participate in
such dividend or other distribution and the holder of this Warrant
shall not participate in such dividend or other distribution or be
entitled to any rights on account or as a result thereof (except
adjustments in the per share Warrant Price as provided in Section
3.5) unless and to the extent that this Warrant is exercised prior
to such record date. The provisions of this Section 6 shall not
apply to distributions made in connection with transactions covered
by Section 4.
7. FRACTIONAL SHARES.
Fractional shares shall not be issued upon the exercise of
this Warrant but in any case where the holder hereof would, except
for the provisions of this paragraph, be entitled under the terms
hereof to receive a fractional share upon the complete exercise of
this Warrant, the Company shall, upon the exercise of this Warrant
for the largest number of whole shares then called for, pay to the
holders of this Warrant a sum in cash equal to the proportional
part of the per share Warrant Price represented by such fractional
share.
8. FULLY PAID STOCK; TAXES.
The Company covenants and agrees that the shares of stock
represented by each and every certificate for its Common Stock to
be delivered on the exercise of the purchase rights herein provided
for shall, at the time of such delivery, be validly issued and
outstanding and be fully paid and nonassessable (except as set
forth in Section 180.0622 of the Wisconsin Business Corporation
Law). The Company further covenants and agrees that it will pay
when due and payable any and all Federal, State and local taxes
which may be payable in respect of the delivery of this Warrant or
any Common Stock or certificates therefor upon the exercise of the
purchase rights herein provided for pursuant to the provisions
hereof. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the
transfer and delivery of stock certificates in the name other than
that of the holder exercising this Warrant, and any such tax shall
be paid by such holder at the time of presentation.
9. CLOSING OF TRANSFER BOOKS.
The right to exercise this Warrant shall not be suspended
during any period that the stock transfer books of the Company for
its Common Stock may be closed. The Company shall not be
required, however, to deliver certificates of its Common Stock upon
such exercise while such books are duly closed for any purpose, but
the Company may postpone the delivery of the certificates for such
Common Stock until the opening of such books, and they shall, in
such case, be delivered forthwith upon the opening thereof, or as
soon as practicable thereafter.
10. RESTRICTIONS ON TRANSFERABILITY OF WARRANTS AND SHARES;
COMPLIANCE WITH LAWS.
10.1 In General. This Warrant and the Common Stock issued
upon the exercise hereof shall not be transferable except upon the
conditions hereinafter specified, which conditions are intended to
insure compliance with the provisions of the Securities Act (or any
similar Federal statute at the time in effect) and any applicable
state securities laws in respect of the transfer of this Warrant or
any such Common Stock.
10.2 Restrictive Legends. Each Warrant shall bear on the face
thereof a legend substantially in the form of the notice endorsed
on the first page of this Warrant.
Each certificate for shares of Common Stock initially issued
upon the exercise of any Warrant and each certificate for shares of
Common Stock issued to a subsequent transferee of such certificate
shall, unless otherwise permitted by the provisions of this Section
10.2, bear on the face thereof a legend reading substantially as
follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any state securities laws and may not be sold or transferred
in the absence of such registration or an exemption therefrom
under said Act and any such state laws which may be applicable
and are transferable only upon the conditions specified in the
Warrant pursuant to which such shares were issued."
In the event that a registration statement covering the
Registrable Securities shall become effective under the Securities
Act and under any applicable state securities laws or in the event
that the Company shall receive an opinion of its counsel that, in
the opinion of such counsel, such legend is not, or is no longer,
necessary or required (including, without limitation, because of
the availability of the exemption afforded by Rule 144 of the
General Rules and Regulations of the Commission), the Company
shall, or shall instruct its transfer agents and registrars to,
remove such legend from the certificates evidencing the Restricted
Stock or issue new certificates without such legend in lieu
thereof. Upon the written request of the holder or holders of any
Warrant or of any Restricted Stock, the Company covenants and
agrees forthwith to request its counsel to render an opinion with
respect to the matters covered by this Section 10.2 and to bear all
expenses in connection with the same.
10.3 Notice of Proposed Transfer; Registration Not Required.
The holder of each Warrant or any Restricted Stock, by acceptance
thereof, agrees to give prior written notice to the Company of such
holder's intention to transfer such Warrant or the Underlying
Shares relating thereto or such Restricted Stock (or any portion
thereof), describing briefly the manner and circumstances of the
proposed transfer. Promptly after receiving such written notice,
the Company shall present copies thereof to Company counsel. If in
the opinion of such counsel the proposed transfer may be effected
without registration or qualification under any Federal or state
law of such Warrant or the Registrable Securities, the Company, as
promptly as practicable, shall notify such holder of such opinion
and of the terms and conditions, if any, to be observed, whereupon
such holder shall be entitled to transfer such Warrant or such
Registrable Securities, all in accordance with the terms of the
notice delivered to such holder by the Company; provided that in
the event such counsel is unable to render such a favorable opinion
permitting such transfer, the holder of this Warrant shall be
entitled to consult with its counsel regarding the basis for such
inability to render any proposed legal opinion. If counsel for the
Company is unable to render such an opinion (in which case said
counsel shall set forth in writing the basis for its legal
conclusions in this regard), the proposed transfer described in the
written notice given pursuant to the first sentence of this Section
10.3 may not be effected except upon registration or qualification
or compliance with the conditions of an exemptive regulation of the
Commission or any applicable state securities regulatory authority.
