EXHIBIT 10.6
SECOND AMENDED AND RESTATED WARRANT
October _, 2003
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.
Warrant to Purchase 25,156
Shares of Common Stock
MERCURY AIR GROUP, INC.
COMMON STOCK PURCHASE WARRANT
Void after September 9, 2006
Mercury Air Group, Inc. (the "Company"), a Delaware corporation, hereby
certifies that for value received, J.H. Whitney Mezzanine Debt Fund, L.P,
("WMF"), a Delaware limited partnership, or its successors or assigns (the
"Holder"), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, an aggregate of 25,156 fully paid and nonassessable
shares of Common Stock (as hereinafter defined) of the Company, at a per share
exercise price equal to the lesser of (i) $7.484 per share and (ii) the per
share exercise price payable by Allied Capital Corporation (or its transferees
or assignees) pursuant to that certain Second Amended and Restated Warrant dated
as of the date hereof (the "Allied Warrant") issued by the Company to Allied
Capital Corporation (or any replacement warrant (the "Purchase Price"), in
either case subject to adjustment as provided herein, at any time or from time
to time beginning on the date hereof and prior to 5:00 P.M., New York City time,
on September 9, 2006 (the "Expiration Date").
This Second Amended and Restated Warrant amends and restates the
Warrant issued pursuant to the Securities Purchase Agreement (the "Purchase
Agreement"), dated as of September 10, 1999, between Mercury Air Group, Inc. and
WMF, as amended, and is subject to the terms thereof. Capitalized terms used
herein and not otherwise defined shall have the respective meanings assigned to
such terms in the Purchase Agreement. The Holder is entitled to the rights and
subject to the obligations contained in the Purchase Agreement, the
Stockholders' Agreement and the Registration Rights Agreement relating to this
Warrant and the shares of Common Stock issuable upon exercise of this Warrant.
1. DEFINITIONS. For the purposes of this Warrant, the following
terms shall have the meanings indicated:
"Applicable Price" shall mean the higher of (a) the Current Market
Price per share of Common Stock on the applicable record or other relevant date
and (b) the Dilution Price.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Closing Price" shall mean, with respect to each share of Common Stock
for any day, (a) the last reported sale price regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked prices
regular way, in either case as reported on the principal national securities
exchange on which the Common Stock is listed or admitted for trading or (b) if
the Common Stock is not listed or admitted for trading on any national
securities exchange, the last reported sale price or, in case no such sale takes
place on such day, the average of the highest reported bid and the lowest
reported asked quotation for the Common Stock, in either case as reported on the
NASDAQ or a similar service if NASDAQ is no longer reporting such information.
"Common Stock" means the common stock, par value $.01 per share, of the
Company, and any class of stock resulting from successive changes or
reclassification of such Common Stock.
"Company" has the meaning ascribed to such term in the first paragraph
of this Warrant.
"Current Market Price" shall be determined in accordance with
Subsection 3(e).
"Dilution Price" shall mean, with respect to each share of Common
Stock, $7.484, subject to appropriate adjustment for events described in
Subsection 3(a).
"Exercise Date" has the meaning ascribed to such term in Subsection
2(d).
"Expiration Date" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"Holder" has the meaning ascribed to such term in the first paragraph
and Section 9 of this Warrant.
"Issued Warrant Shares" means any shares of Common Stock issued upon
exercise of the Warrant.
"NASDAQ" shall mean the Automatic Quotation System of the National
Association of Securities Dealers, Inc.
"Person" shall mean any individual, firm, 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, and shall include
any successor (by merger or otherwise) of such entity.
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"Purchase Agreement" has the meaning ascribed to such term in the
second paragraph of this Warrant.
"Purchase Price" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"Stockholders' Agreement" means the Stockholders' Agreement
substantially in the form attached to the Purchase Agreement as Exhibit E.
"Warrant" shall mean this Warrant and any subsequent Warrant issued
pursuant to the terms of this Warrant.
"Warrant Register" has the meaning ascribed to such term in Subsection
9(c).
2. EXERCISE OF WARRANT.
(a) Exercise. This Warrant may be exercised, in whole or
in part, at any time or from time to time during the period beginning on the
date hereof and ending on the Expiration Date, by surrendering to the Company at
its principal office this Warrant, with the form of Election to Purchase Shares
(the "Election to Purchase Shares") attached hereto as Exhibit A duly executed
by the Holder and accompanied by payment of the Purchase Price for the number of
shares of Common Stock specified in such form.
