EXHIBIT 10.8
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR
QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE
WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION.
WARRANT NO. LL-1 November 24, 1999
OVERHILL FARMS, INC.
WARRANT TO PURCHASE 166.04 SHARES OF COMMON STOCK
FOR VALUE RECEIVED, OVERHILL FARMS, INC., a Nevada corporation (the
"Company"), hereby certifies that Levine Leichtman Capital Partners II, L.P., a
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California limited partnership, or its assigns (the "Holder"), is entitled to
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purchase, on the terms and subject to the conditions contained herein, 166.04
shares (the "Warrant Shares") of the Company's common stock, $.01 par value per
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share ("Common Stock"), at the exercise price of $.01 per Warrant Share (the
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"Warrant Purchase Price") at any time and from time to time during the Exercise
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Period (as such term is defined below). The number of Warrant Shares and the
Warrant Purchase Price are subject to adjustment as provided in Section 3. This
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Warrant is being issued in connection with the consummation of the transactions
contemplated by the Securities Purchase Agreement dated of even date herewith
among the Company, the initial Holder, Polyphase Corporation, a Nevada
corporation, and Overhill L. C. Ventures, Inc., a California corporation (as it
may be amended, supplemented or otherwise modified and in effect from time to
time, the "Securities Purchase Agreement").
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This Warrant is subject to the following terms and conditions:
1. DEFINITIONS. Unless otherwise indicated in this Warrant, capitalized
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terms used and not otherwise defined in this Warrant have the meanings set forth
in the Securities Purchase Agreement. In addition, the following capitalized
terms have the following meanings:
"Common Stock" has the meaning set forth in the preamble.
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"Company" has the meaning set forth in the preamble.
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"Convertible Securities" means, when used in this Agreement, any
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securities or other obligations issued or issuable by the Company or any
other Person that are exercisable or exchangeable for, or convertible into,
any Capital Stock of the Company.
"Current Market Price" per share of Common Stock means, as of any
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specified date on which the Common Stock is publicly traded, the average of
the daily market prices of the Common Stock over the twenty (20)
consecutive trading days immediately preceding (and not including) such
date. The 'daily market price' for each such trading day shall be (i) the
closing sales price on such day on the principal securities exchange on
which the Common Stock is then listed or admitted to trading or on Nasdaq,
as applicable, (ii) if no sale takes place on such day on any such
securities exchange or system, the average of the closing bid and asked
prices, regular way, on such day for the Common Stock as officially quoted
on any such securities exchange or system, (iii) if the Common Stock is not
then listed or admitted to trading on any securities exchange or system,
the last reported sale price, regular way, on such day for the Common
Stock, or if no sale takes place on such day, the average of the closing
bid and asked prices for the Common Stock on such day, as reported by
Nasdaq or the National Quotation Bureau, and (iv) if the Common Stock is
not then listed or admitted to trading on any securities exchange and if no
such reported sale price or bid and asked prices are available, the average
of the reported high bid and low asked prices on such day, as reported by a
reputable quotation service, or a newspaper of general circulation in the
City of Los Angeles, State of California, customarily published on each
Business Day. If the daily market price cannot be determined for the twenty
(20) consecutive trading days immediately preceding such date in the manner
specified in the foregoing sentence, then the Common Stock shall not be
deemed to be publicly traded as of such date.
"Designated Office" has the meaning set forth in Section 2.1.
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"DOJ" has the meaning set forth in Section 2.3.
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"Effective Date" means the issue date of this Warrant.
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"Excluded Shares" means, collectively, (i) shares of Common Stock or
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Option Rights issued in any of the transactions described in Sections 4.1,
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4.2, 4.3 or 4.5, (ii) shares of Common Stock issued after the date hereof
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upon exercise, exchange or conversion of (A) Option Rights outstanding on
the date hereof or (B) Option Rights issued after the date hereof for which
an adjustment was made pursuant to Section 4.4
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or for which no adjustment is required under Section 4.4, (iii) the
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issuance of this Warrant or any Warrant Shares and (iv) shares of Common
Stock issued pursuant to a bona fide public offering pursuant to an
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effective registration statement declared effective by the Commission under
the Securities Act.
"Exercise Notice" has the meaning set forth in Section 2.1.
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"Exercise Period" means the period commencing on the Effective Date
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and ending on (and including) the Expiration Date.
"Expiration Date" means October 31, 2009.
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"Fair Market Value" with respect to the Warrant Shares means, as of
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any specified date:
(i) if the Common Stock is publicly traded on such date, the
Current Market Price per share; or
(ii) if the Common Stock is not publicly traded (or deemed not to
be publicly traded) on such date, the fair market value per share of
Common Stock as determined by an independent valuation of the Company,
its Subsidiaries and their respective businesses conducted by an
investment banking or accounting firm of recognized national standing
selected by the mutual written agreement of the Company and the
Holder; provided, however, that if the Company and the Holder are
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unable to mutually agree on any such investment banking or accounting
firm within ten (10) days after the date upon which the right or
obligation to select an investment banking or accounting firm arises,
each of the Holder and the Company shall, within three (3) Business
Days thereafter, select one investment banking or accounting firm, and
the two (2) selected firms shall, within three (3) Business Days of
their selection, select a third investment banking or accounting firm
which shall make the relevant determination (which determination shall
be final and binding) within ten (10) Business Days of the submission
of this matter to such third firm; and provided further, however that,
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in determining the fair market value per share of Common Stock, such
investment banking or accounting firm shall not give effect or take
into account any "minority discount" but shall value the Company in
its entirety on an enterprise basis.
"First Repurchase Option" has the meaning set forth in Section 3.1.
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"First Repurchase Option Exercise Notice" has the meaning set forth in
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Section 3.1.
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"FMV Dispute Notice" has the meaning set forth in Section 3.2.
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"FTC" has the meaning set forth in Section 2.3.
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"Holder" has the meaning set forth in the preamble.
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"HSR Act" has the meaning set forth in Section 2.3.