The Company shall promptly notify such holder that registration,
qualification, filing or compliance is required prior to transfer
by such holder and thereafter such holder shall not be entitled to
effect such transfer until receipt of a subsequent notice from the
Company pursuant to the immediately preceding sentence or until
such registration, qualification, filing or compliance has become
effective. All fees and expenses of counsel of the Company
furnishing the opinion provided for in this Section 10.3 and the
reasonable fees and expenses of counsel designated by any holder of
Warrants or Restricted Stock for consultation in accordance with
this Section 10.3 shall be paid by the Company.
10.4 Required Registration.
(a) Filing of Registration Statement. The Company will,
upon the written request of the Requisite Holders given at any
time on or after July 22, 1998, requesting that the Company
effect the registration under the Securities Act of all or at
least 25% of such Requisite Holders' Registrable Securities
and specifying the Registrable Securities to be sold and the
intended method of disposition thereof, promptly give written
notice of such requested registration to all holders of
Registrable Securities, and thereupon will use its best
efforts to effect the registration (a "Required Registration")
under the Securities Act of:
(i) the Registrable Securities that the Company has
been so requested to register by the Requisite Holders,
and
(ii) all other Registrable Securities that the
Company has been requested to register by the holders
thereof by written request given to the Company within 30
days after the giving of such written notice by the
Company (which request shall specify the Registrable
Securities to be sold and the intended method of
disposition of such Registrable Securities);
all to the extent required to permit the disposition (in accordance
with the intended method thereof as aforesaid) of the Registrable
Securities so to be registered; provided, however, that the Company
shall be required to effect only four (4) registrations pursuant to
this Section 10.4 that is deemed effected under Section 10.4(e) and
pursuant to similar terms contained in the Related Warrants that is
deemed effected under the terms contained in the Related Warrants.
It is expressly acknowledged that the Company shall be required to
effect only four (4) Required Registrations as may be requested by
the holder of this Warrant and the Related Warrants. If the
Registrable Securities subject to being registered pursuant to this
Section 10.4 may be, at the time of the request in respect thereof,
registered on Form S-3, the Company may effect such registration on
Form S-3, provided that the foregoing shall not be deemed to
release the Company from complying with the requirements of this
Section 10.4 if the Company is not eligible to register the
Registrable Securities on Form S-3 at the time of a request for a
Required Registration.
(b) Time for Filing and Effectiveness. On or before the
date which is 120 days after the request for such
registration, the Company shall file with the Commission the
Required Registration with respect to all Registrable
Securities to be so registered, and shall use its reasonable
best efforts to cause such Required Registration to become
effective as promptly as practicable after the filing thereof,
but in no event later than the day which is 210 days after the
request for such registration. Notwithstanding the foregoing,
if the Company shall furnish to the Requisite Holders
requesting a Required Registration pursuant to this Section
10.4 and each other holder of Registrable Securities
participating in the registration thereunder, a certificate
signed by the President or Chief Executive Officer of the
Company stating that, in the good faith and reasonable
business judgment of the Board of Directors of the Company,
the filing of such Required Registration would materially
interfere with the filing by the Company with the Commission
of a Form 10-K or any registration statement filed prior to a
request for a Required Registration hereunder or any
acquisition or corporate reorganization or debt restructuring
by the Company, and that it is therefore essential to defer
the filing of such Required Registration, the Company shall
have the right to defer the commencement of the taking of
action with respect to such filing for a period of not more
than 180 days after receipt of the request of the Requisite
Holders; provided, however, that the Company may not utilize
this right if this right has been used under the terms of this
Warrant or the Related Warrants at any time during the
immediately preceding 365-day period. If the Company shall so
postpone the filing of such Required Registration, the
Requisite Holders and all other holders of Registrable
Securities participating therein shall have the right to
withdraw from such registration by giving written notice to
the Company within 30 days after receipt of such notice of
postponement. In connection with any such withdrawal by the
Requisite Holders, the Requisite Holders shall be deemed to
fully rescind their request for such Required Registration, in
which case said request shall be deemed rescinded and
preserved for future use, the registration and offering of all
Registrable Securities in connection with such offering will
be cancelled and the Company will pay all costs in connection
therewith.
