Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - PALM HARBOR HOMES INC /FL/ | v172792_8k.htm |
| EX-4.2 - WARRANT TO PURCHASE 987,998 SHARES OF COMMON STOCK - PALM HARBOR HOMES INC /FL/ | v172792_ex4-2.htm |
| EX-4.1 - WARRANT TO PURCHASE 62,542 SHARES OF COMMON STOCK - PALM HARBOR HOMES INC /FL/ | v172792_ex4-1.htm |
| EX-4.5 - REGISTRATION RIGHTS AGREEMENT - PALM HARBOR HOMES INC /FL/ | v172792_ex4-5.htm |
| EX-4.3 - WARRANT TO PURCHASE 158,705 SHARES OF COMMON STOCK - PALM HARBOR HOMES INC /FL/ | v172792_ex4-3.htm |
| EX-10.3 - MORTGAGE SALE, CONTRIBUTION AND SERVICING AGREEMENT - PALM HARBOR HOMES INC /FL/ | v172792_ex10-3.htm |
| EX-10.1 - CREDIT AGREEMENT - PALM HARBOR HOMES INC /FL/ | v172792_ex10-1.htm |
| EX-10.2 - GUARANTY AND SECURITY AGREEMENT - PALM HARBOR HOMES INC /FL/ | v172792_ex10-2.htm |
NEITHER
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON
THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES
LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY
RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL
AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
PALM
HARBOR HOMES, INC.
WARRANT
TO PURCHASE COMMON STOCK
Warrant
No.: C-6
Date of
Issuance: January 29, 2010 (“Issuance Date”)
Palm
Harbor Homes, Inc., a Florida corporation (the “Company”), certifies that, for
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, Virgo – Magnolia, LP, the registered holder hereof or its
permitted assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon surrender of this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the “Warrant”), at any time or
times from the Issuance Date, but not after 5:30 p.m., New York Time, on the
Expiration Date (as defined below), Eighty-Seven Thousand Three Hundred
Eighty-Nine (87,389) fully paid and nonassessable shares of Common Stock (as
defined below) (the
“Warrant
Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in
Section 17. This Warrant is issued pursuant to that certain
Credit Agreement, dated as of January 29, 2010 (the “Loan Date”), by and among
Countryplace Acceptance Corporation, a Nevada corporation, Countryplace
Mortgage, Ltd., a Texas limited partnership, Countryplace Mortgage Holdings,
LLC, a Delaware limited liability company, Palm Harbor Homes, Inc., a Florida
corporation, Countryplace Acceptance G.P., LLC, a Texas limited liability
company, Countryplace Acceptance L.P., LLC, a Delaware limited liability
company, the lenders party thereto and Virgo Service Company, LLC, a Delaware
limited liability company, as administrative agent and collateral agent for the
lenders (the “Credit
Agreement”).
1. Exercise of
Warrant.
(a) Mechanics of
Exercise. Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after the Issuance
Date, in whole or in part (but not as to fractional shares), by
(i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the
Holder’s election to exercise this Warrant and (ii) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in
cash or wire transfer of immediately available funds. The Holder
shall not be required to surrender this Warrant in order to effect an exercise
hereunder, provided that this
Warrant is surrendered to the Company by the second Trading Day following the
date on which the Company has received each of the Exercise Notice and the
Aggregate Exercise Price (the “Exercise Delivery
Documents”). On or before the first Trading Day following the
date on which the Company has received the Exercise Delivery Documents, the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent for the Common Stock (the “Transfer
Agent”). The Company shall deliver any objection to the
Exercise Delivery Documents on or before the second Trading Day following the
date on which the Company has received all of the Exercise Delivery
Documents. In the event of any discrepancy or dispute, the records of
the Company shall be controlling and determinative in the absence of manifest
error. On or before the third Trading Day following the date on which
the Company has received all of the Exercise Delivery Documents and after the
Company shall have received this Warrant, the Company shall, (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program (the “FAST Program”) and so long as
the certificates therefor are not required to bear a legend regarding
restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (Y), if the
Transfer Agent is not participating in the FAST Program or if the certificates
are required to bear a legend regarding restriction on transferability, issue
and dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon proper
delivery of the Exercise Delivery Documents, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares, as the case may
be. If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented
by this Warrant submitted for exercise is greater than the number of Warrant
Shares being acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than five Trading Days after any exercise and
at its own expense, issue a new Warrant (in accordance with Section 8(e))
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. The
Company shall pay any and all taxes that may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder or an
affiliate thereof. The Holder shall be responsible for all other tax
liabilities that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof.
