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EXHIBIT 10.7
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED,
QUALIFIED, APPROVED OR DISAPPROVED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH LAWS AND NEITHER THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE REGULATORY AUTHORITY HAS
PASSED ON OR ENDORSED THE MERITS OF THESE SECURITIES.
WARRANT NO. 2
AMENDED AND RESTATED WARRANT
TO PURCHASE SHARES OF CLASS A COMMON STOCK,
PAR VALUE $.01 PER SHARE,
OF
THE J.H. HEAFNER COMPANY, INC.
THIS IS TO CERTIFY THAT THE 1818 MEZZANINE FUND, L.P. or its
registered assigns (the "Purchaser"), is the owner of one million thirty-four
thousand (1,034,000) Warrants (the "Warrants"), each of which entitles the
registered holder thereof to purchase from THE J.H. HEAFNER COMPANY, INC., a
North Carolina corporation (the "Company"), one fully paid, duly authorized and
nonassessable share of Class A Common Stock, par value $.01 per share, of the
Company (the "Common Stock"), at any time or from time to time on or before 5:00
p.m., New York City time, on May 7, 2007 (subject to earlier expiration in
certain events), at an exercise price of $.01 per share (the "Exercise Price"),
all on the terms and subject to the conditions hereinafter set forth.
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The number of shares of Common Stock issuable upon exercise of
each such Warrant (the "Number Issuable"), which is initially one (1) share, is
subject to adjustment from time to time pursuant to the provisions of Section 2
of this Warrant Certificate.
Capitalized terms used herein but not otherwise defined shall
have the meanings given them in Section 12 hereof or, if not therein defined, in
the Warrantholder Agreement.
Section 1. Exercise of Warrant. Subject to the last paragraph
of this Section 1, the Warrants evidenced hereby may be exercised, in whole or
in part, by the registered holder hereof at any time or from time to time on or
before 5:00 p.m., New York City time, on May 7, 2007, but in any event no later
than the date of the consummation of the earlier to occur of an IPO or a Sale
Transaction upon delivery to the Company at the principal executive office of
the Company in the United States of America, of (a) this Warrant Certificate,
(b) a written notice stating that such holder elects to exercise the Warrants
evidenced hereby in accordance with the provisions of this Section 1 and
specifying the name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued and (c) payment of the
Exercise Price for the shares of Common Stock issuable upon exercise of such
Warrants, which shall be payable (i) in cash or (ii) by a certified or official
bank check payable to the order of the Company (collectively, the "Warrant
Exercise Documentation").
As promptly as practicable, and in any event within five
Business Days after receipt of the Warrant Exercise Documentation, the Company
shall deliver or cause to be delivered (a) certificates representing the number
of validly issued, fully paid and nonassessable shares of Common Stock specified
in the Warrant Exercise Documentation, (b) if applicable, cash in lieu of any
fraction of a share, as hereinafter provided, and (c) if less than the full
number of Warrants evidenced hereby are being exercised, a new Warrant
Certificate or Certificates, of like tenor, for the number of Warrants evidenced
by this Warrant Certificate, less the number of Warrants then being exercised.
Such exercise shall be deemed to have been made at the close of business on the
date of delivery of the Warrant Exercise Documentation so that the Person
entitled to receive shares of Common Stock upon such exercise shall be treated
for all purposes as having become the record holder of such shares of Common
Stock at such time. No such surrender shall be effective to constitute the
person entitled to receive such shares as the record holder thereof while the
transfer books of the Company for the Common Stock are closed for any purpose
(but not for any period in excess of five days); but any such surrender of this
Warrant Certificate for exercise during any period while such books are so
closed shall become effective for exercise immediately upon the reopening of
such books, as if the exercise had been made on the date this Warrant
Certificate was surrendered and for the Number Issuable of Common Stock
specified in the Warrant Exercise Documentation and at the Exercise Price.
The Company shall pay all expenses in connection with, and all
taxes and other governmental charges (other than income taxes of the holder)
that may be imposed in respect of, the issue or delivery of any shares of Common
Stock issuable upon the exercise of the Warrants evidenced hereby. The Company
shall not be required, however, to pay any tax or other charge
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imposed in connection with any transfer involved in the issue of any certificate
for shares of Common Stock in any name other than that of the registered holder
of the Warrants evidenced hereby.