(c) Selection of Underwriters. If Registrable
Securities that the Company has been requested to register
pursuant to a Required Registration are to be disposed of in
an underwritten public offering, the underwriters of such
offering shall be one or more underwriting firms or recognized
standing reasonably acceptable to the Requisite Holders.
(d) Priority on Required Registrations. If the managing
underwriter shall advise the Company in writing (with a copy
to each holder of Registrable Securities requesting sale)
that, in such underwriter's opinion, the number of share of
securities requested to be included in such Required
Registration exceeds the number that can be sold in such
offering within a price range acceptable to the Company (such
writing to state the basis of such opinion and the approximate
number of shares of securities that may be included in such
offering without such effect), the Company will include in
such Required Registration, to the extent of the number of
shares of securities that the Company is so advised can be
sold in such offering:
(i) first, Registrable Securities requested to be
sold by the holders thereof pursuant to this Section
10.4, pro rata among such holders on the basis of the
number of Registrable Securities requested to be so
registered by such holders, and
(ii) second, all other securities proposed to be
registered by the Company and any other stockholders, in
such proportions as the Company and such other
stockholders shall agree or as shall be set forth in any
applicable agreement between the Company and such other
stockholders.
(e) When Required Registration is Deemed Effected. A
Required Registration pursuant to this Section 10.4 shall not
be deemed to have been effected for purposes of the proviso to
Section 10.4(a) if:
(i) the registration does not become effective and
remain effective for a period of at least 120 days (or
for (A) such shorter period in which all shares of
Registrable Securities proposed to be sold in such
Required Registration are actually sold, or (B) for such
longer period (not to exceed an additional 60 days) if an
underwriter selling such shares deems such longer period
reasonably necessary in order to sell all of the shares
subject to such Required Registration), without
interference by the issuance by the Commission of any
stop order with respect thereto, unless the registration
does not become effective after the Company has filed a
registration statement because the holders of the
Registrable Securities refuse to proceed (in which case
the Required Registration will be deemed to have been
effected);
(ii) the Requisite Holders withdraw their request
for registration in its entirety at any time because the
Requisite Holders reasonably and in good faith believed
that the registration statement or any prospectus related
thereto contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein
(in the case of any prospectus, in light of the
circumstances under which they were made) not misleading,
notified the Company of such fact, and requested that the
Company correct such alleged misstatement or omission,
and the Company has refused to correct such alleged
misstatement or omission; or
(iii) the conditions to closing specified in the
purchase agreement or underwriting agreement entered into
in connection with such Required Registration are not
satisfied, other than by reason of some act or omission
by the holders of the Registrable Securities that were to
have been registered and sold.
10.5 Incidental Registration.
(a) The Company agrees that at any time it proposes to
register any of its Common Stock under the Securities Act on
Form S-1 or any other form of registration statement then
available for the registration under the Securities Act of
securities of the Company and which is appropriate for the
including therein of the Registrable Securities as herein
contemplated (excluding any registration (i) on Form S-8
relating to employee benefit plans or (ii) for the purpose of
offering such securities to another business entity or the
shareholders of such entity in connection with the acquisition
of assets or shares of capital stock, respectively, of such
entity, or (iii) described in Section 10.13) (an "Incidental
Registration"), it will give written notice to all holders of
Registrable Securities of its intention so to do and upon the
written request of the holder of any such Registrable
Securities who intends to transfer such Registrable Securities
promptly upon the effectiveness of such registration, given
within 20 days after receipt of any such notice from the
Company, the Company will in each instance use its best
efforts to cause all Registrable Securities held by any
requesting holder to be registered under said Securities Act
and registered or qualified in those jurisdictions in which
the Company intends to qualify the Common Stock under
applicable "blue sky" or other state securities laws and up to
five additional jurisdictions requested by any requesting
holder, all to the extent necessary to permit the sale or
other disposition thereof in the manner stated in such request
by the prospective seller of the securities so registered.
Any holder requesting registration of its Registrable
Securities shall in its request describe briefly the manner of
any proposed transfer of such Registrable Securities. Nothing
in this Section 10.5 shall be deemed to require the Company to
proceed with any registration of its securities after giving
the notice herein provided.
(b) The Company shall furnish to the holders of the
Registrable Securities requesting registration pursuant to
Section 10.5, on the date that the registration statement with
respect to such Registrable Securities becomes effective, and
redeliver in connection with the filing of each post-effective
amendment, (i) an opinion, dated such date, of the independent
counsel representing the Company for the purposes of such
registration, addressed to such holders, stating that such
registration statement has become effective under the
Securities Act and addressing such other customary legal
matters as reasonably requested by such holders; and (ii) to
the extent practicable a letter, dated such date, from the
independent certified public accountants of the Company,
addressed to such holders, stating that they are independent
certified public accountants within the meaning of the
Securities Act, and that, in the opinion of such accountants
within the meaning of the Securities Act, and that, in the
opinion of such accountants, the financial statements and
other financial data of the Company included in the
registration statement or the prospectus, or any amendment or
supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities
Act. Such letter from the independent certified public
accountants shall additionally cover such other financial
matters (including information as to the period ending not
more than five Business Days prior to the date of such letter)
with respect to the registration in respect of which such
letter is being given as the Requisite Holders may reasonably
request.