(b) Delivery of Shares; Payment of Purchase Price. As
soon as practicable after surrender of this Warrant and receipt of payment, the
Company shall promptly issue and deliver to the Holder a certificate or
certificates for the number of shares of Common Stock set forth in the Election
to Purchase Shares, in such name or names as may be designated by such Holder,
along with a check for the amount of cash to be paid in lieu of issuance of
fractional shares, if any. Payment of the Purchase Price may be made as follows
(or by any combination of the following): (i) in United States currency by cash
or delivery of a certified check, bank draft or postal or express money order
payable to the order of the Company, (ii) by surrender of a number of shares of
Common Stock held by the Holder equal to the quotient obtained by dividing (A)
the Purchase Price payable with respect to the portion of this Warrant then
being exercised by (B) the Current Market Price per share of Common Stock on the
Exercise Date, or (iii) by cancellation of any portion of this Warrant with
respect to the number of shares of Common Stock equal to the quotient obtained
by dividing (A) the aggregate Purchase Price payable with respect to the portion
of this Warrant then being exercised by (B) the difference between (1) Current
Market Price per share of Common Stock on the Exercise Date, and (2) the
Purchase Price per share of Common Stock.
(c) Partial Exercise. If this Warrant is exercised for
less than all of the shares of Common Stock purchasable under this Warrant, the
Company shall cancel this Warrant upon surrender hereof and shall execute and
deliver to the Holder a new Warrant of like tenor for the balance of the shares
of Common Stock purchasable hereunder.
- -WMF Warrant
3
(d) When Exercise Effective. The exercise of this Warrant
shall be deemed to have been effective immediately prior to the close of
business on the Business Day on which this Warrant is surrendered to and the
Purchase Price is received by the Company as provided in this Section 2 (the
"Exercise Date") and the Person in whose name any certificate for shares of
Common Stock shall be issuable upon such exercise, as provided in Subsection
2(b), shall be deemed to be the record holder of such shares of Common Stock for
all purposes on the Exercise Date.
(e) Issued Warrant Shares Fully Paid, Nonassessable. The
Company shall take all actions necessary to ensure that following exercise of
this Warrant in accordance with the provisions of this Section 2, the Issued
Warrant Shares issued hereunder shall, without further action by the Holder, be
fully paid and nonassessable.
(f) Continued Validity. A Holder of shares of Common
Stock issued upon the exercise of this Warrant, in whole or in part, shall
continue to be entitled to all of the rights and subject to all of the
obligations set forth in Section 9.
3. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The
Purchase Price and the number of shares of Common Stock issuable upon exercise
of this Warrant shall be adjusted from time to time upon the occurrence of the
following events:
(a) Dividend. Subdivision, Combination or
Reclassification of Common Stock. If the Company shall, at any time or from time
to time, (i) declare a dividend on the Common Stock payable in shares of its
capital stock (including Common Stock), (ii) subdivide the outstanding Common
Stock into a larger number of shares of Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares of its Common Stock, or
(iv) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then in each such
case, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable on
such date shall be proportionately adjusted so that the Holder of any Warrant
exercised after such date shall be entitled to receive, upon payment of the same
aggregate amount as would have been payable before such date, the aggregate
number and kind of shares of capital stock which, if such Warrant had been
exercised immediately prior to such date, such Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Any such adjustment shall become effective
immediately after the record date of such dividend or the effective date of such
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. If a dividend is
declared and such dividend is not paid, the Purchase Price shall again be
adjusted to be the Purchase Price in effect immediately prior to such record
date (giving effect to all adjustments that otherwise would be required to be
made pursuant to this Section 3 from and after such record date).