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"Option Rights" means, when used in this Warrant, any warrants,
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options or other rights to subscribe for or purchase, or obligations to
issue, any Capital Stock of the Company, or any Convertible Securities,
including, without limitation, any options or similar rights issued or
issuable under any employee stock option plan, pension plan or other
employee benefit plan of the Company.
"Other Property" has the meaning set forth in Section 4.5.
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"Repurchase Alternative Payment" has the meaning set forth in Section
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3.2.
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"Second Repurchase Option Effective Date" shall mean the earlier to
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occur of (i) the Maturity Date (as such term is defined in the Note) and
(ii) the date that all principal of, premium, if any, and accrued and
unpaid interest on the Note shall have been paid in full.
"Second Repurchase Option" has the meaning set forth in Section 3.2.
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"Second Repurchase Option Exercise Notice" has the meaning set forth
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in Section 3.2.
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"Second Repurchase Option Price" has the meaning set forth in Section
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3.2.
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"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations promulgated by the SEC thereunder, all as the same
shall be in effect at the time.
"Securities Purchase Agreement" has the meaning set forth in the
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preamble of this Warrant.
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"Warrant Purchase Price" has the meaning set forth in the preamble of
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this Warrant (as adjusted in accordance with the terms of this Warrant).
"Warrant" means this Warrant, any amendment or other modification of
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this Warrant, and any warrants issued upon transfer, division or
combination of, or in substitution for, this Warrant or any other such
warrant. All such Warrants shall at all times be identical as to terms and
conditions and date, except as to the number of Warrant Shares for which
they may be exercised.
"Warrant Shares" has the meaning set forth in the preamble.
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2. EXERCISE.
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2.1 Exercise; Delivery of Certificates. Subject to the provisions of
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Section 2.3, this Warrant may be exercised at the option of the Holder, in whole
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or in part, at any time and from time to time during the Exercise Period, by (a)
delivering to the Company at its principal executive office (the "Designated
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Office") (i) a notice of exercise, in substantially the form attached hereto
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(the "Exercise Notice"), duly completed and signed by the Holder, and (ii) this
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Warrant, and (b) paying the Warrant Purchase Price pursuant to Section 2.2 for
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the number of Warrant Shares being purchased. The Warrant Shares being
purchased under this Warrant will be deemed to have been issued to the Holder,
as the record owner of such Warrant Shares, as of the close of business on the
date on which payment therefor is made by the Holder pursuant to Section 2.2.
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Stock certificates representing the Warrant Shares so purchased shall be
delivered to the Holder within three (3) Business Days after this Warrant has
been exercised (or, if applicable, after the conditions set forth in Section 2.3
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have been satisfied); provided, however, that in the case of a purchase of less
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than all of the Warrant Shares issuable upon exercise of this Warrant, the
Company shall cancel this Warrant and, within three (3) Business Days after this
Warrant has been surrendered, execute and deliver to the Holder a new Warrant of
like tenor representing the number of unexercised Warrant Shares. Each stock
certificate representing the number of Warrant Shares purchased or purchasable
under this Warrant shall be registered in the name of the Holder or, subject to
compliance with Applicable Law, such other name as shall be designated by the
Holder.
2.2 Payment of Warrant Price. Payment of the Warrant Purchase Price
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may be made, at the option of the Holder, by (i) certified or official bank
check, (ii) wire transfer, (iii) instructing the Company to withhold and cancel
a number of Warrant Shares then issuable upon exercise of this Warrant with
respect to which the excess of the Fair Market Value over the Warrant Purchase
Price for such canceled Warrant Shares is at least equal to the Warrant Purchase
Price for the shares being purchased, (iv) surrender to the Company of shares of
Common Stock previously acquired by the Holder with a Fair Market Value equal to
the Warrant Purchase Price for the shares then being purchased or (v) any
combination of the
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foregoing. The Company shall issue fractional shares of Common Stock upon the
exercise of this Warrant.
2.3 Antitrust Notification. If the Holder determines, in its sole
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judgment upon the advice of counsel, that an exercise of this Warrant pursuant
to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the Company
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shall, within seven (7) Business Days after receiving notice from the Holder of
the applicability of the HSR Act, file with the United States Federal Trade
Commission (the "FTC") and the United States Department of Justice (the "DOJ")
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the notification and report form and any supplemental information required to be
filed by it pursuant to the HSR Act in connection with the exercise of this
Warrant. Any such notification and report form and supplemental information
will be in full compliance with the requirements of the HSR Act. The Company
will furnish to the Holder promptly (but in no event more than two (2) Business
Days) such information and assistance as the Holder may reasonably request in
connection with the preparation of any filing or submission required to be filed
by the Holder under the HSR Act. The Company shall respond promptly after
receiving any inquiries or requests for additional information from the FTC or
the DOJ (and in no event more than three (3) Business Days after receipt of such
inquiry or request). The Company shall keep the Holder apprised periodically
and at the Holder's request of the status of any communications with, and any
inquiries or requests for additional information from, the FTC or the DOJ. The
Company shall bear all filing or other fees required to be paid by the Company
and the Holder (or the "ultimate parent entity" of the Holder, if any) under the
HSR Act or any other Applicable Law in connection with such filings and all
costs and expenses (including, without limitation, attorneys' fees and expenses)
incurred by the Company and the Holder in connection with the preparation of
such filings and responses to inquiries or requests. In the event that this
Section 2.3 is applicable to any exercise of this Warrant, the purchase by the
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Holder of the Warrant Shares subject to the Exercise Notice, and the payment by
the Holder of the Warrant Purchase Price, shall be subject to the expiration or
earlier termination of the waiting period under the HSR Act.