(c) The Company's obligation to register Registrable
Securities under this Section 10.5 shall be subject to the
condition that each holder of Registrable Securities
participating in any registered offering shall have provided
such information and executed such documents (including an
underwriting agreement) not inconsistent with the terms of
this Warrant and the Related Warrants as may be requested by
the Company and/or any underwriter in connection with such
registration.
10.6 Registration Procedures. The Company will use its best
efforts to effect each Required Registration pursuant to Section
10.4 and to cooperate with the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as
quickly as practicable, and the Company will as expeditiously as
possible:
(a) prepare and file with the Commission the
registration statement and use its best efforts to cause each
Required Registration to become effective; provided, however,
that before filing any registration statement or prospectus or
any amendments or supplements thereto, the Company will
furnish to the holders of the Registrable Securities covered
by such registration statement, their counsel, and the
underwriters, if any, and their counsel, copies of all such
documents proposed to be filed at least 10 Business Days prior
thereto, which documents will be subject to the reasonable
review, within such 10-Business Day period, of such holders,
their counsel and the underwriters; and the Company will not
file any registration statement or amendment thereto or any
prospectus or any supplement thereto (including such documents
incorporated by reference) to which the Requisite Holders
shall reasonably object within such 10-Business Day period,
and will not include or name any holder in any Required
Registration without the consent of such holder;
(b) prepare and file with the Commission such amendments
and post-effective amendments to any registration statement
and any prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by
such registration statement until such time as all of such
Registrable Securities have been disposed of in accordance
with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement, and
cause the prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act;
(c) furnish to each holder of Registrable Securities
included in any Registration and the underwriter or
underwriters, if any, without charge, at least one signed copy
of the registration statement and any post-effective amendment
thereto, upon request, and such number of conformed copies
thereof and such number of copies of the prospectus (including
each preliminary prospectus and each prospectus filed under
Rule 424 under the Securities Act), any amendment or
supplements thereto and any documents incorporated by
reference therein, as such holder or underwriter may
reasonably request in order to facilitate the disposition of
the Registrable Securities being sold by such holder (it being
understood that the Company consents to the use of the
prospectus and any amendment or supplement thereto by each
holder of Registrable Securities covered by such registration
statement and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable
Securities covered by the prospectus or any amendment or
supplement thereto);
(d) notify each holder of the Registrable Securities of
any stop order or other order suspending the effectiveness of
any registration statement, issued or threatened by the
Commission in connection therewith, and take all reasonable
actions required to prevent the entry of such stop order or to
remove it or obtain withdrawal of it at the earliest possible
moment if entered;
(e) if requested by the managing underwriter or
underwriters or any holder of Registrable Securities in
connection with any sale pursuant to a registration statement,
promptly incorporate in a prospectus supplement or post-
effective amendment such information relating to such
underwriting as the managing underwriter or underwriters or
such holder reasonably requests to be included therein; and
make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after being
notified of the matters incorporated in such prospectus
supplement or post-effective amendment;
(f) on or prior to the date on which a Required
Registration is declared effective, use its best efforts to
register or qualify, and cooperate with the holders of
Registrable Securities included in such Required Registration,
the underwriter or underwriters, if any, and their counsel, in
connection with the registration or qualification of the
Registrable Securities covered by such Required Registration
for offer and sale under the securities or "blue sky" laws of
up to ten states of the United States as any such holder or
underwriter reasonably requests in writing; use its best
efforts to keep each such registration or qualification
effective, including through new filings, or amendments or
renewals, during the period such registration statement is
required to be kept effective; and do any and all other acts
or things necessary or advisable to enable the disposition in
all such states reasonably requested of the Registrable
Securities covered by such Required Registration; provided,
however, that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it
to general service or process in any such jurisdiction where
it is not then so subject;
(g) in connection with any sale pursuant to a Required
Registration, cooperate with the holders of Registrable
Securities and the managing underwriter or underwriters, if
any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends)
representing securities to be sold under such Required
Registration, and enable such securities to be in such
denominations and registered in such names as the managing
underwriter or underwriters, if any, or such holders may
request;
(h) use its best efforts to cause the Registrable
Securities to be registered with or approved by such other
governmental agencies or authorities within the United States
and having jurisdiction over the Company or any Subsidiary as
may reasonably be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities
(provided that nothing in this clause (h) shall be deemed to
require the Company to register or qualify the Registrable
Securities in more than ten states of the United States, as
more specifically set forth in clause (f) above);
(i) make available for inspection by any holder of
Registrable Securities included in any Required Registration,
any underwriter participating in any disposition pursuant to
any Required Registration, and any attorney, accountant or