2
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $2.1594
per share of Common Stock, subject to adjustment as provided
herein.
(c) Failure to Timely Deliver
Shares. In addition to any other rights available to a Holder,
if the Company fails to deliver to the Holder a certificate representing Warrant
Shares by the third Trading Day after the date on which delivery of such
certificate is required by this Warrant, and if after such third Trading Day the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
that the Holder anticipated receiving from the Company, then the Company shall,
within three Trading Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased less the Exercise Price (the “Buy-In Price”), at which point
the Company’s obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times
(B) the Closing Price on the date of the event giving rise to the Company’s
obligation to deliver such certificate.
(d) Cashless Exercise.
Notwithstanding
anything contained herein to the contrary, the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of shares of Common Stock determined according to the
following formula:
|
Net
Number =
|
(A x B) - (A x C)
|
|
B
|
For
purposes of the foregoing formula:
|
|
A
|
=
|
the
total number of shares with respect to which this Warrant is then being
exercised.
|
|
|
B
|
=
|
the
Fair Market Value of the shares of Common
Stock.
|
|
|
C
|
=
|
the
Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.
|
(e) No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share that the Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise
Price.
2. Adjustment of Exercise Price
and Number of Warrant Shares. The Exercise Price and the
number of Warrant Shares shall be adjusted from time to time as
follows:
3
(a) Adjustment upon Subdivision
or Combination of Shares of Common Stock. If the Company at
any time on or after the Loan Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of Warrant Shares will be proportionately increased. If
the Company at any time on or after the Loan Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased. Any
adjustment under this Section 2(a) shall become effective at the close of
business on the date the subdivision or combination becomes
effective.
(b) Other
Events. If any event occurs of the type contemplated by the
provisions of Section 2(a) 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 to any of the
holders of the Company’s Common Stock other than pursuant to the Company's stock
incentive plan for employees), then the Company’s Board of Directors will make
an appropriate adjustment in the Exercise Price and the number of Warrant Shares
so as to protect the rights of the Holder; provided, that no
such adjustment pursuant to this Section 2(b) will increase the Exercise
Price or decrease the number of Warrant Shares as otherwise determined pursuant
to this Section 2(b).
(c) Adjustment for Issuance of
Additional Securities in Certain Dilutive Issuances. If the
Company at any time prior to the fourth anniversary of the Issuance Date while
this Warrant, or any portion hereof, remains outstanding shall (i) issue
Securities with Respect to a Debt or Equity Conversion, then upon such issuance
the number of Warrant Shares issuable upon exercise of this Warrant shall be
increased, concurrently with such issuance, such that the issuance of Securities
with Respect to a Debt of Equity Conversion shall have no dilutive effect upon
the percentage of Common Stock (measured on a fully diluted basis) that would be
held by the Holder upon the exercise of the Warrant Shares as of the date
hereof, or (ii) issue Other Additional Securities in one or more issuances
such that the percentage of the Common Stock (measured on a fully diluted basis)
that would be held by the Holder upon the exercise of the Warrant Shares as of
the date hereof would be reduced by greater than ten percent (10%) upon such
issuance of Other Additional Securities, then the number of Warrant Shares
issuable upon exercise of this Warrant shall be increased, concurrently with
such issuance, such that the dilutive effect would not exceed ten percent (10%)
and the Exercise Price shall be proportionately decreased.
3. Rights Upon Distribution of
Assets. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case:
4
(a) any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Fair
Market Value of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined in
good faith by the Company’s Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the Fair Market Value of
the shares of Common Stock on the Trading Day immediately preceding such record
date; and
(b) the
number of Warrant Shares shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution multiplied by the reciprocal
of the fraction set forth in the immediately preceding paragraph (a); provided, that in the
event that the Distribution is of shares of Common Stock or Common Stock of a
company whose common shares are traded on a national securities exchange or a
national automated quotation system (“Other Shares of Common
Stock”), then the Holder may elect to receive a warrant to purchase Other
Shares of Common Stock in lieu of an increase in the number of Warrant Shares,
the terms of which shall be identical to those of this Warrant, except that such
warrant shall be exercisable into the number of shares of Other Shares of Common
Stock that would have been payable to the Holder pursuant to the Distribution
had the Holder exercised this Warrant immediately prior to such record date and
with an aggregate Exercise Price equal to the product of the amount by which the
Exercise Price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).
