THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER THE ACT OR STATE SECURITIES LAWS OR AN
EXEMPTION THEREFROM.
FORM OF
CLOSING COMMON STOCK PURCHASE WARRANT
OF
ABC-NACO INC.
No. _____ Certificate for _________ Warrant Shares
ABC-NACO INC., a Delaware corporation (the "Company"), hereby certifies
that ___________________, or assigns, is the holder of the warrant set forth
above (the "Warrant"). The Warrant entitles the holder thereof (a "Holder"),
subject to the provisions contained herein, to purchase from the Company the
aggregate number of shares of common stock, par value $.01 per share, of the
Company ("Common Stock") set forth above (the "Warrant Shares"), at the exercise
price of $.01 per share (the "Exercise Price"), subject to adjustment upon the
occurrence of certain events described hereinafter. The Warrant shall terminate
and become void as of 5:00 p.m., Chicago time, on June 25, 2011 (the "Expiration
Date").
1. Do not Remove.
This Warrant is issued under and in accordance with the Series C Preferred
Stock and Common Stock Warrant Purchase Agreement, dated as of April 17, 2001
(the "Stock Purchase Agreement"), between the Company and the Investors named
therein.
The Exercise Price and the number of shares of Common Stock issuable upon the
exercise of the Warrant are subject to adjustment as provided hereinafter in
Section 2.
All shares of Common Stock issuable by the Company upon the exercise of the
Warrant shall, upon such issuance, be duly and validly issued, fully paid and
non-assessable.
1.1. Exercise Period. This Warrant may be exercised, by the Holder, at
any time and from time to time, commencing on the date of the original
issuance of this Warrant up to and including the Expiration Date.
1.2. Exercise Procedure. In order to exercise the Warrant, the Holder
hereof must surrender the Warrant at the office of the Company, at 2001
Butterfield Road, Suite 502, Downers Grove, Illinois 60515, Attention:
Secretary, or such other address as the Company may specify by written notice to
the Holder hereof, with the Exercise Subscription Form attached hereto as
Exhibit A duly executed by the Holder hereof, together with any required payment
in full of the Exercise Price then in effect for the Warrant Shares, as to which
the Warrant is submitted for exercise, all subject to the terms and conditions
hereof. Any such payment of the Exercise Price shall be in cash (except as
provided in Section 1.4 hereof), payable to the order of the Company, by bank
check or wire transfer of an amount equal to the applicable Exercise Price.
1.3. Partial Exercise. This Warrant may be exercised for less than the
aggregate number of Warrant Shares, in which case the number of Warrant Shares
receivable upon the exercise of this Warrant as a whole, and the sum payable
upon the exercise of this Warrant as a whole, shall be proportionately reduced.
Upon any such partial exercise, the Company, at is expense shall forthwith issue
to the Holder hereof a new Warrant or Warrants of like tenor calling for the
number of remaining Warrant Shares as to which rights have not been exercised,
such Warrant or Warrants to be issued in the name of the holder hereof or its
nominee (upon payment by such holder of any applicable transfer taxes).
1.4. Net Issue Exercise.
(a) In lieu of paying the Exercise Price in cash, the Holder may elect to
pay the Exercise Price with Warrant Shares by surrender of this Warrant at the
principal office of the Company together with notice of such election, in which
event the Company shall issue to the Holder that number of Warrant Shares
computed using the following formula:
[GRAPHIC OMITED]
Where
X is the number of Warrant Shares to be issued to Holder pursuant to this
Section 1.4;
Y is the number of Warrant Shares as to which Holder is exercising this
Warrant;
A is the Fair Market Value Price (as hereinafter defined) of the Company's
Common Stock in effect under this Warrant as of the date of exercise of this
Warrant; and
B is the Exercise Price in effect under this Warrant as of the date of
exercise of this Warrant.
(b) As used herein, the "Fair Market Value Price" of the Company's Common
Stock shall be the average of the closing prices per share of the Company's
Common Stock as reported by the Nasdaq National Market ("NASDAQ") (or on any
exchange on which Common Stock is listed) or, if there is no such closing price,
the average of the closing bid and asked prices quoted in the
Over-The-Counter Market Summary, whichever is applicable, as published in the
Eastern Edition of The Wall Street Journal for the ten (10) trading days
immediately prior to the date of determination of such price. If the Company's
Common Stock is not traded on NASDAQ (or other exchange) or Over-The-Counter,
the "Fair Market Value Price" of the Company's Common Stock shall be the price
per share as determined in good faith by the Company's Board of Directors.