other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, as shall be reasonably necessary to
enable them to exercise their "due diligence" responsibility,
and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such person
in connection with such Required Registration;
(j) use its best efforts to obtain:
(i) at the time of effectiveness of each Required
Registration, a "comfort letter" from the Company's
independent certified public accountants covering such
matters of the type customarily covered by "cold comfort
letters" as the Requisite Holders and the underwriters
reasonably request; and
(ii) at the time of any underwritten sale pursuant
to the registration statement, a "bring-down comfort
letter," dated as of the date of such sale, from the
Company's independent certified public accountants
covering such matters of the type customarily covered by
comfort letters as the Requisite Holders and the
underwriters reasonably request;
(k) use its best efforts to obtain, at the time of
effectiveness of each Required Registration, an opinion or
opinions, reasonably acceptable to the Requisite Holders in
form and scope, from counsel for the Company in customary
form;
(l) notify each seller of Registrable Securities covered
by such Registration, upon discovery that, or upon the
happening of any event as a result of which, the prospectus
included in such Registration, as then in effect, includes an
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, and promptly
prepare, file with the Commission and furnish to such seller
or holder a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers or prospective
purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances under which they are made;
(m) use its best efforts to otherwise comply in all
material respects with all applicable rules and regulations of
the Commission, and make generally available to its security
holders (as contemplated by Section 11(a) under the Securities
Act) an earnings statement satisfying the provisions of Rule
158 under the Securities Act no later than 90 days after the
end of the 12-month period beginning with the first month of
the Company's first fiscal quarter commencing after the
effective date of the registration statement, which statement
shall cover said 12-month period;
(n) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by each
Required Registration from and after a date not later than the
effective date of such Required Registration;
(o) use its best efforts to cause all Registrable
Securities covered by each Required Registration to be listed
subject to notice of issuance, prior to the date of the first
sale of such Registrable Securities pursuant to such Required
Registration, on each securities exchange on which the Common
Stock (or other securities issuable upon exercise of the
Warrants) issued by the Company are then listed, or admitted
to trading on NASDAQ, if the Common Stock or any such other
securities are then admitted to trading on NASDAQ; and
(p) enter into such agreements (including underwriting
agreements in customary form) and take such other actions as
the Requisite Holders shall reasonably request in order to
expedite or facilitate the disposition of such Registrable
Securities pursuant to each Required Registration.
The Company may require each holder of Registrable Securities that
will be included in any Registration to furnish the Company with
such information in respect of such holder of its Registrable
Securities that will be included in such Registration as the
Company may reasonably request and as is required by applicable
laws or regulations.
10.7 Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement
registering Registrable Securities under the Securities Act
pursuant to a Required Registration, the Company will give the
holders of such Registrable Securities so registered, their
underwriters, if any, and their respective counsel and accountants
the opportunity to participate in the preparation of such
registration statement (other than reports and proxy statements
incorporated therein by reference and lawfully and properly filed
with the Commission) and each prospectus included therein or filed
with the Commission, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary,
in the opinion of such holders or such underwriters, to conduct a
reasonable investigation within the meaning of Section 11(b)(3) of
the Securities Act.
10.8 Rights of Requesting Holders. Each holder of Registrable
Securities which makes a written request therefor within 30 days
after the notice to such holders provided for in Section 10.4 or
Section 10.5, as the case may be, shall have the right to receive
copies of the information, notices and other documents described in
Section 10.6(c), Section 10.6(l) and Section 10.6(m) in connection
with any proposed Registration by the Company under the Securities
Act.
10.9 Expenses.
(a) The holder of this Warrant agrees to pay a pro rata
share of the direct out of pocket costs of the Company paid to
third parties, including registration fees, qualification
fees, reasonable legal expenses of the Company, printing
expenses, the costs of special audits or "cold comfort"
letters and expenses of underwriters, and the reasonable fees
and expenses of any necessary special experts in connection
with all registrations, qualifications, notifications or
exemptions pursuant to Sections 10.4 or 10.13 and all
offerings and sales by each holder of the Restricted Stock
which is being registered in such registration pursuant to
Sections 10.4 or 10.13, the holder's pro rata share to be
determined with reference to the total number of shares of
stock included in such Registration.
(b) The Company agrees to pay all expenses (including
without limitation registration fees, qualification fees,
legal expenses (including the reasonable fees and expenses of
one counsel to the holders of Warrants or Restricted Stock
whose Underlying Shares relating to such Warrants or whose
Restricted Stock are being registered in any Incidental
Registration), printing expenses, the costs of special audits
or "cold comfort" letters and expenses of underwriters,
excluding discounts and commissions but including the
reasonable fees and expenses of any necessary special experts)
in connection with any registrations, qualifications,
notifications or exemptions pursuant to Section 10.5, other
than as described in Section 10.9(a) above, and all offerings
and sales by each such holder of the Restricted Stock which is
being registered in such registration pursuant to Section
10.5, other than as described in Section 10.9(a) above.