4. Purchase Rights; Fundamental
Transactions.
(a) Purchase
Rights. In addition to any adjustments pursuant to
Section 2 above, if at any time prior to the Expiration Date the Company
grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the
Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase
Rights.
5
(b) Fundamental
Transactions. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon
consummation of the Fundamental Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon exercise of this
Warrant at any time after the consummation of the Fundamental Transaction, in
lieu of the shares of the Common Stock (or other securities, cash, assets or
other property purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction), such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription
rights), if any, that the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction had this Warrant been exercised
immediately prior to such Fundamental Transaction, as adjusted in accordance
with the provisions of this Warrant. In addition to and not in
substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are
entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a “Corporate Event”), the Company
shall notify the Holders of at least ten (10) Business Days prior to the
Closing of the Fundamental Transaction and shall make appropriate
provision to insure that the Holder will receive upon an exercise of this
Warrant contemporaneously with consummation of the Fundamental Transaction, in
lieu of the shares of the Common Stock (or other securities, cash, assets or
other property) purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction, such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had the Warrant been exercised immediately prior
to such Fundamental Transaction. The provisions of this
Section shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events and shall be applied without regard to any
limitations on the exercise of this Warrant.
5. Noncircumvention. The
Company covenants and agrees that the Company will not, by amendment of its
Certificate of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the
holder. Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant and (iii)
shall, so long as any of the warrants are outstanding, take all action necessary
to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of the warrants,
the number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of the warrants then outstanding (without regard to any
limitations on exercise).
6. Reservation of Warrant
Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of shares of Common Stock which are then issuable and deliverable upon
the exercise of this entire Warrant, free from preemptive or any other
contingent purchase rights of Persons other than the Holder (taking into account
the adjustments and restrictions in Section 2). Such reservation
shall comply with the provisions of Section 1. The Company
covenants that all shares of Common Stock so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such actions as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which
the Common Stock may be listed.
6
7. Warrant Holder Not Deemed a
Stockholder. Except as otherwise specifically provided herein,
the Holder, solely in such Person’s capacity as a holder of this Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person’s capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company.
8. Registration and Reissuance
of Warrants.
(a) Registration of Warrant
Shares. The Company agrees to provide mandatory registration
rights for the resale of the Warrant Shares under the Act on the terms and
subject to the conditions set forth in the Registration Rights Agreement between
the Company and the Holder.
(b) Transfer of
Warrant. This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company, except as may
otherwise be required by applicable securities laws. Subject to
applicable securities laws, if this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company together with all applicable
transfer taxes, whereupon the Company will forthwith issue and deliver upon the
order of the Holder a new Warrant (in accordance with Section 8(e)),
registered as the Holder may request, representing the right to purchase the
number of Warrant Shares being transferred by the Holder and, if less then the
total number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 8(e)) to the Holder
representing the right to purchase the number of Warrant Shares not being
transferred.
(c) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form or
the provision of reasonable security by the Holder to the Company and, in the
case of mutilation, upon surrender and cancellation of this Warrant, the Company
shall execute and deliver to the Holder a new Warrant (in accordance with
Section 8(e)) representing the right to purchase the Warrant Shares then
underlying this Warrant.
7
(d) Exchangeable for Multiple
Warrants. Subject to Section 8(b), this Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company together with all applicable transfer taxes, for a new Warrant or
Warrants (in accordance with Section 8(e)) representing in the aggregate
the right to purchase the number of Warrant Shares then underlying this Warrant,
and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the Holder at the time of such
surrender; provided, however, that the
Company shall not be required to issue Warrants for fractional shares of Common
Stock hereunder.
(e) Issuance of New
Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant and to the extent permitted by
law, such new Warrant shall (i) be of like tenor with this Warrant,
(ii) represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a
new Warrant being issued pursuant to Section 8(b),(c) or (d), the Warrant
Shares designated by the Holder which, when added to the number of shares of
Common Stock underlying the other new Warrants issued in connection with such
issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) have an issuance date, as indicated on the face of such new
Warrant which is the same as the Issuance Date and (iv) have the same rights and
conditions as this Warrant.
9. Notices. Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with the information set forth
in the Warrant Register. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including,
in reasonable detail, a description of such action and the reason or reasons
therefore. Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) immediately (and in any
event, no later than five business days) upon any adjustment of the Exercise
Price, setting forth in reasonable detail, and certifying, the calculation of
such adjustment and (ii) at least 10 days prior to the date on which the
Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants,
issuances or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property to holders of shares of Common
Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation and, in any event, at least twenty (20)
days prior to the consummation of any Fundamental Transaction; provided, that in
each case, such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.
10. Amendment and
Waiver. Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Required Holders;
provided, that except as provided by Section 2, no such action may increase the
Exercise Price of any Warrant or decrease the number of shares or class of stock
obtainable upon exercise of any Warrant without the written consent of the
Holder. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the Warrants then
outstanding.
8
11. Governing
Law. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.
12. Construction;
Headings. This Warrant shall be deemed to be jointly drafted
by the Company and the Holder and shall not be construed against any person as
the drafter hereof. The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Warrant.
13. Dispute
Resolution. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within two Trading Days of receipt of the Exercise Notice giving rise
to such dispute, as the case may be, to the Holder. If the Holder and
the Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within five Trading Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the
Company shall, within two Trading Days submit via facsimile (a) the disputed
determination of the Exercise Price to an independent, reputable investment bank
selected by the Company and approved by the Holder (which consent shall not be
unreasonably withheld or delayed) or (b) the disputed arithmetic calculation of
the Warrant Shares to the Company’s independent, outside
accountant. The Company shall cause the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than 10 Trading
Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error. The expenses of the investment bank and
accountant will be borne by the Company unless the investment bank or accountant
determines that the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares by the Holder was incorrect, in which case the
expenses of the investment bank and accountant will be borne by the
Holder.
14. Remedies, Other Obligations,
Breaches and Injunctive Relief. The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the Credit Agreement, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder to pursue actual damages (but
excluding punitive or consequential damages) for any failure by the Company to
comply with the terms of this Warrant. The Company acknowledges that
a breach by it of its obligations hereunder may cause irreparable harm to the
Holder and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any
such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to seek an injunction restraining
any breach. Notwithstanding the foregoing, the absence of an
effective registration statement relating to the issuance of Warrant Shares upon
exercise of the Warrant shall not provide the Holder with the right to
net-settle this Warrant in cash.
9
15. Binding Effect on
Successors. This Warrant shall be binding upon any corporation
succeeding the Company by merger or consolidation, and all of the obligations of
the Company relating to the Warrant Shares issuable upon the exercise of this
Warrant shall be as set forth in the Company’s Articles of Incorporation and the
Company’s Bylaws (each as amended from time to time) and shall survive the
exercise and termination of this Warrant and all of the covenants and agreements
herein and in such other documents and instruments of the Company shall inure to
the benefit of the successors and assigns of the Holder. The Company
will, at the time of the exercise of this Warrant, in whole or in part, upon
request of the Holder but at the Company’s expense, acknowledge in writing its
continuing obligation to the Holder in respect of any rights to which the Holder
shall continue to be entitled after such exercise in accordance with this
Warrant; provided, that the failure of the Holder to make any such request shall
not affect the continuing obligation of the Company to the Holder in respect of
such rights.
16. Notices: All
notices and other communications hereunder shall be in writing and shall be
delivered by facsimile where confirmation of good transmission or receipt by the
receiving party’s receiver is documented, or personally delivered by hand or by
reputable overnight courier or mailed by first class certified or registered
mail, postage prepaid, as follows:
If to the
Company:
Palm
Harbor Homes, Inc.
15303
Dallas Parkway, Suite 800
Addison,
TX 75001-4600
Attn: Ms.
Kelly Tacke
Facsimile:
(972) 764-9018
With a
copy to (which copy shall not constitute notice):
Locke
Lord Bissell & Liddell LLP
2200 Ross
Avenue, Suite 2200
Dallas,
TX 75201
Attn: Gina
E. Betts, Esq.
Facsimile:
(214) 756-8515
If to
Holder:
Virgo –
Magnolia, LP
Name: Bob
Racusin
Address: 667
Madison Avenue, Fl 11
New York,
NY 10065
Attn: Bob
Racusin
Facsimile: (646) 619-4035
With a
copy to (which copy shall not constitute notice):
10
Morrison & Foerster
LLP
425
Market Street
San
Francisco, CA 94105
Attn:
Robert Townsend, Esq.