In connection with the exercise of any Warrants evidenced
hereby, no fractions of shares of Common Stock shall be issued, but in lieu
thereof the Company shall pay a cash adjustment in respect of such fractional
interest in an amount equal to such fractional interest multiplied by the
Current Market Price per share of Common Stock on the Business Day which next
precedes the day of exercise. If more than one such Warrant shall be exercised
by the holder thereof at the same time, the number of full shares of Common
Stock issuable on such exercise shall be computed on the basis of the total
number of Warrants so exercised.
Section 2. Adjustments.
(a) Adjustment of Number Issuable. The Number Issuable shall
be subject to adjustment from time to time as follows:
(i) In case the Company shall at any time or from
time to time after the Issue Date:
(A) pay a dividend or make a distribution on
the outstanding shares of Common Stock in capital stock of the
Company;
(B) subdivide the outstanding shares of
Common Stock into a larger number of shares;
(C) combine the outstanding shares of Common
Stock into a smaller number of shares; or
(D) issue any shares of its capital stock in
a reclassification of the Common Stock;
then, and in each such case, the Number Issuable in effect immediately
prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Company) so that the holder of any
Warrant evidenced hereby thereafter exercised shall be entitled to
receive the number of shares of Common Stock or other securities of the
Company which such holder would have owned or had been entitled to
receive upon or by reason of any of the events described above, had
such Warrant been exercised immediately prior to the happening of such
event. An adjustment made pursuant to this clause (i) shall become
effective retroactively (x) in the case of any such dividend or
distribution, to a date immediately following the close of business on
the record date for the determination of holders of shares of Common
Stock entitled to receive such dividend or distribution, or (y) in the
case of any such subdivision, combination or reclassification, to the
close of
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business on the date upon which such corporate action becomes
effective.
(ii) Reserved.
(iii) Reserved.
(iv) Reserved.
(v) Notwithstanding anything herein to the contrary,
no adjustment under this Section 2(a) need be made to the Number
Issuable unless such adjustment would require an increase or decrease
of at least 2% of the Number Issuable then in effect. Any lesser
adjustment shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment, which, together with
any adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 2% of such Number Issuable. Any
adjustment to the Number Issuable carried forward and not theretofore
made shall be made immediately prior to the exercise of any Warrants
pursuant hereto.
(vi) The Company promptly shall deliver to each
registered holder of Warrants at least five Business Days prior to
effecting any transaction which would result in an increase or decrease
in the Number Issuable pursuant to this Section 2 a notice thereof,
together with a certificate, signed by the Chief Executive Officer or
an Executive Vice-President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Company,
setting forth in reasonable detail the event requiring the adjustment
and the method by which such adjustment was calculated and specifying
the increased or decreased Number Issuable then in effect following
such adjustment.
(vii) Notwithstanding anything contrary contained in
this Section 2(a), the Company shall be entitled to make such upward
adjustments in the Number Issuable, in addition to those otherwise
required by this Section 2(a), as the Board of Directors of the Company
in their discretion shall determine to be advisable in order that any
stock dividend, subdivision or combination of shares, distribution of
rights or warrants to purchase stock or securities, or distribution of
securities convertible into or exchangeable for Common Stock, hereafter
made by the Company to its shareholders shall not be taxable; provided,
however, that any such adjustment shall be made, as nearly as
practicable, in a manner which treats all holders of Warrants with
similar protections on an equal basis.
(b) Reorganization, Reclassification, Consolidation, Merger or
Sale of Assets. In case of any capital reorganization or reclassification or
other change of outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another Person (other than a consolidation or
merger in which the Company is the resulting or surviving person and which does
not result in
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any reclassification or change of outstanding Common Stock) (any of the
foregoing, a "Transaction"), the Company, or such successor or purchasing
Person, as the case may be, shall execute and deliver to each holder of the
Warrants evidenced hereby, at least five Business Days prior to effecting any of
the foregoing Transactions, a certificate that the holder of each such Warrant
then outstanding shall have the right thereafter to exercise such Warrant into
the kind and amount of shares of stock or other securities (of the Company or
another issuer) or property or cash receivable upon such Transaction by a holder
of the number of shares of Common Stock into which such Warrant could have been
exercised immediately prior to such Transaction. Such certificate shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 2 and shall contain other terms
identical to the terms hereof. If, in the case of any such Transaction, the
stock, other securities, cash or property receivable thereupon by a holder of
Common Stock includes shares of stock or other securities of a Person other than
the successor or purchasing Persons and other than the Company, which controls
or is controlled by the successor or purchasing Person or which, in connection
with such Transaction, issues stock, securities, other property or cash to
holders of Common Stock, then such certificate also shall be executed by such
Person, and such Person shall, in such certificate, specifically assume the
obligations of such successor or purchasing Person and acknowledge its
obligations to issue such stock, securities, other property or cash to holders
of the Warrants upon exercise thereof as provided above. The provisions of this
Section 2(b) similarly shall apply to successive Transactions.
(c) Special Distributions. If the holder so elects by sending
a Special Notice to the Company, in the event that the Company shall declare a
dividend or make any other distribution (including, without limitation, in cash,
in capital stock (which shall include, without limitation, any options, warrants
or other rights to acquire capital stock of the Company, whether or not pursuant
to a shareholder rights plan, "poison pill" or similar arrangement) or in other
property or assets (including without limitation evidences of indebtedness of
the Company or another issuer or securities of the Company or another issuer))
to holders of Common Stock (a "Special Distribution"), then the Board of
Directors shall set aside the amount of such dividend or distribution that any
holder of Warrants would have been entitled to receive had it exercised such
Warrants prior to the record date for such dividend or distribution. Upon the
exercise of a Warrant evidenced hereby, the holder shall be entitled to receive,
such dividend or distribution that such holder would have received had such
Warrant been exercised immediately prior to the record date for such dividend or
distribution. Prior to any Special Distribution described in this section 2(c),
the Company shall as provided in Section 4 hereof notify each holder (not less
than ten Business Days prior to the occurrence of each Special Distribution) of
its intent to make such Special Distribution and the holder, if it elects to
have such distribution set aside the amount thereof rather than have an
adjustment to the Number Issuable as provided in Section 2(a)(iii), shall notify
the Company by sending a Special Notice prior to the date of any such Special
Distribution.
Section 3. Redemption.
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(a) Company's Right to Require Redemption. The Company shall
not have any right to redeem any of the Warrants evidenced hereby.
Section 4. Notice of Certain Events. In case at any time or
from time to time the Company shall declare any dividend or any other
distribution to the holders of its Common Stock, or shall authorize the granting
to the holders of its Common Stock of rights or warrants to subscribe for or
purchase any additional shares of stock of any class or any other right, or
shall authorize the issuance or sale of any other shares or rights which would
result in an adjustment to the Number Issuable pursuant to Section 2(a)(i) or
would result in a Special Distribution pursuant to Section 2(c) hereof, or there
shall be any capital reorganization or reclassification of the Common Stock of
the Company or consolidation or merger of the Company with or into another
Person, or any sale or other disposition of all or substantially all the assets
of the Company, or there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company, then, in any one or more of such cases
the Company shall mail to each holder of the Warrants evidenced hereby at such
holder's address as it appears on the transfer books of the Company, as promptly
as practicable but in any event at least 20 days prior to the applicable date
hereinafter specified, a notice stating (a) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or warrants or, if
a record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined or (b) the date on which such reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up is expected to
become effective; provided that in the case of any event to which Section 2(b)
applies, the Company shall give at least ten Business Days' prior written notice
as aforesaid. Such notice also shall specify the date as of which it is expected
that the holders of Common Stock of record shall be entitled to exchange their
Common Stock for shares of stock or other securities or property or cash
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up.
Section 5. Certain Covenants. The Company covenants and agrees
that all shares of capital stock of the Company which may be issued upon the
exercise of the Warrants evidenced hereby will be duly authorized, validly
issued and fully paid and nonassessable. The Company shall at all times reserve
and keep available for issuance upon the exercise of the Warrants, such number
of its authorized but unissued shares of Common Stock as will from time to time
be sufficient to permit the exercise of all outstanding Warrants, and shall take
all action required to increase the authorized number of shares of Common Stock
if at any time there shall be insufficient authorized but unissued shares of
Common Stock to permit such reservation or to permit the exercise of all
outstanding Warrants. The Company shall prepare and file, and cooperate with the
holder of this Warrant so that it may prepare and file, in each case within five
Business Days of a request by such holder, notification and report forms in
compliance with the HSR Act, and shall otherwise fully comply with the
requirements of the HSR Act, to the extent required in connection with the
exercise of the Warrant. The Company shall bear all of its own expenses and all
of its own out-of-pocket expenses (including reasonable attorneys' fees, charges
and expenses) and filing fees of such holder in connection with any such
preparation and filing.
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Section 6. Registered Holder. The person in whose name this
Warrant Certificate is registered shall be deemed the owner hereof and of the
Warrants evidenced hereby for all purposes. The registered holder of this
Warrant Certificate, in its capacity as such, shall not be entitled to any
rights whatsoever as a stockholder of the Company, except as herein provided.
Section 7. Transfer of Warrants. Any transfer of the rights
represented by this Warrant Certificate shall be subject to compliance with the
Warrantholder Agreement and shall be effected by the surrender of this Warrant
Certificate, along with the form of assignment attached hereto, properly
completed and executed by the registered holder hereof, at the principal
executive office of the Company in the United States of America, together with
an appropriate investment letter, if deemed reasonably necessary by counsel to
the Company to assure compliance with applicable securities laws. Thereupon, the
Company shall issue in the name or names specified by the registered holder
hereof and, in the event of a partial transfer, in the name of the registered
holder hereof, a new Warrant Certificate or Certificates evidencing the right to
purchase such number of shares of Common Stock as shall be equal to the number
of shares of Common Stock then purchasable hereunder.
Section 8. Denominations. The Company covenants that it will,
at its expense, promptly upon surrender of this Warrant Certificate at the
principal executive office of the Company in the United States of America,
execute and deliver to the registered holder hereof a new Warrant Certificate or
Certificates in denominations specified by such holder for an aggregate number
of Warrants equal to the number of Warrants evidenced by this Warrant
Certificate.
Section 9. Replacement of Warrants. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, in the case of loss, theft or destruction, upon
delivery of an indemnity reasonably satisfactory to the Company (in the case of
an insurance company or other institutional investor, its own unsecured
indemnity agreement shall be deemed to be reasonably satisfactory), or, in the
case of mutilation, upon surrender and cancellation thereof, the Company will
issue a new Warrant Certificate of like tenor for a number of Warrants equal to
the number of Warrants evidenced by this Warrant Certificate.
Section 10. Governing Law. THIS WARRANT CERTIFICATE SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 11. Rights Inure to Registered Holder. The Warrants
evidenced by this Warrant Certificate will inure to the benefit of and be
binding upon the registered holder thereof and the Company and their respective
successors and permitted assigns. Nothing in this Warrant
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Certificate shall be construed to give to any Person other than the Company and
the registered holder thereof any legal or equitable right, remedy or claim
under this Warrant Certificate, and this Warrant Certificate shall be for the
sole and exclusive benefit of the Company and such registered holder. Nothing in
this Warrant Certificate shall be construed to give the registered holder hereof
any rights as a holder of shares of Common Stock until such time, if any, as the
Warrants evidenced by this Warrant Certificate are exercised in accordance with
the provisions hereof.
Section 12. Definitions. For the purposes of this Warrant
Certificate, the following terms shall have the meanings indicated below:
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York or the
City of Atlanta, are authorized or required by law or executive order to close.
"Current Market Price" per share shall mean, on any date
specified herein for the determination thereof, (a) the average daily Market
Price of the Common Stock for those days during the period of 15 days, ending on
such date, on which the national securities exchanges were open for trading, and
(b) if the Common Stock is not then listed or quoted in the over-counter market,
the Market Price on such date.
"Effective Date" shall have the meaning given in the
Warrantholder Agreement.
"Exercise Price" shall have the meaning given it in the first
paragraph hereof.
"Fair Market Value" shall mean the amount which a willing
buyer, under no compulsion to buy, would pay a willing seller, under no
compulsion to sell, in an arm's-length transaction (assuming that the Common
Stock is valued "as if fully distributed," meaning that no consideration is
given to minority investment discounts, discounts related to illiquidity or
restrictions on transferability).
"Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"HSR Act" shall mean the Hart-Scott-Rodino Anti-Trust
Improvements Act of 1976, as amended and the rules and regulations of the
Federal Trade Commission promulgated thereunder.
"IPO" shall mean the initial public offering of the Company's
Common Stock with gross proceeds of at least $25 million or representing at
least 20% of the Common Stock on
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a fully diluted basis and such Common Stock is listed on the NYSE or quoted or
listed on any other national securities exchange or the Nasdaq.
"Issue Date" shall mean May 7, 1997.
"Market Price" shall mean, per share of Common Stock, on any
date specified herein: (a) if the Common Stock is then listed or admitted to
trading on any national securities exchange, the closing price of the Common
Stock on such date; (b) if the Common Stock is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security, the last sale price of the Common Stock on such date; or
(c) if there shall have been no trading on such date or if the Common Stock is
not so designated, the average of the reported closing bid and asked price of
the Common Stock, on such date as shown by Nasdaq and reported by any member
firm of the NYSE selected by the Company; or (d) if neither (a), (b) nor (c) is
applicable, the Fair Market Value per share determined in good faith by the
Board of Directors of the Company which shall be deemed to be Fair Market Value
unless holders of at least 33% of Common Stock issued or issuable upon exercise
of the Warrants request that the Company obtain an opinion of a nationally
recognized investment banking firm chosen by the Company (who shall bear the
expense) and reasonably acceptable to such requesting holders of the Warrants,
in which event the Fair Market Value shall be as determined by such investment
banking firm.
"Nasdaq" shall mean the National Market System of the Nasdaq
Stock Market.
"Number Issuable" shall have the meaning given it in the
second paragraph hereof.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Person" shall mean any individual, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Sale Transaction" means the merger or consolidation with or
into another entity by the Company or the conveyance, transfer, lease or other
disposition of (whether in one transaction or in a series of transactions) all
or substantially all of the Company's assets (whenever acquired).
"Special Notice" shall mean the notice sent by a holder to the
Company indicating its preference to have any special distribution set aside for
its benefit upon exercise of the Warrant.
"Warrant Exercise Documentation" shall have the meaning given
it in Section 1 hereof.
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"Warrantholder Agreement" shall mean the Warrantholder
Agreement, dated as of May 21, 1999, between the Company, Charlesbank Equity
Fund IV, Limited Partnership and The 1818 Mezzanine Fund, L.P., as the same may
be amended or modified from time to time in accordance with its terms.
Section 13. Notices. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
courier services or personal delivery, (a) if to the holder of a Warrant, at
such holder's last known address appearing on the books of the Company; and (b)
if to the Company, at its principal executive office in the United States
located at the address designated for notices in the Warrantholder Agreement, or
such other address as shall have been furnished to the party given or making
such notice, demand or other communication. All such notices and communications
shall be deemed to have been duly given: when delivered by hand, if personally
delivered; when delivered to a courier if delivered by commercial overnight
courier service; and five Business Days after being deposited in the mail,
postage prepaid, if mailed.
Section 14. Effectiveness. This Amended and Restated Warrant
is executed and delivered pursuant to Section 5.1 of the Warrantholder
Agreement, and shall become effective on the Effective Date. If, prior to the
Effective Date, the Warrantholder Agreement is terminated for any reason, this
Warrant shall automatically terminate and be of no further force and effect.
From and after the Effective Date, Warrant No. 2 (issued on May 20, 1998) shall
be superseded in its entirety by this Amended and Restated Warrant and have no
further force and effect.
(Signature page follows.)
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IN WITNESS WHEREOF, the Company has caused this Amended and
Restated Warrant Certificate to be duly executed as of May 24, 1999.
THE J.H. HEAFNER COMPANY, INC.
By: /s/ J. Michael Gaither
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J. Michael Gaither
Vice President, General Counsel
and Secretary
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[Form of Assignment Form]
[To be executed upon assignment of Warrants]
The undersigned hereby assigns and transfers this Warrant
Certificate to ____________________ whose Social Security Number or Tax ID
Number is _________________ and whose record address is
__________________________ ___________, and irrevocably appoints
________________ as agent to transfer this security on the books of the Company.
Such agent may substitute another to act for such agent.
Signature:
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Signature Guarantee:
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Date:
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