10.10 Indemnification. In connection with each
registration, qualification, notification, or exemption of
securities under Section 10.4 or Section 10.5, the Company hereby
agrees to indemnify the holder of the Warrants and/or Restricted
Stock, and each underwriter thereof including each person, if any,
who controls such Warrant holder or stockholder within the meaning
of Section 15 of the Securities Act, against all losses, claims,
damages and liabilities caused by any untrue, or alleged untrue,
statement of a material fact contained in any registration
statement or prospectus or notification or offering circular (and
as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus or
caused by any omission, or alleged omission, to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue
statement or alleged untrue statement or omission based upon
information furnished in writing to the Company or any such
underwriter by or on behalf of such holder expressly for use
therein, and the Company and each officer, director and
controlling person of the Company shall be indemnified by each
holder of Warrants and/or Restricted Stock for all such losses,
claims, damages and liabilities caused by any untrue, or alleged
untrue, statement or omission, or alleged omission, based upon
information furnished in writing to the Company by such holder for
any such use.
Promptly upon receipt by a party indemnified under this
Section 10.10 of notice of the commencement of any action against
such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party under
this Section, such indemnified party shall notify the indemnifying
party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of
any liability which it may have to any indemnified party otherwise
than under this Section 10.10. In case notice of commencement of
any such action shall be given to the indemnifying party as above
provided, the indemnifying party shall be entitled to participate
in and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense of
such action at its own expense, with counsel chosen by it and
satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but fees and expenses of
such counsel (other than reasonable costs of investigation) shall
be paid by the indemnified party unless the indemnifying party
either agrees to pay the same or fails to assume the defense of
such action with counsel satisfactory to the indemnified party. No
indemnifying party shall be liable for any settlement entered into
without its consent.
10.11 Other Registration of Common Stock. If any shares
of Common Stock required to be reserved for purposes of the
exercise of Warrants require registration with or approval of any
governmental authority under any federal or state law (other than
the Securities Act) before such shares may be issued upon
conversion, the Company will, at its expense and as expeditiously
as possible, use its best efforts to cause such shares to be duly
registered or approved, as the case may be.
10.12 Availability of Information. The Company will use
its best efforts to comply with the reporting requirements of
Sections 13 and 15(d) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission
promulgated thereunder, and use its best efforts to comply with all
other public information reporting requirements of the Commission
as from time to time in effect, and cooperate with the holders of
Registrable Securities so as to permit disposition of the
Registrable Securities (including, without limitation, the current
public information requirements of Rule 144(c) and Rule 144A under
the Securities Act). The Company will also cooperate with each
holder of any Registrable Securities in supplying such information
as may be necessary for such holder to complete and file any
information reporting forms presently or hereafter required by the
Commission as a condition to the availability of an exemption from
the Securities Act for the sale of any Registrable Securities.
10.13 Nationwide Warrants. The Company agrees that at any
time it has received a request from any holder of the Nationwide
Warrants to register any of its Registrable Securities in a
Required Registration (as such terms are defined in the Nationwide
Warrants), it will give written notice to all holders of
Registrable Securities hereunder of its intention to proceed with
such registration, and upon the written request of the holder of
any such Registrable Securities who intends to transfer such
Registrable Securities promptly upon the effectiveness of such
registration, given within 20 days after receipt of any such notice
from the Company, and the consent of the Requisite Holders (as
defined in the Nationwide Warrants) of the Nationwide Warrants to
the inclusion of such Registrable Securities in such registration,
the Company will in each instance use its best efforts to cause all
Registrable Securities held by any requesting holder to be included
in such registration.
11. PARTIAL EXERCISE AND PARTIAL ASSIGNMENT.
If this Warrant is exercised in part only, the holder hereof
shall be entitled to receive a new Warrant of the same series
covering the number of shares in respect of which this Warrant
shall not have been exercised as provided in Section 1. If this
Warrant is partially assigned, this Warrant shall be surrendered at
the principal office of the Company (with the partial assignment
form at the end hereof duly executed), and thereupon a new Warrant
of the same series shall be issued to the holder hereof covering
the number of shares not assigned and setting forth the
proportionate aggregate Warrant Price applicable to such shares not
assigned. The assignee of such partial assignment of this Warrant
shall also be entitled to receive a new Warrant of the same series
covering the number of shares so assigned and setting forth the
proportionate aggregate Warrant Price applicable to such assigned
shares.
12. WARRANT DENOMINATIONS.
Warrants are issued or transferable in the minimum
denomination of 1,000 shares and any amount of shares in excess
thereof (as nearly as may be practicable and subject to required
adjustments hereunder), and the Warrants of each denomination are
interchangeable upon surrender thereof at the principal office of
the Company for Warrants of other denominations, but aggregating
the same number of shares and of the same series as the Warrants so
surrendered. All Warrants will be dated the same date as this
Warrant.