(b) Issuance of Rights to Purchase Common Stock Below
Current Market Price or Dilution Price. If the Company shall, at any time or
from time to time, fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock entitling them to
~WMF Warrant
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subscribe for or purchase Common Stock, or securities convertible into Common
Stock at a price per share of Common Stock or having a conversion price per
share of Common Stock if a security is convertible into Common Stock (determined
in either such case by dividing (x) the total consideration payable to the
Company upon exercise, conversion or exchange of such rights, options, warrants
or other securities convertible into Common Stock by (y) the total number of
shares of Common Stock covered by such rights, options, warrants or other
securities convertible into Common Stock) which is lower than either the Current
Market Price per share of Common Stock on such record date (or, if an
ex-dividend date has been established for such record date, on the day next
preceding such ex-dividend date) or the Dilution Price, then, the Purchase Price
shall be reduced to the price determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the sum of the number of shares of Common Stock outstanding on
such record date plus the number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so to be
offered (or the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at the Applicable Price and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date plus the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such price for subscription or
purchase may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be determined in good
faith by the Board of Directors of the Company. Any such adjustment shall become
effective immediately after the record date for such rights or warrants. Such
adjustment shall be made successively whenever such a record date is fixed. If
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to the Purchase Price that otherwise would be in effect but for the
fact such record date was fixed (giving effect to all adjustments that otherwise
would be required to be made pursuant to this Section 3 from and after such
record date).
(c) Certain Distributions. If the Company shall, at any
time or from time to time, fix a record date for the distribution to all holders
of Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, assets or other property (other than regularly
scheduled cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in capital stock for which
adjustment is made under Subsection 3(a)) or subscription rights, options or
warrants (excluding those referred to in Subsection 3(b)), then the Purchase
Price shall be reduced to the price determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction (which shall in no
event be less than zero), the numerator of which shall be the Current Market
Price per share of Common Stock on such record date (or, if an ex-dividend date
has been established for such record date, on the next day preceding such
ex-dividend date), less the fair market value (as determined in good faith by
the Board of Directors of the Company) of the portion of the assets, evidences
of indebtedness, other property, subscription rights or warrants so to be
distributed applicable to one share of Common Stock and the denominator of which
shall be such Current Market Price per share of Common Stock. Any such
adjustment shall become effective immediately after the record date for such
distribution. Such adjustments shall be made successively whenever such a record
date is fixed. In the event that such distribution is not so made, the Purchase
Price shall be adjusted to the Purchase Price in effect immediately prior to
such record date (giving effect to all adjustments that otherwise would be
required to be made
- -WMF Warrant
5
pursuant to this Section 3 from and after such record date).
(d) Issuance of Common Stock Below Current Market Price
or Dilution Price.
(i) If the Company shall, at any time and from
time to time, after the date hereof, directly or indirectly, sell or issue
shares of Common Stock (regardless of whether originally issued or from the
Company's treasury), or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock) at a price per share of Common Stock (determined, in the case of rights,
options, warrants or convertible or exchangeable securities, by dividing (x) the
total consideration received or receivable by the Company in consideration of
the sale or issuance of such rights, options, warrants or convertible or
exchangeable securities, plus the total consideration payable to the Company
upon exercise or conversion or exchange thereof, by (y) the total number of
shares of Common Stock covered by such rights, options, warrants or convertible
or exchangeable securities) which is lower than either the Current Market Price
per share of Common Stock or the Dilution Price immediately prior to such sale
or issuance, then, subject to clause 3(d)(ii), the Purchase Price shall be
reduced to a price determined by multiplying the Purchase Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior to such
sale or issuance plus the number of shares of Common Stock which the aggregate
consideration received (determined as provided below) for such sale or issuance
would purchase at the Applicable Price and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately after such sale
or issuance. Such adjustment shall be made successively whenever such sale or
issuance is made. For the purposes of such adjustments, the shares of Common
Stock which the holder of any such rights, options, warrants, or convertible or
exchangeable securities shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of such sale or issuance and
the consideration "received" by the Company therefor shall be deemed to be the
consideration actually received or receivable by the Company (plus any
underwriting discounts or commissions in connection therewith) for such rights,
options, warrants or convertible or exchangeable securities, plus the
consideration slated in such rights, options, warrants or convertible or
exchangeable securities to be payable to the Company for the shares of Common
Stock covered thereby. If the Company shall sell or issue 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 or receivable by or payable to the Company for
purposes of the first sentence and the immediately preceding sentence of this
Subsection 3(d), the fair value of such property shall be determined in good
faith by the Board of Directors of the Company. The determination of whether any
adjustment is required under this Subsection 3(d) by reason of the sale and
issuance of rights, options, warrants or convertible or exchangeable securities
and the amount of such adjustment, if any, shall be made only at the time of
such issuance or sale and not at the subsequent time of issuance of shares of
Common Stock upon the exercise of such rights to subscribe or purchase.