3. RIGHTS TO REPURCHASE WARRANT.
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3.1 Right to Repurchase Prior to Repayment of Note. During the
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period commencing on the Effective Date and ending at the close of business on
the second anniversary of the Effective Date, the Company shall have the right
to repurchase, in whole but not in part (the "First Repurchase Option"), 47.44
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Warrant Shares at a repurchase price equal to $3,000,000. The First Repurchase
Option may be exercised by the Company by furnishing to the Purchaser thirty
(30) days' prior written notice (a "First Repurchase Option Exercise Notice")
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stating its intention to exercise the First Repurchase Option and specifying a
Business Day within thirty (30) days of the date of delivery of the First
Repurchase Option Exercise Notice as the date of repurchase. A First Repurchase
Option Exercise Notice, once
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given in accordance with this Section 3.1, shall be irrevocable. On the
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repurchase date set forth in the First Repurchase Option Exercise Notice, the
Holder shall deliver to the Company this Warrant against (a) payment of
$3,000,000 by wire transfer in immediately available funds to a bank account
designated by the Holder of the repurchase price provided for in this Section
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3.1 and (b) the issuance of a new warrant, in substantially the form of this
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Warrant, evidencing the right to purchase the Warrant Shares not so purchased on
the date of repurchase. Notwithstanding the foregoing, the Company may not
exercise the First Repurchase Option if, at the time of delivery of the First
Repurchase Exercise Notice or on the date of repurchase, a Default or Event of
Default has occurred and is continuing or would occur as a result of the
exercise of the First Repurchase Option (or the payment of the First Repurchase
Option repurchase price).
3.2 Right to Repurchase After Repayment of Note.
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(a) Whether or not the Company exercises the First Repurchase
Option, on the terms and subject to the conditions set forth in this Section
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3.2, the Company shall have the right to repurchase (the "Second Repurchase
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Option") the Warrant Shares held by the Holder at the time of such repurchase,
in whole but not in part, at a repurchase price equal to the Fair Market Value
thereof (the "Second Repurchase Option Price"). If, however, the Company does
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not elect to exercise the Second Repurchase Option pursuant to Section 3.2(b) or
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otherwise notifies the Holder prior to the fifth day immediately following the
Second Repurchase Option Effective Date that it does not intend to exercise the
Second Repurchase Option, the Company shall be deemed to have elected to pay to
the Holder an amount equal to the Repurchase Alternative Payment pursuant to
Section 3.2(c).
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(b) The Second Repurchase Option may be exercised by the Company
only during the five (5) day period immediately following the Second Repurchase
Option Effective Date by furnishing to the Holder a written notice of exercise
(a "Second Repurchase Option Exercise Notice") during such five (5) day period.
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The Second Repurchase Option Exercise Notice shall (i) state that the Company
intends to exercise the Second Repurchase Option, (ii) set forth the
determination by the Board of Directors of the Company of the Fair Market Value
of the Warrant Shares and (iii) specify a Business Day occurring within thirty
(30) days immediately following the Second Repurchase Option Effective Date (or
such later date as may be agreed upon by the Holder in writing) as the closing
date for repurchase. A Second Repurchase Option Exercise Notice, once given,
shall be irrevocable. The Holder may challenge or dispute the determination by
the Board of Directors of the Company of the Fair Market Value of the Warrant
Shares by furnishing a written notice to the Company to such effect (a "FMV
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Dispute Notice"), within five (5) days following the Holder's receipt of the
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Second Repurchase Option Exercise Notice. If the Holder timely delivers a FMV
Dispute Notice to the Company and the Company and the Holder cannot resolve the
dispute between or among themselves, then the Fair Market Value
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of the Warrant Shares shall be determined in accordance with the valuation
procedures set forth in clause (ii) of the definition of Fair Market Value.
If the Holder challenges or disputes the Fair Market Value of the
Warrant Shares, then the closing date of repurchase shall occur within thirty
(30) days after the determination of the Fair Market Value of the Warrant Shares
pursuant to the valuation procedures set forth in clause (ii) of the definition
of Fair Market Value (but not later than seventy (70) days following the date of
the Second Repurchase Option Exercise Notice). If the Holder does not challenge
or dispute the Fair Market Value of the Warrant Shares set forth in the Second
Repurchase Option Exercise Notice, then the closing date for repurchase shall
occur on the date specified in the Second Repurchase Option Exercise Notice. In
either event, at the closing of the repurchase of the Warrant Shares under this
Section 3.2 (which closing shall occur at 9:00 a.m. (Pacific time) on the
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closing date), the Holder shall deliver to the Company at the offices of the
Holder this Warrant (representing the Warrant Shares then held by the Holder)
against payment by the Company of the Second Repurchase Option Price by wire
transfer in immediately available funds to a bank account designated by the
Holder.
(c) If the Company does not timely furnish to the Holder a Second
Repurchase Option Exercise Notice pursuant to Section 3.2(b) or otherwise
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notifies the Holder prior to the fifth day immediately following the Second
Repurchase Option Effective Date that it does not intend to exercise the Second
Repurchase Option, then the Company shall pay to the Holder, no later than 9:00
a.m. (Pacific time) on the sixth (6th) day immediately following the Second
Repurchase Option Effective Date, an amount equal to $500,000 (the "Repurchase
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Alternative Payment"). The Repurchase Alternative Payment shall be made by wire
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transfer in immediately available funds to a bank account designated by the
Holder. The Company acknowledges and agrees that, if the Company elects not to
exercise the Second Repurchase Option and to pay to the Holder the Repurchase
Alternative Payment, the Holder shall not be obligated to surrender this Warrant
or any Warrant Shares, but shall be entitled to retain this Warrant, the Warrant
Shares and all rights and benefits accruing hereunder and thereunder (which
rights and benefits shall not be adversely affected by the transactions
contemplated by this Section 3.2). The Company hereby acknowledges that the
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obligation of the Company to pay the Repurchase Alternative Payment pursuant to
this Section 3.2(c) in lieu of exercising the Second Repurchase Option was
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negotiated freely and voluntarily by it in exchange for substantial and valuable
consideration furnished by the Holder to it and its Affiliates. In particular,
the Company agreed to and accepted this provision in exchange for the surrender
by the Holder of a substantial and essential right that the Company had
previously granted to the Holder, the value of which surrendered right cannot be
easily quantified with certainty. The Company acknowledges and agrees that the
Repurchase Alternative Payment represents fair and reasonable value for the
surrender by the Holder of such right.
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(d) If the Company does not exercise the Second Repurchase Option
pursuant to Section 3.2(b) (regardless of whether it exercised the First
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Repurchase Option) and, at any time thereafter, the Company receives any
proceeds under the key man life insurance policy required to be maintained by
the Company on the life of James Rudis pursuant to Section 1.9A of Annex A, the
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Company shall repurchase from the Holder a number of Warrant Shares then held by
the Holder, if any, equal to (i) fifty percent (50.0%) of the insurance proceeds
so received by the Company, divided by (ii) the Fair Market Value per Warrant
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Share. The Company covenants and agrees to set aside fifty percent (50.0%) of
such insurance proceeds and use such proceeds solely for the purposes set forth
in this Section 3.2(d). The Company shall notify the Holder in writing of its
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entitlement to such insurance proceeds within one (1) day of notification of
such entitlement and shall set forth therein the determination by the Board of
Directors of the Company of the Fair Market Value of the Warrant Shares. At
9:00 a.m. (Pacific time) on the third Business Day following the receipt by the
Company of such insurance proceeds, the Company shall pay to the Holder an
amount equal to fifty percent (50.0%) of such insurance proceeds (by wire
transfer in immediately available funds to a bank account designated by the
Holder) against delivery of this Warrant (representing the Warrant Shares then
held by the Holder), unless the Holder delivers to the Company a FMV Dispute
Notice prior to such time. If the Holder timely delivers a FMV Dispute Notice
to the Company and the Company and the Holder cannot resolve the dispute between
or among themselves, then the Fair Market Value of the Warrant Shares shall be
determined in accordance with the valuation procedures set forth in clause (ii)
of the definition of Fair Market Value and the closing of the repurchase shall
be deferred until the fifth Business Day following the determination of the Fair
Market Value of the Warrant Shares. If the number of Warrant Shares repurchased
by the Company under this Section 3.2(d) is less than the total number of
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Warrant Shares then held by the Holder, the Company shall issue to the Holder at
the same time a new warrant, in substantially the form of this Warrant,
evidencing the number of Warrant Shares not so repurchased.
3.3 Payment of Fees. The Company shall bear all fees, costs and
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expenses incurred by the Company and the Holder in connection with the
determination of the Fair Market Value of this Warrant or the Warrant Shares,
and any challenge or dispute thereof, including, without limitation, all fees
and expenses of any investment banking, valuation or accounting firm(s) engaged
by the Company or the Holder and of attorneys in connection with such
calculation. Notwithstanding the foregoing, the Company and the Holder shall
share equally all such fees, costs and expenses if, after the Holder challenges
or disputes the Fair Market Value of the Warrant Shares set forth in the Second
Repurchase Option Exercise Notice, the difference between (a) the Fair Market
Value of the Warrant Shares determined pursuant to the valuation procedures set
forth in clause (ii) of the definition of Fair Market Value and (b) the Fair
Market Value of the Warrant Shares set forth in the Second Repurchase Option
Exercise Notice, is less than five percent (5.0%) of the Fair Market Value of
the Warrant Shares set forth in the Second Repurchase Option Exercise Notice.
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3.4 No Representations. In no event shall the Holder be obligated to
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make any representations or warranties as to this Warrant or the Warrant Shares
with respect to the transactions contemplated by this Section 3 or this Warrant
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other than with respect to the Holder's organization, good standing and
authority, title to this Warrant, no consents and no conflicts with
organizational documents and material agreements.
4. ADJUSTMENTS TO THE NUMBER OF WARRANT SHARES AND TO THE WARRANT
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PURCHASE PRICE. The number of Warrant Shares for which this Warrant is
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exercisable and the Warrant Purchase Price shall be subject to adjustment from
time to time as set forth in this Section 4.
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4.1 Stock Dividends, Subdivisions and Combinations. If at any time
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the Company:
(a) pays a dividend or other distribution on its Common Stock in
shares of Common Stock or shares of any other class or series of Capital Stock,
(b) subdivides its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(c) combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then the number of Warrant Shares purchasable 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 so that the
Holder shall thereafter be entitled to receive upon exercise of this Warrant the
kind and number of shares of Common Stock that the Holder would have owned or
have been entitled to receive immediately after such record date or effective
date had this Warrant been exercised immediately prior to such record date or
effective date. Any adjustment made pursuant to this Section 4.1 shall become
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effective immediately after the effective date of such event, but be retroactive
to the record date, if any, for such event.
Upon any adjustment of the number of Warrant Shares purchasable upon
the exercise of this Warrant as herein provided, the Warrant Purchase Price per
share shall be adjusted by multiplying the Warrant Purchase Price immediately
prior to such adjustment by a fraction, the numerator of which shall be the
number of Warrant Shares purchasable upon the exercise of this Warrant
immediately prior to such adjustment and the denominator of which shall be the
number of Warrant Shares so purchasable immediately thereafter.
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4.2 Issuance of Option Rights. If at any time the Company issues
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(without payment of any consideration) to all holders of outstanding Common
Stock any Option Rights, then the Company shall also distribute such Option
Rights to the Holder as if this Warrant had been exercised immediately prior to
the record date for such issuance.
4.3 Distribution of Assets or Securities. If at any time the Company
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makes a distribution to its stockholders (other than in connection with the
liquidation, dissolution or winding up of the Company) of any asset (other than
cash) or security other than those referred to in Sections 4.1, 4.2 or 4.5, the
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Warrant Purchase Price shall be adjusted and shall be equal to the Warrant
Purchase Price in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution multiplied by a fraction (which shall not be less than zero), the
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numerator of which shall be the Fair Market Value per share of Common Stock on
the date fixed for such determination, less the then fair market value of the
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portion of the assets, or the fair market value of the portion of the
securities, as the case may be, so distributed applicable to one share of Common
Stock, and the denominator of which shall be the Fair Market Value per share of
Common Stock. Such adjustment to the Warrant Purchase Price shall become
effective immediately prior to the opening of business on the day immediately
following the date fixed for the determination of stockholders entitled to
receive such distribution. Upon any adjustment in the Warrant Purchase Price as
provided in this Section 4.3, the number of shares of Common Stock issuable upon
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the exercise of this Warrant shall also be adjusted and shall be equal to the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment multiplied by a fraction, the numerator of which is the
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Warrant Purchase Price in effect immediately prior to such adjustment and the
denominator of which is the Warrant Purchase Price as so adjusted.