13. DEFINITIONS.
In addition to the terms defined elsewhere in this Warrant,
the following terms have the following respective meanings:
The term "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Company on or after the date
of this Warrant, except
(a) Common Stock issued upon exercise of the Warrants;
(b) Common Stock issued upon exercise of the Nationwide
Warrants; and
(c) Up to 625,000 shares of Common Stock issued to
officers of the Company under the Company's stock option,
stock purchase or other benefit plans.
The term "Business Day" shall mean any date except a Saturday,
Sunday or other day on which commercial banks are generally not
open for business in Milwaukee, Wisconsin
The term "Commission" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering
the Securities Act or Trust Indenture Act, as the case may be.
The term "Common Stock" as used herein shall include any class
of capital stock of the Company now or hereafter authorized, the
right of which to share in distributions either of earnings or
assets of the Company is without limit as to any amount or
percentage; provided, however, that the shares of Common Stock
deliverable upon the exercise of the rights granted under this
Warrant shall include only Common Stock of the Company having a par
value of $.05 per share authorized at the date hereof and any class
of Common Stock issued in substitution therefor.
The term "Convertible Securities" shall mean evidence of
indebtedness shares of stock or other securities which are
convertible into or exchangeable for Additional Shares of Common
Stock, either immediately or upon the arrival of a specified date
or the happening of a specified event.
The term "Current Market Price" per share of Common Stock for
the purposes of any provision of this Warrant shall be, as of the
date of any determination thereof, deemed to be the average of the
daily market prices per share for the five consecutive Business
Days immediately preceding the date of determination. The market
price for each such Business Day shall be (i) if the Common Stock
shall at the time be listed or admitted to unlisted trading
privileges on the New York Stock Exchange, on the basis of the last
reported sale price regular way of the Common Stock on the
Composite Tape (or if the Common Stock at the time be not so listed
or admitted to unlisted trading privileges on the New York Stock
Exchange but be listed or admitted to unlisted trading privileges
on another national securities exchange, on the basis of the last
reported sale price regular way on a national securities exchange
on which the Common Stock is at the time listed or admitted to
unlisted trading privileges) on each such Business Day upon which
such a sale shall have been effected (or if no sale takes place on
any such day on such exchange, the average of the closing bid and
asked prices on such day as officially quoted on such exchange), or
(ii) if the Common Stock is not at the time so listed or admitted
to unlisted trading privileges on a national securities exchange,
on the basis of the average of the highest reported bid and lowest
reported asked prices of the Common Stock in the over-the-counter
market on each such Business Day, as reported by the National
Association of Securities Dealers Automated Quotations System
("NASDAQ") or similar organization if NASDAQ is no longer reporting
such information or, if not so available, the fair market price as
determined in good faith by the Board of Directors of the Company.
The term "Form S-3" shall mean such form under the Securities
Act as in effect on the date hereof or any registration form under
the Securities Act subsequently adopted by the Commission which
permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the
Commission.
The term "Initial per share Warrant Price" shall mean
the lesser of
(a) $2.25, and
(b) the average of the daily market prices per share
(determined in accordance with the definition of "Current
Market Price") of the Common Stock for the ten (10)
consecutive Business Days immediately following the
Business Day on which the Company publicly announces the
Restructuring (as such term is defined in the Note
Agreement) provided that in the event the Restructuring
does not take place, the Initial per share Warrant Price
shall be as set forth in clause (a) of this definition.
The term "Nationwide Warrants" shall mean the warrants
initially issued by the Company on the date hereof to Nationwide
Life Insurance Company, Employers Life Insurance Company and West
Coast Life Insurance Company and all warrants hereafter issued in
exchange for the Nationwide Warrants.
The term "Note Agreement" shall mean the Amended and Restated
Note Agreement dated as of July 25, 1996, as amended from time to
time, among the Company and State of Wisconsin Investment Board.
The term "Note" shall mean the Senior Secured Note due January
15, 2000, of the Company issued pursuant to the Note Agreement.
The term "Registrable Securities" shall mean, at any time:
(a) any shares of Common Stock that have been issued
upon the exercise of any Warrant; and
(b) any shares of Common Stock that are issuable upon
the exercise of Warrants which are exercisable at such time.