1.5. Expenses in Connection with Exercise. The Company shall pay all
taxes and other governmental charges that may be imposed on the Company or on
the Warrant or on the Warrant Shares or any other securities deliverable upon
exercise of the Warrant. The Company shall not be required, however, to pay any
tax or other charge imposed in connection with any transfer involved in the
issue of any certificate for shares of Common Stock or other securities
underlying the Warrant or payment of cash to any person other than the Holder of
the Warrant surrendered upon the exercise of a Warrant, and in case of such
transfer or payment, the Company shall not be required to issue any stock
certificate or pay any cash until such tax or other charge has been paid or it
has been established to the Company's satisfaction that no such tax or other
charge is due.
2. Do not Remove.
2.1. Adjustments. The number of Warrant Shares issuable upon exercise
of the Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case the holders of Common Stock (or any Other
Securities, as defined below) have received, or (on or after the record date
fixed for the determination of stockholders eligible to receive) have become
entitled to receive, without payment therefor,
(i) other or additional stock or other securities or property (other than
cash) by way of dividend, or
(ii) any cash (excluding cash dividends payable solely out of earnings or
earned surplus of the Company), or
(iii) other or additional stock or other securities or property (including
cash) by way of spin-off, split-up, reclassification, recapitalization,
combination of shares or similar corporate rearrangement, or any merger or
consolidation or the sale, conveyance or disposition of a majority of the assets
of the Company and its Subsidiaries on a consolidated basis (other than to a
wholly owned Subsidiary of the Company),
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock-split (adjustments in respect of which are provided
for in Section 2.1(b)), then and in each such case the Holder, on the exercise
hereof as provided in Section 1, will be entitled to receive the amount of stock
and other securities and property (including cash in the cases referred to in
subdivisions (ii) and (iii) of this Section 2.1(a)) that such Holder would be
entitled to receive on the date of such exercise if on the date hereof, such
Holder had been the holder of record of the number of shares of Common Stock
called for on the face of this Warrant and had thereafter, during the period
from the date hereof up to and including the date of such exercise, retained
such shares and all such other or additional stock and other securities and
property (including cash in the cases referred to in clauses (ii) and (iii) of
this Section 2.1(a)) receivable by such Holder as aforesaid during such period,
giving effect to all adjustments called for during such period by Section
2.1(b). The term "Other Securities" means stock or other securities of the
Company or any other Person (i) which the Holder at any time shall be entitled
to receive, or shall have received, on the exercise of this Warrant, in lieu of
or in addition to Common Stock, or (ii) which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common Stock or such
other stock or securities pursuant to the terms hereof.
(b) Adjustment for Stock Dividend, Stock Split, etc. If the Company (i)
issues additional shares of Common Stock as a dividend or other distribution on
outstanding shares of Common Stock, (ii) subdivides its outstanding shares of
Common Stock, (iii) combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, and then, in each such event, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to the record date for such dividend or distribution or the effective date
of such subdivision or combination shall be adjusted, and thereafter
simultaneously with such event, The Exercise Price shall be adjusted by
multiplying the current Exercise Price by a fraction, the numerator of which
will be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which will be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained will
thereafter be the Exercise Price then in effect ; provided, however, that in no
event shall the Exercise Price of this Warrant be adjusted downward to an amount
that is below the then current par value of the Common Stock. An adjustment
made pursuant to this Section 2.1(b) shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event.
(c) Notices of Record Date, etc. In the event of:
(i) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any sale of the Company
(whether by sale of stock, merger, consolidation or sale of all or substantially
all the assets of the Company or otherwise), or
(iii) any voluntary or involuntary dissolution, liquidation or winding-up of
the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (A) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, and (B) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) will be entitled to exchange their shares of Common
Stock (or Other Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice will be mailed at
least ten (10) Business Days prior to the date specified in such notice on which
any such action is to be taken. For purposes of this Warrant, the term "Other
Securities" shall mean stock or other securities of the Company or any other
entity (corporate or otherwise) (i) which the Holder at any time shall be
entitled to receive, or shall have received, on the exercise of this Warrant, in
lieu of or in addition to Common Stock, or (ii) which at any time shall be
issuable or shall have been issued in exchange for or in replacement of Common
Stock or such other stock or securities pursuant to the terms hereof; and the
term "Business Day" shall mean any day other than Saturday, Sunday or other day
in which commercial money center banks in New York City, New York are closed for
business.
(d) De Minimis Adjustments. No adjustment in the number of shares of Common
Stock issuable hereunder shall be required unless such adjustment would
require an increase or decrease of at least one-tenth of one percent (.1%) in
the number of shares of Common Stock purchasable upon an exercise of each
Warrant; provided, however, that any adjustments which by reason of this Section
2.1(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations shall be made to the
nearest one one-thousandth (1/1,000) of a share.