4.4 Issuance of Equity Securities at Less Than Fair Market Value. If
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at any time the Company sells or issues any shares of Common Stock or Option
Rights (excluding the Excluded Shares) at a price per share of Common Stock
(determined in the case of Option Rights by dividing (x) the total amount
receivable by the Company in consideration of the sale and issuance of such
Option Rights, plus the total consideration payable to the Company upon
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exercise, conversion or exchange thereof, by (y) the maximum number of shares of
Common Stock issuable upon conversion, exercise or exchange of such Option
Rights), that is lower than the Fair Market Value per share of Common Stock in
effect immediately prior to such sale and issuance, then the Warrant Purchase
Price shall be adjusted (calculated to the nearest $.001) so that it shall equal
the price determined by multiplying the Warrant Purchase Price in effect
immediately prior thereto by a fraction, the numerator of which shall be an
amount equal to the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such sale and issuance plus (B) the number of shares of
Common Stock which the aggregate consideration received by the Company
(determined as provided below) for such sale or issuance would purchase at such
Fair Market Value per share, and the denominator of which
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shall be the total number of shares of Common Stock outstanding (or deemed to be
outstanding as provided below) immediately after such sale or issuance.
Adjustments shall be made successively whenever such an issuance is made.
For the purposes of such adjustments, the shares of Common Stock which
the holder of any such Option Rights shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the date of the sale
and issuance of such Option Rights and the consideration received by the Company
therefor shall be deemed to be the consideration actually received by the
Company for such Option Rights, plus the consideration or premiums stated in
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such Option Rights to be paid to acquire the shares of Common Stock covered
thereby.
Upon any adjustment in the Warrant Purchase Price as provided in the
penultimate paragraph above, the number of shares of Common Stock purchasable
upon the exercise of this Warrant shall also be adjusted and shall be that
number determined by multiplying the number of Warrant Shares issuable upon
exercise immediately prior to such adjustment by a fraction, the numerator of
which is the Warrant Purchase Price in effect immediately prior to such
adjustment and the denominator of which is the Warrant Purchase Price as so
adjusted.
If at any time the Company sells and issues any shares of Common Stock
or Option Rights containing the right to subscribe for or purchase shares of
Common Stock for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then in determining the "price per share of
Common Stock" and the "consideration received by the Company" for purposes of
the preceding paragraphs of this Section 4.4, the Board of Directors of the
-----------
Company shall determine, in good faith, the fair market value of property,
subject to the Holder's rights under Section 4.8(e). There shall be no
--------------
adjustment of the Warrant Purchase Price in respect of the Common Stock pursuant
to this Section 4.4 if the amount of such adjustment is less than $0.001 per
-----------
share of Common Stock; provided, however, that any adjustments which by reason
-------- -------
of this provision are not required to be made shall be carried forward and taken
into account in any subsequent adjustment.
4.5 Reorganization, Reclassification, Merger, Consolidation or
----------------------------------------------------------
Disposition of Assets. If at any time the Company reorganizes its capital,
- ---------------------
reclassifies its capital stock, consolidates, merges or combines with or into
another Person (where the Company is not the surviving corporation or where
there is any change whatsoever in, or distribution with respect to, the
outstanding Common Stock), or the Company sells, transfers or otherwise disposes
of all or substantially all of its property, assets or business to another
Person, other than in a transaction provided for in Sections 4.1, 4.2, 4.3, 4.4
---------------------------
or 4.6, and, pursuant to the terms of such reorganization, reclassification,
- ------
consolidation, merger, combination, sale, transfer or other disposition of
assets, (i) shares of common stock of the successor or acquiring Person or
12
the Company (if it is the surviving corporation) or (ii) any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring Person or the Company ("Other
-----
Property") are to be received by or distributed to the holders of Common Stock
- --------
who are holders immediately prior to such transaction, then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the number
of shares of Common Stock, common stock of the successor or acquiring Person,
and/or Other Property which holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event would have
owned or received immediately after and as a result of such event. In such
event, the aggregate Warrant Purchase Price otherwise payable for the Warrant
Shares issuable upon exercise of this Warrant shall be allocated among such
securities and Other Property in proportion to the respective fair market values
of such securities and Other Property as determined in good faith by the Board
of Directors of the Company, subject to the Holder's rights under Section
-------
4.8(e).
- ------
In case of any such event, the successor or acquiring Person (if other
than the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities
hereunder, subject to such modifications as the Holder may approve in writing
(and memorialized by resolutions of the Board of Directors of the Company) in
order to provide for adjustments of any shares of common stock of such successor
or acquiring Person for which this Warrant thus becomes exercisable, which
modifications shall be as equivalent as practicable to the adjustments provided
for in this Section 4.5. For purposes of this Section 4, "common stock of the
----------- ---------
successor or acquiring Person" shall include stock or other equity securities,
or securities that are exercisable or exchangeable for or convertible into
equity securities, of such corporation, or other securities if such Person is
not a corporation, of any class that is not preferred as to dividends or assets
over any other class of stock of such corporation or Person and that is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities that are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 4.5 shall similarly apply to successive reorganizations,
- -----------
reclassifications, consolidations, mergers, sales, transfers and other
dispositions of assets.
4.6 Dissolution, Total Liquidation or Winding-Up. If at any time
--------------------------------------------
there is a voluntary or involuntary dissolution, total liquidation or winding-up
of the Company, other than as contemplated by Section 4.5, then the Company
-----------
shall cause to be mailed (by registered or certified mail, return receipt
requested, postage prepaid) to the Holder at the Holder's address as shown on
the Warrant register, at the earliest practicable time (and, in any event, not
less than thirty (30) calendar days before any date set for definitive action)
written notice
13
of the date on which such dissolution, liquidation or winding-up shall take
place, as the case may be. Such notice shall also specify the date as of which
the record holders of shares of Common Stock shall be entitled to exchange their
shares for securities, money or other property deliverable upon such
dissolution, liquidation or winding-up, as the case may be. On such date, the
Holder shall be entitled to receive upon surrender of this Warrant the cash or
other property, less the Warrant Purchase Price for this Warrant then in effect,
----
that the Holder would have been entitled to receive had this Warrant been
exercised immediately prior to such dissolution, liquidation or winding-up. Upon
receipt of the cash or other property, any and all rights of the Holder to
exercise this Warrant shall terminate in their entirety. If the cash or other
property distributable in the dissolution, liquidation or winding-up has a fair
market value which is less than the Warrant Purchase Price for this Warrant then
in effect, this Warrant shall terminate and be of no further force or effect
upon the dissolution, liquidation or winding-up.
4.7 Other Dilutive Events. If any event occurs as to which the other
---------------------
provisions of this Section 4 are not strictly applicable but as to which the
---------
failure to make any adjustment would not protect the purchase rights represented
by this Warrant in accordance with the intent and principles hereof, then, in
each such case, the Holder may appoint on behalf of the Company an investment
banking or accounting firm of recognized national standing which shall give its
opinion as to the adjustment, if any, on a basis consistent with the intent and
principles established herein, necessary to preserve the purchase rights
represented by this Warrant. Upon receipt of such opinion, the Company will
mail (by registered or certified mail, return receipt requested, postage
prepaid) a copy thereof to the Holder within three (3) Business Days and shall
make the adjustments described therein. The fees and expenses of such
investment banking or accounting firm shall be borne by the Company.
4.8 Other Provisions Applicable to Adjustments Under this Section.
-------------------------------------------------------------
The following provisions shall be applicable to the adjustments provided for
pursuant to this Section 4:
---------
(a) When Adjustments To Be Made. The adjustments required by
---------------------------
this Section 4 shall be made whenever and as often as any specified event
---------
requiring such an adjustment shall occur. For the purpose of any such
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(b) Record Date. If the Company fixes a record date of the
-----------
holders of Common Stock for the purpose of entitling them to (i) receive a
dividend or other distribution payable in shares of Common Stock or in shares of
any other class or series of capital stock or securities convertible into or
exchangeable for Common Stock or shares of any other class or series of capital
stock or (ii) subscribe for or purchase shares of Common Stock or such other
shares or securities, then all references in this Section 4 to the date of the
---------
14
issuance or sale of such shares of Common Stock or such other shares or
securities shall be deemed to be references to that record date.
(c) When Adjustment Not Required. If the Company fixes a record
----------------------------
date of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights to which
the provisions of Section 4.1 would apply, but shall, thereafter and before the
-----------
distribution to stockholders, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and annulled.
(d) Notice of Adjustments. Whenever the number of shares of
---------------------
Common Stock for which this Warrant is exercisable or the Warrant Purchase Price
shall be adjusted or recalculated pursuant to this Section 4, the Company shall
immediately prepare a certificate to be executed by the chief financial officer
of the Company setting forth, in reasonable detail, the event requiring the
adjustment or recalculation and the method by which such adjustment or
recalculation was calculated, specifying the number of shares of Common Stock
for which this Warrant is exercisable and (if such adjustment was made pursuant
to Section 4.5) describing the number and kind of any other shares of stock or
-----------
Other Property for which this Warrant is exercisable, and any related change in
the Warrant Purchase Price, after giving effect to such adjustment,
recalculation or change. The Company shall mail (by registered or certified
mail, return receipt requested, postage prepaid) a signed copy of the
certificate to be delivered to the Holder within three (3) Business Days of the
event which caused the adjustment or recalculation. The Company shall keep at
the Designated Office copies of all such certificates and cause them to be
available for inspection at the Designated Office during normal business hours
by the Holder or any prospective transferee of this Warrant designated by the
Holder.
(e) Challenge to Good Faith Determination. Whenever the Board of
-------------------------------------
Directors of the Company is required to make a determination in good faith of
the fair market value of this Warrant or the Warrant Shares under this
Section 4, such determination may be challenged or disputed by the Holder. If
- ---------
the Holder wishes to challenge or dispute any such fair market value
determination, it shall furnish written notice to the Company of its intention
to challenge the same. If the Company and the Holder cannot resolve the dispute
between or among themselves, then such dispute shall be submitted for final
determination to an investment banking or accounting firm pursuant to the
valuation procedures set forth in clause (ii) under the definition of Fair
Market Value. All fees, costs and expenses incurred by the Company and the
Holder in connection with any such determination, and any challenge or dispute
thereof, shall be paid by the Company, or the Company and the Holder, as the
case may be, in accordance with Section 3.3.
-----------
15
(f) Independent Application. Except as otherwise provided
-----------------------
herein, all subsections of this Section 4 are intended to operate independently
---------
of one another (but without duplication). If an event occurs that requires the
application of more than one subsection, all applicable subsections shall be
given independent effect without duplication.
(g) Other Anti-Dilution Provisions. To the extent that Levine
------------------------------
Leichtman Capital Partners II, L.P. or any of its Affiliates (collectively,
"LLCP") continues to hold this Warrant, in whole or in part, at any time at
----
which the Company takes any action which would have resulted in an adjustment to
the exercise price of, and the number of shares of Common Stock issuable
pursuant to, this Warrant (a "Dilutive Issuance"), then, to the extent that LLCP
-----------------
has exercised all or any portion of this Warrant prior to such time, the Company
shall immediately issue to LLCP upon such Dilutive Issuance, without the payment
of any further consideration of any kind, such number of additional shares of
Common Stock as shall equal the difference between (i) the number of shares of
Common Stock issuable upon the exercise of this Warrant to the extent held
unexercised by LLCP at such time after giving effect to the adjustment thereto
resulting from such Dilutive Issuance and (ii) the number of shares of Common
Stock which would have been issuable upon exercise of this Warrant after giving
effect to such Dilutive Issuance if this Warrant had not been exercised in any
part.
5. MISCELLANEOUS.
-------------
5.1 Restrictive Legend. This Warrant and, unless registered under
------------------
the Securities Act, any Warrant Shares issued upon exercise hereof shall be
stamped or imprinted with a legend in substantially the following form (in
addition to any legends required under applicable state securities laws):
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS
OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION AND QUALIFICATION.
The legend shall be appropriately modified upon issuance of
certificates for shares of Common Stock.
16
Upon request of the holder of a Common Stock certificate, the Company
shall issue to that holder a new certificate free of the foregoing legend, if,
with such request, such holder provides the Company with an opinion of counsel
reasonably acceptable to the Company (provided that Riordan & McKinzie, A
--------
Professional Law Corporation, shall be deemed to be acceptable to the Company)
to the effect that the securities evidenced by such certificate may be sold
without restriction under Rule 144 (or any other rule permitting resales of
securities without restriction) promulgated under the Securities Act.
5.2 Holder Entitled to Benefits Under Other Agreements. The Holder
--------------------------------------------------
of this Warrant is entitled to certain rights, benefits and privileges with
respect to this Warrant and the Warrant Shares pursuant to the terms of the
Securities Purchase Agreement, the Registration Rights Agreement (it being
understood that the Warrant Shares constitute "Registrable Securities"
thereunder), the Investor Rights Agreement and certain other Investment
Documents.
5.3 Other Covenants. Without limiting the generality of Section 5.2,
--------------- -----------
the Company covenants and agrees that, as long as this Warrant remains
outstanding or any Warrant Shares are issuable with respect to this Warrant, the
Company will perform all of the following covenants for the express benefit of
the Holder: (a) the Warrant Shares shall, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock; (b) each
Holder shall, upon the exercise thereof in accordance with the terms hereof,
receive good and marketable title to the Warrant Shares, free and clear of all
voting and other trust arrangements to which the Company is a party or by which
it is bound, preemptive rights of any stockholder, liens, encumbrances, equities
and claims whatsoever, including, but not limited to, all Taxes, Liens and other
charges with respect to the issuance thereof; (c) at all times prior to the
Expiration Date, the Company shall have reserved for issuance a sufficient
number of authorized but unissued shares of Common Stock, or other securities or
property for which this Warrant may then be exercisable, to permit this Warrant
(or if this Warrant has been divided, all outstanding Warrants) to be exercised
in full; (d) the Company shall deliver to each Holder the information and
reports described in Section 1.3A of Annex A of the Securities Purchase
------------ -------
Agreement as contemplated therein; (e) the Company shall extend to the Holder
the investment monitoring and other rights set forth in the Investor Rights
Agreement, provided that the rights set forth in Section 1.1 of the Investor
--------
Rights Agreement with respect to Board of Director representation may not be
assigned by LLCP to any assignee of this Warrant without the prior written
consent of the Company; and (f) the Company shall provide each Holder with
notice of all corporate actions in the same manner and to the same extent as the
shareholders of the Company.
5.4 Issue Tax. The issuance of shares of Common Stock upon the
---------
exercise of this Warrant shall be made without charge to the Holder for any
issue tax in respect thereof.
17
5.5 Closing Of Books. The Company will at no time close its transfer
----------------
books against the transfer of this Warrant or of any Warrant Shares in any
manner which interferes with the timely exercise hereof.
5.6 No Voting Rights; Limitation Of Liability. Except as expressly
-----------------------------------------
set forth in this Warrant, nothing contained in this Warrant shall be construed
as conferring upon the Holder (a) the right to vote or consent as a stockholder
in respect of meetings of stockholders for the election of directors of the
Company or any other matter, (b) the right to receive dividends, except as set
forth in Section 4, or (c) any other rights as a stockholder of the Company,
---------
except as set forth in Section 4.2 and Section 4.3 and in the Investor Rights
----------- -----------
Agreement. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of the
Holder for the Warrant Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
5.7 Modification And Waiver. This Warrant and any provision hereof
-----------------------
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement is sought.
5.8 Notices. All notices, requests, demands and other communications
-------
which are required or may be given under this Warrant shall be in writing and
shall be deemed to have been duly given if transmitted by telecopier with
receipt acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of seventy-
two (72) hours after mailing, if mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to the Holder, at:
c/o Levine Leichtman Capital Partners, Inc.
335 North Maple Drive, Suite 240
Beverly Hills, CA 90210
Attention: Arthur E. Levine, President
Telephone: (310) 275-5335
Facsimile: (310) 275-1441
(b) If to any other Holder, at:
such Holder's address as shown on the books of the Company.
18
(c) If to the Company, at:
Overhill Farms, Inc.
5730 Uplander Way, Suite 201
Culver City, CA 90230
Attention: James Rudis
Telephone: (310) 641-3680
Telecopier: (310) 645-3914
with a copy to:
--------------
Freeman, Freeman & Smiley, LLP
3415 Sepulveda Blvd. Suite 1200
Los Angeles, CA 90034
Attention: Ross Arbiter, Esq.
Telephone: (310) 255-6100
Telecopier: (310) 391-4042
or at such other address or addresses as the Holder or the Company, as the case
may be, may specify by written notice given in accordance with this Section 5.8.
-----------
5.9 Successors and Assigns. The Company may not assign any of its
----------------------
rights, or delegate any of its obligations, under this Warrant without the prior
written consent of the Holder (which consent may be withheld for any reason or
no reason at all). Subject to the requirements of Applicable Laws, the Holder
may assign this Warrant, in whole or in part, at any time or from time to time,
without the consent of the Company. Each assignment of this Warrant shall be
registered on the books of the Company to be maintained for such purpose upon
surrender of this Warrant at the Designated Office, together with appropriate
instruments of assignment, duly completed and executed. Upon such surrender,
the Company shall within three (3) Business Days, at its own expense, execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
specified in such assignment and in the denominations specified therein and this
Warrant shall promptly be canceled. If any portion of this Warrant is not being
assigned, the Company shall, at its own expense, within three (3) Business Days
issue to the Holder a new Warrant evidencing the portion not so assigned. If
the Holder assigns this Warrant to one or more Persons, any decisions that the
Holder is entitled to make at any time hereunder shall be made by the Holders
holding more than fifty percent (50.0%) of the aggregate number of Warrant
Shares issuable upon exercise of all of the then exercisable Warrants.
19
This Warrant shall be binding upon and inure to the benefit of the
Company, the Holder and their respective successors and permitted assigns, and
shall include, with respect to the Company, any Person succeeding the Company by
merger, consolidation, combination or acquisition of all or substantially all of
the Company's assets, and in such case, except as expressly provided herein and
in the Securities Purchase Agreement, all of the obligations of the Company
hereunder shall survive such merger, consolidation, combination or acquisition.
5.10 Captions; Construction and Interpretation. The captions in this
-----------------------------------------
Warrant are for convenience of reference only, do not constitute a part of this
Agreement and are not to be considered in construing or interpreting this
Warrant. All section, preamble, recital, exhibit, schedule, disclosure
schedule, annex, clause and party references are to this Warrant unless
otherwise stated. No party, nor its counsel, shall be deemed the drafter of
this Warrant for purposes of construing the provisions of this Warrant, and all
provisions of this Warrant shall be construed in accordance with their fair
meaning, and not strictly for or against any party.
5.11 Lost Warrant or Certificates. Upon receipt of evidence
----------------------------
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant or of a stock certificate evidencing Warrant Shares
and, in the case of any such loss, theft or destruction, upon receipt of an
indemnity reasonably satisfactory to the Company or, in the case of any such
mutilation, upon surrender and cancellation of this Warrant or stock
certificate, the Company shall make and deliver to the Holder, within three (3)
Business Days of receipt by the Company of such documentation, a new Warrant or
stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.
5.12 No Impairment. The Company shall not by any action, including,
-------------
without limitation, amending its charter documents or regulations or through any
reorganization, reclassification, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value (if
any) of any shares of Common Stock receivable upon the exercise of this Warrant
above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, free
and clear of all liens, encumbrances, equities and claims, and (iii) use its
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
20
5.13 Governing Law. In all respects, including all matters of
-------------
construction, validity and performance, this Warrant and the rights and
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of California applicable to contracts
made and performed in the State of California, without regard to principles
thereof regarding conflicts of laws.
5.14 Remedies. If the Company fails to perform, comply with or
--------
observe any covenant or agreement to be performed, complied with or observed by
it under this Warrant, the Holder may proceed to protect and enforce its rights
by suit in equity or action at law, whether for specific performance of any term
contained in this Warrant or for an injunction against the breach of any such
term or in aid of the exercise of any power granted in this Warrant or to
enforce any other legal or equitable right, or to take any one or more of such
actions. The Company agrees to pay all fees, costs, and expenses, including,
without limitation, fees and expenses of attorneys, accountants and other
experts retained by the Holder, and all fees, costs and expenses of appeals,
incurred or expended by the Holder in connection with the enforcement of this
Warrant or the collection of any sums due hereunder, whether or not suit is
commenced. None of the rights, powers or remedies conferred under this Warrant
shall be mutually exclusive, and each right, power or remedy shall be cumulative
and in addition to any other right, power or remedy whether conferred by this
Warrant or now or hereafter available at law, in equity, by statute or
otherwise.
5.15 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
--------------------
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE COMPANY AND THE HOLDER WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
COMPANY AND THE HOLDER DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, AND UNDERSTANDING THEY
ARE WAIVING A CONSTITUTIONAL RIGHT, THE COMPANY AND THE HOLDER (BY ACCEPTANCE
HEREOF) WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
BROUGHT TO RESOLVE ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THE WARRANT SHARES, THIS
WARRANT, THE SECURITIES PURCHASE AGREEMENT AND/OR ANY OTHER INVESTMENT DOCUMENT
OR THE TRANSACTIONS COMPLETED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and
issued by its duly authorized representatives on the date first above written.
21
OVERHILL FARMS, INC., a Nevada corporation
By:______________________________________________
James Rudis
President and Chief Executive Officer
By:_______________________________________________
Richard A. Horvath
Vice President and Chief Financial Officer
22
OVERHILL FARMS, INC.
FORM OF EXERCISE SUBSCRIPTION
-----------------------------
(To be signed only upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise its Warrant to
purchase ___________________________________ (_______) shares of Common Stock
for an aggregate Warrant Purchase Price of _________________________________
Dollars ($______).
[If the Holder has determined upon advice of counsel that compliance with
the HSR Act is required, include the following sentences: "The undersigned has
determined that this exercise is subject to the HSR Act and requests that the
Company file the requisite notification and report form with, and pay all
requisite filing fees to, the FTC and the DOJ as promptly as possible. The
purchase of the shares described above and the payment of the Warrant Purchase
Price are subject to the expiration or earlier termination of the waiting period
under the HSR Act."]
The Warrant Purchase Price to be paid as follows (check as applicable):
___ Certified or official bank check in the amount of $_________;
___ Wire transfer in the amount of $_________;
___ Cancellation of _________________________ Warrant Shares; or
___ Surrender of __________________ shares of Common Stock.
The undersigned hereby requests that [if the Holder has determined upon
advice of counsel that compliance with the HSR Act is required, include the
following phrase: "upon the expiration or earlier termination of the waiting
period under the HSR Act"] a certificate(s) for the shares of Common Stock be
issued in the name of _________________________, and delivered to,
____________________, whose address is __________________________________.
The undersigned represents that it is acquiring such shares of Common Stock
for its own account for investment purposes only and not with a view to or for
sale in connection with any distribution thereof, and, as to the undersigned,
the representations and warranties of the Purchaser set forth in Section 4 of
---------
the Securities Purchase Agreement are true and correct on the date hereof as if
made by the undersigned on this date.
Dated: ________ ____________________________________________________________
Name of the Holder (must conform precisely to the
name specified on the face of the Warrant)
____________________________________________________________
Signature of authorized representative of the Holder
____________________________________________________________
Print or type name of authorized representative
Social Security Number or Employer
Tax Identification Number of the Holder:____________________
Address of the Holder: _____________________________________
_____________________________________
_____________________________________