For purposes of Section 10 of this Warrant, holders of Warrants at
any time shall be deemed to be holders of Registrable Securities
described in clause (b) of this definition that are at such time
issuable upon exercise in full of such Warrants. As to any
particular Registrable Securities, once issued, such Securities
shall cease to be Registrable Securities:
(i) when a registration statement with respect to
the sale of such Securities shall have become effective
under the Securities Act and such Securities shall have
been disposed of in accordance with such registration
statement;
(ii) when such Securities shall have been
distributed to the public pursuant to Rule 144 (or any
successor provision) under the Securities Act;
(iii) when such Securities shall have been
otherwise transferred and subsequent disposition thereof
shall not require registration or qualification under the
Securities Act;
(iv) when such Securities shall have ceased to be
outstanding or (with respect to Registrable Securities
described in clause (b) of this definition) issuable upon
exercise of the Warrants; or
(v) when such Securities shall be held (directly
or indirectly) by the Company, any Subsidiary or
any Affiliate.
The term "Registration" shall mean each Required Registration
and each Incidental Registration.
The term "Related Warrants" shall mean the warrants (other
than this Warrant) of series A and series B initially issued by the
Company on the date hereof to the holder of the Note.
The term "Requisite Holders" shall mean the holders of
Warrants and Restricted Stock which constitute 50% or more of the
sum of (i) the Underlying Shares which are issued upon the exercise
of all Warrants then outstanding plus (ii) the aggregate number of
shares of Restricted Stock at the time outstanding.
The term "Restricted Stock" shall mean the shares of Common
Stock of the Company issued upon the exercise of any of the
Warrants and evidenced by a certificate required to bear the legend
specified in Section 10.2.
The term "Securities Act" shall mean the Securities Act of
1933, as amended, or any similar Federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be
in effect at the time.
The term "Trust Indenture Act" shall mean the Trust Indenture
Act of 1939, or any similar Federal statue, and the rules and
regulations of the Commission thereunder, all as the same shall be
in effect at the time.
The term "Underlying Shares" shall mean the shares of Common
Stock of the Company issuable upon exercise of any of the Warrants.
The term "Warrants" as used herein shall mean this Warrant and
the Related Warrants and all warrants hereafter issued in exchange
or substitution for this Warrant or any Related Warrants.
14. LOST, STOLEN WARRANTS, ETC.
In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company may issue a new Warrant of like date,
series, tenor and denomination and deliver the same in exchange and
substitution for and upon surrender and cancellation of the
mutilated Warrant, or in lieu of the Warrant lost, stolen or
destroyed, upon receipt of evidence satisfactory to the Company of
the loss, theft or destruction of such Warrant, and upon receipt of
evidence of indemnity satisfactory to the Company. If an
institutional holder is the owner of any such lost, stolen or
destroyed Warrant, then the affidavit of an authorized officer of
such owner, setting forth the facts of loss, theft or destruction
and of its ownership of the Warrant at the time of such loss, theft
or destruction shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the
execution and delivery of a new Warrant other than the written
agreement of such owner to indemnify the Company.
15. WARRANT HOLDER NOT SHAREHOLDER.
This Warrant does not confer upon the holder hereof any right
to vote or to consent or to receive notice as a shareholder of the
Company, as such, in respect of any matters whatsoever, or any
rights or liabilities as a shareholder, prior to the exercise
hereof as hereinbefore provided.
16. SEVERABILITY.
Should any part of this Warrant for any reason be declared
invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force
and effect as if this Warrant had been executed with the invalid
portion thereof eliminated, and it is hereby declared the intention
of the parties hereto that they would have executed and accepted
the remaining portion of this Warrant without including therein any
such part, parts or portion which may, for any reason, be hereafter
declared invalid.
17. INDEX AND CAPTIONS.
The index and the descriptive headings of the various sections
of this Warrant are for convenience only and shall not affect the
meaning or construction of the provisions hereof.
18. APPLICABLE LAW.
This Warrant will be construed in accordance with and governed
by the laws of the State of Wisconsin.
IN WITNESS WHEREOF, Stokely USA, Inc. has caused this Warrant
to be signed by its President or one of its Vice Presidents and its
corporate seal to be hereunto affixed and attested by its Secretary
or one of its Assistant Secretaries and this Warrant to be dated
July 25, 1996.
STOKELY USA, INC.
President
ATTEST:
Secretary
SUBSCRIPTION
STOKELY USA, INC.
The undersigned, ________________, pursuant to the provisions
of the within Warrant hereby elects to purchase ______________
shares of Common Stock of Stokely USA, Inc. covered by the within
Warrant.
Signature
Address
Dated:
ASSIGNMENT
FOR VALUE RECEIVED ___________________________ hereby sells,
assigns and transfer unto _________________________ the within
Warrant and all rights evidenced thereby and does irrevocably
constitute and appoint _______________________, attorney, to
transfer the said Warrant on the books of the within-named Company.
Dated:
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED ___________________ hereby sells, assigns
and transfers unto ____________________ that portion of the within
Warrant and the rights evidenced thereby which will on the date
hereof entitle the holder to purchase _____________ shares of
Common Stock of Stokely USA, Inc., and does hereby irrevocably
constitute and appoint ______________________, attorney, to
transfer that part of the said Warrant on the books of the within-named Company.
Dated: