EXHIBIT 4.6
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO AND
RESTRICTED BY THE TERMS OF THE AMENDED AND RESTATED NOTE AND WARRANT PURCHASE
AGREEMENT, DATED AS OF SEPTEMBER 16, 2005, BY AND AMONG THE PARENT, ITS
SUBSIDIARIES, PATRIOT CAPITAL FUNDING, INC., AS SERVICER, AND THE PURCHASERS
SIGNATORY THERETO, AS THE SAME MAY BE AMENDED.
THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND THE RIGHTS OF
PURCHASER HEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE
SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED
AND RESTATED SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005 (THE
"AMENDED AND RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES, BANK OF
AMERICA, AS THE SENIOR LENDER, AND PATRIOT CAPITAL FUNDING, INC., TO THE
INDEBTEDNESS AND OTHER LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF, THE
LOAN PARTIES UNDER AND PURSUANT TO THE AMENDED AND RESTATED SENIOR CREDIT
AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN). PURCHASER, BY
ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE AMENDED AND RESTATED SUBORDINATION AGREEMENT.
WARRANT
TO PURCHASE COMMON STOCK OF
DOVER SADDLERY, INC.
Issue Date: September 16, 2005 Certificate No. W-1
THIS WARRANT IS TO CERTIFY THAT PATRIOT CAPITAL FUNDING, INC., a Delaware
corporation ("PURCHASER"), is entitled to purchase from DOVER SADDLERY, INC., a
Delaware corporation (the "PARENT"), the number of shares of the Parent's Common
Stock, par value $0.0001 per share ("COMMON STOCK"), as shall be determined in
accordance with the provisions of Section 2 hereof at a price per share of
$0.01, as adjusted from time to time pursuant to Section 4 (the "EXERCISE
PRICE"). Terms used but not defined herein shall have the meanings set forth in
the Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement
of even date herewith, among the Loan Parties, including Parent, Patriot Capital
Funding, Inc., as Servicer, the Purchaser and certain other parties named
therein (the "AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT").
SECTION 1. CERTAIN DEFINITIONS. As used in this Warrant, unless the context
otherwise requires:
"APPRAISED VALUE" means the fair market value of the Subject Securities on
a control premium basis without discount for limitations on voting rights,
minority interests, illiquidity or restrictions on transfer and without increase
in value attributable to provisions in this Warrant, as determined by an
appraisal performed at the expense of Parent by any of (i) Houlihan, Lokey,
Howard & Zukin, (ii) Duff & Phelps or (iii) Williamette Management Associates,
or any successor to such firms, as Parent shall elect, or any other nationally
recognized firm selected by Parent and acceptable to the Warranholders holding a
majority of the shares of Warrant Stock; provided, that such appraiser shall be
directed to determine the value of such Subject Securities as soon as
practicable, but in no event later than forty-five (45) days from the date of
its selection and for such purposes all Convertible Securities shall be deemed
outstanding.
"CONVERTIBLE SECURITIES" means securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
other securities that are convertible or exchangeable for Common Stock.
"FAIR MARKET VALUE" of any security shall mean (i) the Market Price
thereof, if available, or (ii) if the Market Price is not available, the
Appraised Value.
"IPO" means a public offering of shares of Parent's Common Stock pursuant
to an effective registration statement on Form S-1, or successor form, of the
SEC, to be closed prior to March 30, 2006, and pursuant to which the aggregate
gross proceeds to Parent and selling shareholders in the offering are not less
than $20,000,000.
"MARKET PRICE" of any security shall mean the average of the closing prices
of such security's sale on all securities exchanges on which such security may
at the time be listed or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
securities at the end of each day or, if on any day such security is not listed,
the average of the representative bid and asked prices quoted in the NASDAQ
System as of 4:00 p.m., New York time or, if on any day such security is not
quoted in the domestic over-the-counter market as reported by the National
Quotations Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 30 days consisting of the day as of which
"Market Price" is being determined and the 29 consecutive business days prior to
such day. If at any time such security is not listed on any securities exchange
or quoted in the NASDAQ System or over-the-counter market, the "Market Price"
for purposes of the exercise of the Put Option shall be the fair market value
jointly determined by Parent and the Warrantholders holding a majority of the
Warrant Stock; provided, however, that if such parties are unable to reach
agreement within ten (10) business days, then the Market Price shall be deemed
not to be available.
"ORGANIC CHANGE" means reclassification or change of the outstanding
Warrant Stock of the Parent (other than as a result of a subdivision,
combination or stock dividend), any consolidation of the Parent with, or merger
of the Parent into, another corporation or other business organization (other
than a consolidation or merger in which the Parent is the continuing
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corporation and which does not result in any reclassification or change of the
outstanding Warrant Stock of the Parent) or any sale of all or substantially all
of the Parent's assets, which is effected in such a way that holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock.
"PREFERRED STOCK" means the preferred stock, par value $0.0001 per share,
of Parent.
"REGISTRATION EXPENSES" means all expenses incident to Parent's performance
of or compliance with Section 10 of this Warrant in connection with each
Incidental Registration, including, without limitation, all registration,
filing, listing and National Association of Securities Dealers, Inc. fees, all
fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, all messenger and delivery
expenses, any transfer taxes, the fees and expenses of Parent's legal counsel
and independent public accountants, counsel for the Warrantholder participating
in each such registration, and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities; provided, however, that
Registration Expenses shall not include underwriting discounts and commissions.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBJECT SECURITIES" means the Warrant and the Warrant Stock.
"WARRANT" means this Warrant and all additional or new warrants issued upon
division or combination of, or in substitution for, this Warrant. All such
additional or new warrants shall at all times be identical as to terms and
conditions and date, except as to the number of shares of Warrant Stock for
which they may be exercised.
"WARRANTHOLDER" means the Purchaser, as the initial holder of this Warrant,
and its nominees, successors or assigns, including any subsequent holder of this
Warrant to whom it has been legally transferred.
"WARRANT STOCK" means the shares of Common Stock purchasable by the holder
of this Warrant upon the exercise of such Warrant, as determined in accordance
with Section 2 hereof.
SECTION 2. WARRANT STOCK. This Warrant shall be exercisable for 23,503
shares of Common Stock, which is equal to .805% of the Common Stock Deemed
Outstanding as of the date hereof, calculated on a fully-diluted as converted
basis.
SECTION 3. EXERCISE OF WARRANT.
(a) From and after March 31, 2006 but prior to September 16, 2010 (the
"EXPIRATION DATE"), the Purchaser may at any time and from time to time exercise
this Warrant, in whole or in part.
(b) (i) The Warrantholder shall exercise this Warrant by means of
delivering to the Parent at its office identified in Section 10.6 of the Amended
and Restated Note
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and Warrant Purchase Agreement (1) a written notice of exercise, including the
number of shares of Warrant Stock to be delivered pursuant to such exercise, (2)
this Warrant and (3) payment equal to the Exercise Price in accordance with
Section 3(b)(ii). In the event that any exercise shall not be for all shares of
Warrant Stock purchasable hereunder, a new Warrant registered in the name of the
Warrantholder, of like tenor to this Warrant and for the remaining shares of
Warrant Stock purchasable hereunder, shall be delivered to the Warrantholder
within five (5) days of any such exercise. Such notice of exercise shall be in
the Subscription Form set out at the end of this Warrant.
(ii) The Warrantholder may elect to pay the Exercise Price to the
Parent either (1) by cash, certified check or wire transfer, (2) by converting
the Warrant into Warrant Stock ("CASHLESS EXERCISE") or (3) any combination of
the foregoing, and specifying such election(s) in the Subscription Form attached
hereto as Exhibit A (the "Subscription Form"). If the Warrantholder elects to
pay the Exercise Price through Cashless Exercise, upon the exercise hereof the
Warrantholder shall specify in the Subscription Form that the Parent is
authorized to withhold from issuance a number of shares of Warrant Stock which,
when multiplied by the fair market value (as determined in good faith by the
Board of Directors of the Parent and agreed to by the Warrantholder) per share
of the Warrant Stock, is equal to the aggregate Exercise Price (and such
withheld shares shall no longer be issuable under this Warrant).
(c) Upon exercise of this Warrant and delivery of the Subscription
Form with proper payment relating thereto, the Parent shall cause to be executed
and delivered to the Warrantholder a certificate or certificates representing
the aggregate number of fully paid and nonassessable shares of Warrant Stock
issuable upon such exercise.
(d) The stock certificate or certificates for Warrant Stock to be
delivered in accordance with this Section 3 shall be in such denominations as
may be specified in said notice of exercise and shall be registered in the name
of the Warrantholder or such other name or names as shall be designated in said
notice. Such certificate or certificates shall be deemed to have been issued and
the Warrantholder or any other person so designated to be named therein shall be
deemed to have become the holder of record of such shares, including to the
extent permitted by law the right to vote such shares or to consent or to
receive notice as a stockholder of the Parent, as of the time said notice is
delivered to the Parent as aforesaid.
(e) The Parent shall pay all expenses payable in connection with the
preparation, issue and delivery of stock certificates under this Section 3,
including any transfer taxes resulting from the exercise of the Warrant and the
issuance of Warrant Stock hereunder.
(f) All shares of Warrant Stock issuable upon the exercise of this
Warrant in accordance with the terms hereof shall be validly issued, fully paid
and nonassessable, and free from all liens and other encumbrances thereon, other
than liens or other encumbrances created by the Warrantholder.
(g) In no event shall any fractional share of Warrant Stock of the
Parent be issued upon any exercise of this Warrant. If, upon any exercise of
this Warrant, the Warrantholder would, except as provided in this paragraph, be
entitled to receive a fractional
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share of Warrant Stock, then the Parent shall deliver in cash to such holder an
amount equal to the fair market value of such fractional interest (as determined
in good faith by the Parent's Board of Directors).
SECTION 4. ADJUSTMENT OF NUMBER OF SHARES AND EXERCISE PRICE. In order to
prevent dilution of the rights granted under this Warrant, the number of shares
of Warrant Stock obtainable upon exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 4.
(a) Subdivision or Combination.
(i) Effect on Exercise Price. If, at any time prior to the
Expiration Date, the number of outstanding shares of Warrant Stock is (i)
increased by a stock dividend payable in shares of Warrant Stock or by a
subdivision or split-up of shares of Warrant Stock or (ii) decreased by a
combination of shares of Warrant Stock, then, following the record date fixed
for the determination of holders of Warrant Stock entitled to receive the
benefits of such stock dividend, subdivision, split-up, or combination, the
Exercise Price shall be adjusted to a new amount equal to the product of (I) the
Exercise Price in effect on such record date and (II) the quotient obtained by
dividing (x) the number of shares of Warrant Stock outstanding on such record
date (without giving effect to the event referred to in the foregoing clause (i)
or (ii)), by (y) the number of shares of Warrant Stock which would be
outstanding immediately after the event referred to in the foregoing clause (i)
or (ii), if such event had occurred immediately following such record date.
(ii) Effect on Number of Shares. Upon each adjustment of the
Exercise Price as provided in this Section 4(a), the Warrantholder shall
thereafter be entitled to subscribe for and purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Warrant Stock equal to
the product of (i) the number of shares of Warrant Stock existing prior to such
adjustment and (ii) the quotient obtained by dividing (I) the Exercise Price
existing prior to such adjustment by (II) the new Exercise Price resulting from
such adjustment.
(b) Division or Combination upon Request. This Warrant may be divided
or combined with other Warrants upon presentation at the aforesaid office of the
Parent, together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the Warrantholder or its agent or
attorney. The Parent shall pay all expenses in connection with the preparation,
issue and delivery of Warrants under this Section 4(b), including any transfer
taxes resulting from the division or combination hereunder. The Parent agrees to
maintain at its aforesaid office books for the registration of the Warrants.
(c) Reclassification, Etc. In case of any Organic Change at any time
prior to the Expiration Date, then, as a condition of such Organic Change,
lawful provision shall be made, and duly executed documents evidencing the same
from the Parent or its successor shall be delivered to the Warrantholder, so
that the Warrantholder shall have the right prior to the Expiration Date to
purchase, at a total price not to exceed that payable upon the exercise of this
Warrant, the kind and amount of shares of stock and other securities and
property receivable upon such Organic Change by a holder of the number of shares
of Warrant Stock of the Parent which might have been purchased by the
Warrantholder immediately prior to such Organic
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Change, in any such case appropriate provisions shall be made with respect to
the rights and interest of the Warrantholder to the end that the provisions
hereof (including provisions for the adjustment of the Exercise Price and of the
number of shares purchasable upon exercise of this Warrant) shall thereafter be
applicable in relation to any shares of stock and other securities and property
thereafter deliverable upon exercise hereof.
(d) Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 4 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Parent's board of directors shall make an appropriate adjustment in the number
of shares of Warrant Stock obtainable upon exercise of this Warrant and in the
Exercise Price so as to protect the rights of the holders of the Warrants;
provided that no such adjustment shall decrease the number of shares of Warrant
Stock obtainable as otherwise determined pursuant to this Section 4.
(e) No Avoidance. In the event that the Parent shall enter into any
transaction for the purpose of avoiding the application of the provisions of
this Section 4, the benefits provided by such provisions shall nevertheless
apply and be preserved.
(f) Rounding. All calculations under this Section 4 shall be made to
the nearest fourth decimal place.
SECTION 5. [INTENTIONALLY OMITTED].
SECTION 6. CERTIFICATES AND NOTICES.
(a) Certificates. Upon the occurrence of any event requiring
adjustments of the number of shares subject to this Warrant pursuant to Section
4, the Parent shall mail to the Warrantholder (by registered or certified mail,
postage prepaid) a certificate signed by the President or a Vice President and
by the Treasurer or an Assistant Treasurer of the Parent, setting forth in
reasonable detail the events requiring the adjustment and the method by which
such proposed adjustment was calculated, specifying the adjusted number of
shares subject to this Warrant after giving effect to the proposed adjustment
and the number of shares of Warrant Stock to be issued pursuant to Section 4
hereof.
(b) Notices.
(i) Immediately upon any adjustment of the number of shares of
Warrant Stock acquirable upon exercise of this Warrant, the Parent shall give
written notice thereof to the Warrantholder, setting forth in reasonable detail
and certifying the calculation of such adjustment.
(ii) If the Parent after the date hereof shall propose to: (i)
pay any dividend payable in cash or stock to the holders of Common Stock or to
make any other distribution to the holders of Common Stock or any extraordinary
dividend directly or indirectly attributable to proceeds from the sale or other
disposition of a significant business or asset of the Parent; (ii) offer to the
holders of Common Stock rights to subscribe for or purchase any additional
shares of any class of stock or any other rights or options; (iii) effect any
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reclassification except the subdivision or combination of shares of outstanding
Common Stock; (iv) effect any Organic Change or the liquidation, dissolution or
winding up of the Parent; or (v) engage in any diluting event not otherwise
mentioned in this Section 6(b), then, in each such case, the Parent shall mail
(by registered or certified mail, postage prepaid) to the Warrantholder notice
of such proposed action, which shall specify the date on which the books of the
Parent shall close, or a record date shall be established, for determining
holders of Common Stock entitled to receive such stock dividends or other
distribution of such rights or options, or the date on which such Organic
Change, liquidation, dissolution or winding up shall take place or commence, as
the case may be, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to receive securities or other property
deliverable upon such action, if any such date is to be fixed. Such notice shall
be mailed, in the case of any action covered by clauses (i), (ii) or (v) above,
at least 10 days prior to the record date for determining holders of Common
Stock for purposes of receiving such payment or offer, and, in the case of any
action covered by clause (iii) above, at least 10 days prior to the date upon
which such action takes place, and, in the case of any action covered by clause
(iv) above, at least 30 days prior to the date upon which such action takes
place and at least 20 days prior to the date on which the Parent closes its
books or takes a record for determining rights to vote with respect to any event
covered by clause (iv) and 30 days prior to any record date to determine holders
of Common Stock entitled to receive such securities or other property.
(c) Failure and Defects. Failure to file any certificate or notice or
to mail any notice, or any defect in any certificate or notice, pursuant to this
Section 6, shall not affect the legality or validity of the adjustment of the
Exercise Price and/or number of shares of Warrant Stock subject to this Warrant
pursuant to Section 4.
SECTION 7. RESERVATION AND AUTHORIZATION OF CAPITAL STOCK. The Parent shall
have reserved and made available for issuance such number of its authorized but
unissued shares of Warrant Stock as will be sufficient to permit the exercise in
full of all outstanding Warrants at any time on or prior to the Expiration Date.
SECTION 8. STOCK AND WARRANT BOOKS. The Parent will not at any time, except
upon dissolution, liquidation or winding up, close its stock books or Warrant
books so as to result in preventing or delaying the exercise of any Warrant.
SECTION 9. LIMITATION OF LIABILITY. No provisions hereof, in the absence of
affirmative action by the Warrantholder to purchase Warrant Stock hereunder,
shall give rise to any liability of the Warrantholder to pay the Exercise Price
or as a stockholder of the Parent (whether such liability is asserted by the
Parent or creditors of the Parent).
SECTION 10. REGISTRATION RIGHTS.
(a) Incidental Registration. If Parent for itself or any of its
security holders shall at any time or times after the date hereof undertake to
register under the Securities Act any shares of its capital stock or other
securities (other than (i) the registration of an offer, sale or other
disposition of securities solely to employees of, or other Persons providing
services to, Parent, or any Subsidiary pursuant to an employee or similar
benefit plan registered on Form S-8 or similar or successor forms promulgated by
the SEC or (ii) relating to a merger, acquisition or
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other transaction of the type described in Rule 145 under the Securities Act or
a comparable or successor rule, registered on Form S-4 or similar or successor
forms promulgated by the SEC), on each such occasion Parent will notify
Warrantholder of such determination or request at least thirty (30) days prior
to the filing of such registration statement, and upon the request of
Warrantholder given in writing within twenty (20) days after the receipt of such
notice, Parent shall use its best efforts as soon as practicable thereafter to
cause any of the Warrant Stock issuable upon the exercise of this Warrant
specified by Warrantholder to be included in such registration statement,
subject to the conditions of the Securities Act (an "INCIDENTAL REGISTRATION").
Notwithstanding anything to the contrary, it is the intention of the parties
that the registration rights set forth in this Section 10 shall not be available
to the Warrantholders in connection with the registration of Parent filed on
Form S-1 with the SEC on August 26, 2005, as the same may be amended from time
to time (File Number 333-127888). Any exercise of this Warrant specified by a
Warrantholder to be included in any registration statement shall be contingent
upon the effectiveness of such registration statement with the SEC. If
Warrantholder decides not to include all of the Warrant Stock issuable upon the
exercise of this Warrant in any Incidental Registration filed by Parent,
Warrantholder shall nevertheless continue to have the right to include any
Warrant Stock issuable upon the exercise of this Warrant in any subsequent
Incidental Registration as may be filed by Parent with respect to offerings of
its securities, all upon the terms and conditions set forth herein.
(b) Priority in Registration. If an Incidental Registration is an
underwritten offering, and the managing underwriters shall give written advice
to the Warrantholder and the Parent that, in their opinion, market conditions
dictate that no more than a specified maximum number of securities (the
"UNDERWRITER'S MAXIMUM NUMBER") could successfully be included in such
registration, then the Parent shall be required only to include in such
registration only such number of securities as is equal to the Underwriter's
Maximum Number ("Incidental Registration Cutback") and the Parent and the
Warrantholder will participate in such offering in the following order of
priority:
(i) First, the Parent shall be entitled to include in such
registration that number of securities that the Parent proposes to offer and
sell for its own account in such registration and that does not exceed the
Underwriter's Maximum Number; and
(ii) Second, the Parent will be obligated and required to include
in such registration that number of shares of Warrant Stock of Warrantholder
along with other securities of the Parent that shall have been requested by
other parties having registration rights pursuant to one or more other
registration rights agreements with the Parent that does not exceed the
remaining portion of the Underwriter's Maximum Number.
In the event that an Incidental Registration Cutback results in less
than all of the securities of a particular category (e.g., securities of the
Parent) that are requested to be included in such registration to actually be
included in such registration, then the number of securities of such category
that will be included in such registration shall be shared pro rata among all of
the holders of securities of such category that were requested to be included in
such registration based on the number of shares of Common Stock held by each
such holder of securities of such category, calculated on an as converted to
Common Stock basis.
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(c) Registration Expenses. Parent shall pay all Registration Expenses
incurred in connection with all Incidental Registrations effected in accordance
with this Section 10.
(d) Lock-Up. Subject to the conditions set forth in the last sentence
of this Section 10(d), in connection with any underwritten public offering of
Warrant Stock under the Securities Act, Warrantholder agrees that it shall, if
so requested by the managing underwriter, enter into a lockup agreement (the
"LOCKUP AGREEMENT"), with respect to all Warrant Stock issuable hereunder, in
form and substance as executed by the Parent's senior management and significant
shareholders. Notwithstanding the foregoing, the Warrantholder shall not be
required to execute a Lockup Agreement with respect to a higher percentage of
its aggregate holdings of Warrant Stock issuable hereunder than the lowest
percentage of individual holdings of capital stock of the Parent held by any of
Parent's senior management or significant shareholders that is subject to a
Lockup Agreement. If such restrictions are waived or shortened by the managing
underwriter or the Parent or other party bound thereto, the above restrictions
shall also be waived or shortened for Warrantholder in the same manner on a pro
rata basis (calculated including the shares held by the party bound by such
similar agreement).
SECTION 11 COVENANTS OF PARENT.
(a) Prohibition of Issuances of Preferred Stock. Commencing on the
date hereof and until the earlier to occur of (i) March 31, 2007 and (ii) full
exercise of this Warrant for all Warrant Stock issuable hereunder, without the
prior written consent of Warrantholder, Parent covenants and agrees that it
shall not authorize or increase, or permit any Subsidiary to authorize or
increase, the authorized number of shares of, or issue additional shares of
Preferred Stock, or any class or series of Parent's or any Subsidiary's capital
stock or options, warrants or other rights to acquire any such capital stock
ranking with respect to liquidation preference, dividends or redemption rights,
senior in right to, or on a parity with, the Preferred Stock.
(b) Put Obligation.
(i) Put Option. Parent hereby grants to each Warrantholder an
option to sell to Parent, and Parent is and shall be obligated to purchase from
such Warrantholder under such option (the "PUT OPTION"), all (but not less than
all) of the Subject Securities of such Warrantholder. The Put Option shall be
effective at any time after March 31, 2007 and shall be exercisable by the
Warrantholders holding a majority of the shares of Warrant Stock.
(ii) Put Price. Upon exercise of the Put Option, the price to be
paid to such exercising Warrantholder (the "PUT PRICE") shall be the product of
the amount determined by multiplying (x) the number of shares of Subject
Securities (or, in the case of any Warrant, the number of shares of Warrant
Stock into which such Warrant is convertible) (collectively, the "PUT SHARES")
held by such Warrantholder by (y) the Fair Market Price thereof (less, in the
case of a Warrant, the aggregate exercise price thereof).
(iii) Exercise of Put Option. If Warrantholders holding a
majority of the shares of Warrant Stock elect to exercise the Put Option, they
shall give notice to Parent and Parent shall promptly give notice (the "PUT
NOTICE") to each other Warrantholder, specifying,
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among other things, the date on which the closing of the purchase and sale of
the Put Shares shall occur (the "PUT OPTION CLOSING").
(iv) Put Option Closing. The Put Option Closing shall occur on
the later of the date specified in the Put Notice and the ninetieth (90th) day
after the date of final determination of the Fair Market Value in accordance
with the definition hereof (or, if not a business day, the next following
business day). At the Put Option Closing, the Warrantholders exercising the Put
Option shall deliver the Warrant and/or certificate or certificates evidencing
the Put Shares, duly endorsed in blank. In consideration thereof, Parent shall
deliver to each Warrantholder exercising the Put Option the Put Price for such
holder's Put Shares, payable by wire transfer of immediately available funds to
an account designated by such holder. In the event there is insufficient cash
available to pay each holder the Put Price payable to such holder pursuant to
the preceding sentence, any payment of cash shall be made on a pro rata basis
among such holders in proportion to their respective ownership of Put Shares.
(c) Rule 144 Sales. At any such time as the Parent is required to file
reports under the Securities Exchange Act of 1934, as amended, the Parent shall
comply with all reporting requirements set forth or referred to in Rule 144
promulgated under the Securities Act (or any successor rule thereto) and shall
do all such other things as may be reasonably necessary to permit the sale at
any time of any Warrants or Warrant Stock by a Warrantholder in accordance with
and to the extent permitted by said Rule 144 or any other similar rule or rules
promulgated by the SEC from time to time.
(d) Termination of Covenants under Sections 11(a) and 11(b). The
covenants of the Parent set forth in Sections 11(a) and 11(b) shall terminate
and be of no further force and effect upon the closing of the IPO.
SECTION 12. TRANSFER. Subject to compliance with the Securities Act and the
applicable rules and regulations promulgated thereunder, this Warrant and all
rights hereunder shall be transferable in whole or in part. Any such transfer
shall be made at the office or agency of the Parent at which this Warrant is
exercisable, by the registered holder hereof in person or by its duly authorized
attorney, upon surrender of this Warrant together with the assignment hereof
properly endorsed, and promptly thereafter a new warrant shall be issued and
delivered by the Parent, registered in the name of the assignee. Until
registration of transfer hereof on the books of the Parent, the Parent may treat
the Purchaser as the owner hereof for all purposes.
SECTION 13. INVESTMENT REPRESENTATIONS; RESTRICTIONS ON TRANSFER OF WARRANT
STOCK. Unless a current registration statement under the Securities Act shall be
in effect with respect to the Warrant Stock to be issued upon exercise of this
Warrant, the Warrantholder, by accepting this Warrant, covenants and agrees
that, at the time of exercise hereof, and at the time of any proposed transfer
of Warrant Stock acquired upon exercise hereof, such Warrantholder will deliver
to the Parent a written statement that the securities acquired by the
Warrantholder upon exercise hereof are for the account of the Warrantholder or
are being held by the Warrantholder as trustee, investment manager, investment
advisor or as any other fiduciary for the account of the beneficial owner or
owners for investment and are not acquired with a view to, or for sale in
connection with, any distribution thereof (or any portion thereof) and with no
present intention (at any such time) of offering and distributing such
securities (or any portion thereof).
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SECTION 14. LOSS, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt of
evidence satisfactory to the Parent of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity and/or security satisfactory to the
Parent or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Parent will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of shares of Warrant Stock.
SECTION 15. AMENDMENTS. The terms of this Warrant may be amended, and the
observance of any term herein may be waived, but only with the written consent
of the Parent and the Warrantholder.
SECTION 16. NOTICES GENERALLY. Any notice, request, consent, other
communication or delivery shall be made in accordance with Section 10.6 of the
Amended and Restated Note and Warrant Purchase Agreement.
SECTION 17. SUCCESSORS AND ASSIGNS. This Warrant shall bind and inure to
the benefit of and be enforceable by the parties hereto and their respective
permitted successors and assigns.
SECTION 18. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
[SIGNATURE PAGE FOLLOWS]
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WARRANT SIGNATURE PAGE
IN WITNESS WHEREOF, the Parent has caused this Warrant to be signed in its
name by its President.
Dated: September 16, 2005
DOVER SADDLERY, INC.
By: /s/ Stephen L. Day
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Name: Stephen L. Day
Title: President
EXHIBIT A
SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)
To: ____________________________________
[Choose one or both of the paragraphs, as applicable]
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ____), hereby irrevocably elects to purchase ___________ shares of
the Warrant Stock covered by such Warrant and herewith makes payment of
$_________, representing the full purchase price for such shares at the price
per share provided for in such Warrant.
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ____), hereby irrevocably elects to exercise the right of cashless
exercise represented by the attached Warrant for _____ shares of Warrant Stock,
and as payment therefor hereby directs ________________________ to withhold
_____ shares of Warrant Stock that the undersigned would otherwise be entitled
thereunder.
Dated: Name:
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Signature:
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Address:
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