2.2. Officers' Statement as to Adjustments. Whenever the number of
Warrant Shares or other stock or property issuable upon the exercise of this
Warrant or the Exercise Price shall be adjusted as provided in Section 2.1(a)
and Section 2.1(b) hereof, respectively, the Company shall forthwith (i) file at
each office designated for the exercise of this Warrant a statement, signed
by the Chairman of the Board, the President, or any Vice President or Treasurer
of the Company, and (ii) provide written notice, sent by mail, first class,
postage prepaid, to the record Holder of this Warrant at its address appearing
on the stock register, in each case showing in reasonable detail the facts
requiring such adjustment and the computation by which such adjustments were
made.
2.3. Fractional Interest. The Company may, but shall not be required
to, issue fractional shares of Common Stock on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full shares of Common Stock which shall be
issuable upon such exercise thereof shall be computed on the basis of the
aggregate number of shares of Common Stock acquirable on exercise of the
Warrants so presented. If any fraction of a share of Common Stock would, except
for the provisions of this Section 2.3 be issuable on the exercise of any
Warrant (or specified portion thereof), the Company may, in lieu thereof, pay an
amount in cash calculated by it to be equal to the then current market value per
share of Common Stock (as determined by the Board of Directors) multiplied by
such fraction computed to the nearest whole cent; provided, however, that in the
event the Company is unable or is not permitted under applicable law or under
any applicable financing agreements to pay such amount in cash, the Company
shall issue fractional shares rounded to the nearest one one-hundredth (1/100)
of a share.
2.4. Adjustment by Board of Directors. If any event occurs as to which
the provisions of Section 2.1 are not strictly applicable or if strictly
applicable would not fairly protect the rights of the Holder of this Warrant in
accordance with the essential intent and principles of such provisions, then the
Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such rights as aforesaid, but in no event shall any adjustment have the
effect of increasing the Exercise Price as otherwise determined pursuant to any
of the provisions of Section 2.1 except in the case of a combination of shares
of a type contemplated in Section 2.1(a) and then in no event to an amount
larger than the Exercise Price as adjusted pursuant to Section 2.1(b).
3. Do not Remove.
3.1. Exchange of Warrant. At the option of the Holder, the Warrant may
be exchanged at such office, and upon payment of the charges hereinafter
provided. Whenever the Warrant is so surrendered for exchange, the Company
shall execute and deliver the Warrant that the Holder making the exchange is
entitled to receive.
3.2. Company's Obligations. A Warrant issued upon any registration of
transfer or exchange of the Warrant shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits
under this Warrant, as the Warrant surrendered for such registration of transfer
or exchange.
3.3. Evidence of Transfer or Assignment. This Warrant, if surrendered
for registration of transfer or exchange shall (if so required by the Company)
be duly endorsed, or be accompanied by a written instrument of transfer in form
attached hereto as Exhibit B, duly executed by the Holder thereof or such
Holder's attorney duly authorized in writing.
3.4. Delivery of Stock Certificates on Exercise. As soon as
practicable after the exercise of this Warrant and payment of the Exercise
Price, and in any event within ten (10) Business Days thereafter, the Company,
at its expense, will cause to be issued in the name of and delivered to the
holder hereof a certificate or certificates for the number of fully paid and
non-assessable shares or other securities or property to which such holder shall
be entitled upon such exercise, plus, in lieu of any fractional share to which
such holder would otherwise be entitled, cash in an amount determined in
accordance with Section 2.3 hereof. The Company agrees that the shares so
purchased shall be deemed to be issued to the holder hereof as the record owner
of such shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares as aforesaid.
3.5. No Charges. No service charge shall be made for any registration
of transfer or exchange of the Warrant.
4. Do not Remove.
4.1. No Voting Rights. Prior to the exercise of the Warrant, no Holder
of this Warrant, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote, to consent, to
exercise any preemptive right, to receive any notice of meetings of stockholders
for the election of directors of the Company or any other matter or to receive
any notice of any proceedings of the Company, except as may be specifically
provided for herein.
4.2. Right of Action and Remedies. All rights of action in respect of
this Warrant are vested in the Holder of the Warrant, and any Holder of the
Warrant or the Holder of any other Warrant, may, in such Holder's own behalf and
for such Holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce, or otherwise
in respect of, such Holder's right to exercise, exchange or tender for purchase
such Holder's Warrant in the manner provided herein. The Company stipulates
that the remedies at law of the holder of this Warrant in the event of any
default by the Company in the performance of or compliance with any of the terms
of this Warrant are not and will not be adequate, and that the same may be
specifically enforced.
5. Do not Remove.
5.1. Surrender of Warrant. A Warrant surrendered for exercise or
redemption shall, if surrendered to the Company shall be promptly canceled by
the Company and shall not be reissued by the Company. The Company shall destroy
such each canceled Warrant.
5.2. Mutilated, Destroyed, Lost and Stolen Warrants.
(a) If (i) a mutilated Warrant is surrendered to the Company or (ii) the
Company receives evidence to its reasonable satisfaction of the destruction,
loss or theft of the Warrant, and there is delivered to the Company such
security or indemnity as may be required by it to save it harmless, then, in the
absence of notice to the Company that such Warrant has been acquired by a
bona fide purchaser, the Company shall execute and deliver, in exchange for any
such mutilated Warrant or in lieu of any such destroyed, lost or stolen Warrant,
a new Warrant of like tenor and for a like aggregate number of Warrant Shares.
(b) Upon the issuance of any new Warrant under this Section 5.2, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the reasonable fees and expenses of the Company and of counsel to the
Company) in connection therewith.
(c) A new Warrant executed and delivered pursuant to this Section 5.2 in
lieu of any destroyed, lost or stolen Warrant shall constitute an original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Warrant shall be at any time enforceable by anyone, and shall be entitled
to the benefits of this Warrant equally and proportionately with any and all
other Warrants duly executed and delivered hereunder.
(d) The provisions of this Section 5.2 are exclusive and shall preclude (to
the extent lawful) all other rights or remedies with respect to the replacement
of mutilated, destroyed, lost or stolen Warrants.
5.3. Notices. (a) Except as otherwise provided in Section 5.3(b), any
notice, demand or delivery authorized by this Warrant shall be sufficiently
given or made when mailed if sent by first-class mail, postage prepaid, or by
facsimile, addressed to any Holder of the Warrant at such Holder's address or
facsimile number shown on the register of the Company and to the Company as
follows:
If to the Company:
ABC-NACO INC.
2001 Butterfield Road
Suite 502
Downers Grove, Illinois 60515
Attention: Secretary
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery.
(a) Hidden text do not remove
(b) Any notice required to be given by the Company to the Holder shall be
made by mailing by registered mail, return receipt requested, or by facsimile to
the Holders at their respective addresses shown on the register of the Company.
Any notice that is mailed or sent via facsimile in the manner herein provided
shall be conclusively presumed to have been duly given when mailed or
transmitted, whether or not the Holder receives the notice.
5.4. Persons Benefiting. This Warrant shall be binding upon and inure
to the benefit of the Company, and its respective successors and assigns, and
the Holder, from time to time, of the Warrant. Nothing in this Warrant is
intended or shall be construed to confer upon any Person, other than the
Company, and the Holder of the Warrant any right, remedy or claim under or by
reason of this Warrant or any part hereof.
5.5. Counterparts. This Warrant may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
5.6. Headings. The descriptive headings of the several Sections of
this Warrant are inserted for convenience and shall not control or affect the
meaning or construction of any of the provisions hereof.
5.7. Amendments. The Company shall not, without the prior written
consent of the Holder of the Warrant, by supplemental agreement or otherwise,
make any changes, modifications or amendments to this Warrant.
5.8. Applicable Law. THIS WARRANT AND ALL RIGHTS ARISING HEREUNDER
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
AND INSTRUMENTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
5.9. Waiver of Jury Trial. EACH PARTY TO THIS WARRANT, AND EACH HOLDER
BY ACCEPTANCE OF THE WARRANT, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
This Warrant shall not be valid for any purpose until it shall have been signed
by the Company.
Dated: June __, 2001
ABC-NACO INC.
By:
Name:
Title:
ACCEPTED AS OF THE DATE HEREOF:
HOLDER
_______________________________
Exhibit B
---------
Exhibit A
---------
[To be signed only upon exercise of Warrant]
EXERCISE SUBSCRIPTION FORM
To: ABC-NACO INC.
2001 Butterfield Road
Suite 502
Downers Grove, Illinois 60515
Attn: Secretary
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ______ shares of Common Stock of _____________ and herewith
makes payment of $_____ therefor, and requests that the certificates for such
shares be issued in the name of, and be delivered to ____________, whose address
is _____________.
Dated: _____________
By
Address:
[To be signed only upon transfer of Warrant]
FORM OF ASSIGNMENT AND TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________ the right represented by the within Warrant to purchase the
______ shares of the Common Stock of ____________________ to which the within
Warrant relates, and appoints _____________ attorney to transfer said right on
the books of _____________________ with full power of substitution in the
premises.
Dated: _____________
By
Address:
Exhibit C
---------
748927.1.01 08/10/01 5:58 PM
[NET ISSUE EXERCISE OF WARRANT]
FORM OF NET ISSUE EXERCISE
To: ABC-NACO INC.
2001 Butterfield Road
Suite 502
Downers Grove, Illinois 60515
Attn: Secretary
The undersigned, the holder of the attached Warrant number W ______, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
pursuant to Section 1.4 (Net Issue Exercise) thereof, and requests that the
certificates for such shares be issued in the name of, and be delivered to
____________________________, whose address is _____________________________.
Dated: _____________________ ___________________________________
By: ________________________________
Address:
____________________________________
____________________________________