(ii) No adjustment shall be made to the Purchase
Price pursuant to clause 3(d)(i) in connection with the issuance of (A) shares
issued upon exercise of this Warrant; or (B) options to purchase an aggregate of
70,847 shares of Common Stock granted on or after December 30, 2002, if such
shares would otherwise be included in clause 3(d)(i).
~WMF Warrant
6
(iii) Notwithstanding any provision in Section 3
to the contrary and without limitation to any other provision contained in
Section 3, in the event any securities of the Company (other than this Warrant),
including, without limitation, those securities set forth as exceptions in
Subsection 3(d)(ii) (for purposes of this Subsection, collectively, the "Subject
Securities"), are amended or otherwise modified by operation of its terms or
otherwise (including, without limitation, by operation of such Subject
Securities' anti-dilution provisions, other than anti-dilution provisions
substantially similar to those set forth in Subsection 3(d)(i)) in any manner
whatsoever that results in (i) the reduction of the exercise, conversion or
exchange price of such Subject Securities payable upon the exercise for, or
conversion or exchange into, Common Stock or other securities exercisable for,
or convertible or exchangeable into, Common Stock and/or (ii) such Subject
Securities becoming exercisable for, or convertible or exchangeable into (A)
more shares or dollar amount of such Subject Securities which are, in turn
exercisable for, or convertible or exchangeable into, Common Stock, or (B) more
shares of Common Stock, then such amendment or modification shall be treated for
purposes of Section 3 as if the Subject Securities which have been amended or
modified have been terminated and new securities have been issued with the
amended or modified terms. The Company shall make all necessary adjustments
(including successive adjustments if required) to the Purchase Price in
accordance with Section 3, but in no event shall the Purchase Price be greater
than it was immediately prior to the application of this Subsection to the
transaction in question. On the expiration or termination of any such amended or
modified Subject Securities for which adjustment has been made pursuant to the
operation of the provisions of this Subsection under Section 3(b) or 3(d), as
the case may be, without such Subject Securities having been exercised,
converted or exchanged in full pursuant to their terms, the adjusted Purchase
Price shall be appropriately readjusted in the manner specified in such Section.
(iv) The change in exercise price as a result of
the operation of clause (ii) to the preamble to this Warrant shall be the only
adjustment made as a result of any change in the exercise price of the Allied
Warrant.
(e) Determination of Current Market Price. For the
purpose of any computation under Subsections (b), (c) or (d) of this Section 3
or any other provision of this Warrant, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily Closing
Prices per share of Common Stock for the 10 consecutive trading days commencing
15 trading days before such date. If on any such date the shares of Common Stock
are not listed or admitted for trading on any national securities exchange or
quoted by NASDAQ or a similar service, then the Company, on the one hand, and
WMF on the other hand, shall each promptly appoint as an appraiser an individual
who shall be a member of a nationally recognized investment banking firm. Each
appraiser shall be instructed to, within 30 days of appointment, determine the
Current Market Price per share of Common Stock which shall be deemed to be equal
to the fair market value per share of Common Stock as of such date. If the two
appraisers are unable to agree on the Current Market Price per share of Common
Stock within such 30 day period, then the two appraisers, within 10 days after
the end of such 30 day period shall jointly select a third appraiser. The third
appraiser shall, within 30 days of its appointment, determine, in good faith,
the Current Market Price per share of Common Stock and such determination shall
be controlling. If any party fails to appoint an appraiser or if one of the two
initial appraisers fails after appointment to submit its appraisal within the
required period, the appraisal submitted by the remaining appraiser shall be
controlling. The cost of the foregoing
~WMF Warrant
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appraisals shall be shared one-half by the Company and one-half by WMF,
provided, however, in the event a third appraiser is utilized and one of the two
initial appraisals (but not the other initial appraisal) is greater than or less
than the appraisal by such third appraiser by 10% or more, then the cost of all
of the foregoing appraisals shall be borne by the party who appointed the
appraiser who made such initial appraisal.
(f) De Minimis Adjustments. No adjustment in the
Purchase Price shall be made if the amount of such adjustment would result in a
change in the Purchase Price per share of less than $0.05, but in such case any
adjustment that would otherwise be required to be made shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment, which together with any adjustment so carried forward, would result
in a change in the Purchase Price of $0.05 per share or more. If the Company
shall, at any time or from time to time, issue Common Stock by way of dividends
on any stock of the Company or subdivide or combine the outstanding shares of
the Common Stock, such amount of $0.05 (as theretofore increased or decreased,
if such amounts shall have been adjusted in accordance with the provisions of
this clause) shall forthwith be proportionately increased in the case of a
combination or decreased in the case of a subdivision or stock dividend so as
appropriately to reflect the same. Notwithstanding the provisions of the first
sentence of this Subsection 3(f), any adjustment postponed pursuant to this
Subsection 3(f) shall be made no later than the earlier of (i) three years from
the date of the transaction that would, but for the provisions of the first
sentence of this Section 3(f), have required such adjustment, (ii) an Exercise
Date or (iii) the Expiration Date.
(g) Adjustments to Other Shares. In the event that at any
time, as a result of an adjustment made pursuant to Subsection 3(a), the Holder
shall become entitled to receive, upon exercise of this Warrant, any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon exercise of this Warrant shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in Subsections 3(a), (b), (c) and (d), inclusive, and the provisions
of Sections 2, 5, 6 and 7 with respect to the shares of Common Stock shall apply
on like terms to any such other shares.
(h) Adjustment of Number of Shares Issuable Upon
Exercise. Upon each adjustment of the Purchase Price as a result of the
calculations made in Subsections 3(a), (b), (c) or (d), this Warrant shall
thereafter evidence the right to receive, at the adjusted Purchase Price, that
number of shares of Common Stock (calculated to the nearest one-hundredth)
obtained by dividing (x) the product of the aggregate number of shares of Common
Stock covered by this Warrant immediately prior to such adjustment and the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price by (y) the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) Reorganization, Reclassification, Merger and Sale of
Assets. If there occurs any capital reorganization or any reclassification of
the Common Stock of the Company, the consolidation or merger of the Company with
or into another Person (other than a merger or consolidation of the Company in
which the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of its Common Stock) or the
sale or conveyance of all or substantially all of the assets of the Company to
another Person,
~WMF Warrant
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then the Holder will thereafter be entitled to receive, upon the exercise of
this Warrant in accordance with the terms hereof, the same kind and amounts of
securities (including shares of stock) or other assets, or both, which were
issuable or distributable to the holders of outstanding Common Stock of the
Company upon such reorganization, reclassification, consolidation, merger, sale
or conveyance, in respect of that number of shares of Common Stock then
deliverable upon the exercise of this Warrant if this Warrant had been exercised
immediately prior to such reorganization, reclassification, consolidation,
merger, sale or conveyance; and, in any such case, appropriate adjustments (as
determined in good faith by the Board of Directors of the Company) shall be made
to assure that the provisions hereof (including provisions with respect to
changes in, and other adjustments of, the Purchase Price) shall thereafter be
applicable, as nearly as reasonably may be practicable, in relation to any
securities or other assets thereafter deliverable upon exercise of this Warrant.
4. CERTIFICATE AS TO ADJUSTMENTS. Whenever the Purchase Price and
the number of shares of Common Stock issuable, or the securities or other
property deliverable, upon the exercise of this Warrant shall be adjusted
pursuant to the provisions hereof, the Company shall promptly give written
notice thereof to the Holder, in accordance with Section 13, in the form of a
certificate signed by the Chairman of the Board, President or one of the Vice
Presidents of the Company, and by the Chief Financial Officer, Treasurer or one
of the Assistant Treasurers of the Company, stating the adjusted Purchase Price,
the number of shares of Common Stock issuable, or the securities or other
property deliverable, upon exercise of the Warrant and setting forth in
reasonable detail the method of calculation and the facts requiring such
adjustment and upon which such calculation is based. Each adjustment shall
remain in effect until a subsequent adjustment is required.
5. FRACTIONAL SHARES. Notwithstanding an adjustment pursuant to
Section 3(h) in the number of shares of Common Stock covered by this Warrant or
any other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company may
make payment to the Holder, at the time of exercise of this Warrant as herein
provided, of an amount in cash equal to such fraction multiplied by the greater
of the Current Market Price of a share of Common Stock on the Exercise Date and
the Dilution Price.
6. NOTICE OF PROPOSED ACTIONS. In case the Company shall propose
at any time or from time to time (a) to declare or pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regularly scheduled
cash dividend), (b) to offer to the holders of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, (c) to effect
any reclassification of its Common Stock, (d) to effect any consolidation,
merger or sale, transfer or other disposition of all or substantially all of the
property, assets or business of the Company which would, if consummated, adjust
the Purchase Price or the securities issuable upon exercise of the Warrants, (e)
to effect the liquidation, dissolution or winding up of the Company, or (f) to
take any other action that would require a vote of the Company's stockholders,
then, in each such case, the Company shall give to the Holder, in accordance
with Section 13, a written notice of such proposed action, which shall specify
(i) the record date for the purposes of such stock dividend, distribution of
rights or warrants or vote of the stockholders of the Company, or if a record is
not
~WMF Warrant
9
to be taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend, distribution of rights or warrants, or
vote is to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution or
winding up is expected to become effective, and such notice shall be so given as
promptly as possible but in any event at least ten (10) Business Days prior to
the applicable record, determination or effective date specified in such notice.
7. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment
of its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other 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 action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value of any shares of
stock receivable on the exercise of this Warrant above the amount payable
therefor on such exercise, (b) will at all times reserve and keep available the
maximum number of its authorized shares of Common Stock, free from all
preemptive rights therein, which will be sufficient to permit the full exercise
of this Warrant, and (c) will take all such action as may be necessary or
appropriate in order that all shares of Common Stock as may be issued pursuant
to the exercise of this Warrant will, upon issuance, be duly and validly issued,
fully paid and nonassessable, and free from all taxes, liens and charges with
respect to the issue thereof.
8. REPLACEMENT OF WARRANTS. On receipt by the Company of an
affidavit of an authorized representative of the Holder stating the
circumstances of the loss, theft, destruction or mutilation of this Warrant (and
in the case of any such mutilation, on surrender and cancellation of such
Warrant), the Company at its expense will promptly execute and deliver, in lieu
thereof, a new Warrant of like tenor which shall be exercisable for a like
number of shares of Common Stock. If required by the Company, such Holder must
provide an indemnity bond or other indemnity sufficient in the judgment of the
Company to protect the Company from any loss which it may suffer if a lost,
stolen or destroyed Warrant is replaced.
9. RESTRICTIONS ON TRANSFER.
(a) Subject to the provisions of this Section 9, this
Warrant may be transferred or assigned, in whole or in part, by the Holder at
any time, and from time to time. The term "Holder" as used herein shall also
include any transferee of this Warrant whose name has been recorded by the
Company in the Warrant Register (as hereinafter defined). Each transferee of the
Warrant or the Common Stock issuable upon the exercise of the Warrant
acknowledges that the Warrant or the Common Stock issuable upon the exercise of
the Warrant has not been registered under the Securities Act and may be
transferred only pursuant to an effective registration under the Securities Act
or pursuant to an applicable exemption from the registration requirements of the
Securities Act.
(b) With respect to a transfer that should occur prior to
the time that the Warrant or the Common Stock issuable upon the exercise thereof
is registered under the Securities Act, such Holder shall request an opinion of
counsel (which shall be rendered by
- -WMF Warrant
10
counsel reasonably acceptable to the Company) that the proposed transfer may be
effected without registration or qualification under any Federal or state
securities or blue sky law. Counsel shall, as promptly as practicable, notify
the Company and the Holder of such opinion and of the terms and conditions, if
any, to be observed in such transfer, whereupon the Holder shall be entitled to
transfer this Warrant or such shares of Common Stock (or portion thereof),
subject to any other provisions and limitations of this Warrant. In the event
this Warrant shall be exercised as an incident to such transfer, such exercise
shall relate back and for all purposes of this Warrant be deemed to have
occurred as of the date of such notice regardless of delays incurred by reason
of the provisions of this Section 9 which may result in the actual exercise on
any later date.
(c) The Company shall maintain a register (the "Warrant
Register") in its principal office for the purpose of registering the Warrant
and any transfer thereof, which register shall reflect and identify, at all
times, the ownership of any interest in the Warrant. Upon the issuance of this
Warrant, the Company shall record the name of the initial purchaser of this
Warrant in the Warrant Register as the first Holder, Upon surrender for
registration of transfer or exchange of this Warrant together with a properly
executed Form of Assignment attached hereto as Exhibit B at the principal office
of the Company, the Company shall, at its expense, execute and deliver one or
more new Warrants of like tenor which shall be exercisable for a like aggregate
number of shares of Common Stock, registered in the name of the Holder or a
transferee or transferees.
(d) Notwithstanding any provision in this Warrant to the
contrary, the Holder shall not sell, assign, or otherwise transfer to any Person
(a "Transferee") any Issued Warrant Shares prior to the Expiration Date unless
such Transferee agrees in writing to be bound in the same manner as the Holder
by the provisions of this Section 9.
10. NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder hereof to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability of such
Holder as a stockholder of the Company.
11. CHARGES, TAXES AND EXPENSES. Issuance of certificates for
shares of Common Stock upon the exercise of this Warrant shall be made without
charge to the Holder hereof for any issue or transfer tax, or other incidental
expense, in respect of the issuance or delivery of such certificates or the
securities represented thereby, all of which taxes and expenses shall be paid by
the Company.
12. AMENDMENT OR WAIVER. This Warrant and any term hereof may be
amended, waived, discharged or terminated only by and with the written consent
of the Company and the Holder.
13. NOTICES. Any notice or other communication (or delivery)
required or permitted hereunder shall be made in writing and shall be by
registered mail, return receipt requested, telecopier, courier service or
personal delivery to the Company at its principal office as specified in Section
11.2 of the Purchase Agreement and to the Holder at its address as it appears in
the
~WMF Warrant
11
Warrant Register. All such notices and communications (and deliveries) shall be
deemed to have been duly given: when delivered by hand, if personally delivered;
when delivered by courier, if delivered by commercial overnight courier service;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; and when receipt is acknowledged, if telecopied.
14. CERTAIN REMEDIES. The Holder shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Warrant
and to enforce specifically the terms and provisions of this Warrant in any
court of the United States or any state thereof having jurisdiction, this being
in addition to any other remedy to which such Holder may be entitled at law or
in equity.
15. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of law of such State (including giving effect to GOL
Section 5-1401).
16. HEADINGS. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
MERCURY AIR GROUP, INC.
By: [ILLEGIBLE]
----------------------------------
Name: [ILLEGIBLE]
Title: [ILLEGIBLE]
~WMF Warrant
12
EXHIBIT A TO COMMON STOCK
PURCHASE WARRANT
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase _________ shares of Common Stock, par value $.01 per share ("Common
Stock"), of Mercury Air Group, Inc. (the "Company") and hereby makes payment of
$_________________________therefor] [or] [makes payment therefore by
surrendering pursuant to Section 2(b)(iii) ____ shares of Common Stock of the
Company] [or] [makes payment therefor by cancellation pursuant to Section
2(b)(iv) of a portion of the Warrant with respect to____________________shares
of Common Stock]. The undersigned hereby requests that certificates for such
shares be issued and delivered as follows:
ISSUE TO:_______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased hereby is less than
the number of shares of Common Stock covered by the Warrant, the undersigned
requests that a new Warrant representing the number of shares of Common Stock
not purchased be issued and delivered as follows:
ISSUE TO:_______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
A-1
Dated: [NAME OF HOLDER(1)]
By: __________________________________
Name:
Title:
- ------------
1. Name of Holder must conform in all respects to name of Holder
as specified on the face of the Warrant
A-2
EXHIBIT B TO COMMON STOCK
PURCHASE WARRANT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $0.01 per share ("Common Stock"), of Mercury
Air Group, Inc. represented by the Warrant, with respect to the number of shares
of Common Stock set forth below:
Name of Assignee Address No.of Shares
and does hereby irrevocably constitute and appoint__________________________
Attorney to make such transfer on the books of Mercury Air Group, Inc.
maintained for that purpose, with full power of substitution in the premises.
Dated: [NAME OF HOLDER (1)]
By: __________________________________
Name:
Title:
- --------------
1. Name of Holder must conform in all respects to name of Holder
as specified on the face of the Warrant.
B-1