Facsimile:
(415) 268-7522
17. Certain
Definitions. For purposes of this Warrant, the following terms
shall have the following meanings:
(a) “Act” means the Securities Act
of 1933, as amended.
(b) “Aggregate Exercise Price” has
the meaning set forth in Section 1(a).
(c) “Buy-In Price” has the meaning
set forth in Section 1(c).
(d) “Change of Control” means any
Fundamental Transaction following which the holders of the Company’s voting
power immediately prior to such Fundamental Transaction do not, immediately
thereafter, hold, directly or indirectly, voting power of the surviving or
successor entity or entities sufficient to elect a majority of the members of
the board of directors (or their equivalent if other than a corporation) of such
entity or entities.
(e) “Common Stock” means
(i) the Company’s shares of Common Stock, $0.001 par value per share, and
(ii) any capital share into which such Common Stock shall have been changed
or any share capital resulting from a reclassification of such Common
Stock.
(f) “Company” has the meaning set
forth in the introductory paragraph.
(g) “Convertible Securities” means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.
(h) “Corporate Event” has the
meaning set forth in Section 4(b).
(i)
“Credit Agreement”
has the meaning set forth in the introductory paragraph.
(j)
“Distribution” has the
meaning set forth in Section 1(a).
(k) “DTC” has the meaning set forth
in Section 3.
(l)
“Eligible Market” means the
Principal Market, The New York Stock Exchange, Inc., the NYSE Amex LLC, The
Nasdaq Stock Market, or the OTC Bulletin Board®.
(m) “Exercise Delivery Documents”
has the meaning set forth in Section 1(a).
(n) “Exercise Notice” has the
meaning set forth in Section 1(a).
(o) “Exercise Price” has the
meaning set forth in Section 1(b).
11
(p) “Expiration Date” means the
fifth anniversary of the Issuance Date or, if such date falls on a day other
than a Trading Day or on which trading does not take place on the Principal
Market (a “Holiday”),
the next date that is not a Holiday.
(q) “Fair Market Value” means with
respect to a Warrant Share or a shares of Common Stock:
(i) If
traded on a securities exchange or the Nasdaq National Market, the Fair Market
Value shall be the closing price of the Common Stock of the Company on such
exchange or market reported for the business day immediately before Holder
delivers its Exercise Notice to the Company.
(ii) If
actively traded over-the-counter, the Fair Market Value shall be deemed to be
the average of the closing bid prices over the 30-day period ending immediately
prior to the applicable date of valuation.
(iii) If
there is no active public market, the Fair Market Value shall be the Fair Market
Value as mutually determined by the Company and the Required
Holders. If the Company and the Required Holders are unable to agree
upon the Fair Market Value of such security, then such dispute shall be resolved
pursuant to Section 13 with the term “Fair Market Price” being substituted for
the term “Exercise Price.”
(r) “FAST Program” has the meaning
set forth in Section 1(a).
(s) “Fundamental Transaction” means
that the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into another Person,
(ii) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company to another Person,
(iii) allow another Person to make a purchase (other than in a firm commitment
public offering of equity securities by the Company), tender or exchange offer
that is accepted by the holders of more than the 50% of either the outstanding
shares of Common Stock (not including any shares of Common Stock held by the
Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), (iv)
consummate a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person whereby such other Person acquires more than
the 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to, such stock
purchase agreement or other business combination), (v) reorganize, recapitalize
or reclassify its Common Stock or (vi) any “person” or “group” (as these terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or
shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock, other than in connection
with a firm commitment underwritten public offering of the Company’s equity
securities.
(t) “Holder” has the meaning set
forth in the introductory paragraph.
(u) “Issuance Date” has the meaning
set forth in the introductory paragraph.
12
(v) “Loan Date” has the meaning set
forth in the introductory paragraph.
(w) “Options” means any rights,
warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.
(x) “Other Additional Securities”
means any shares of Common Stock or Options issued by the Company other than
issuances of Securities with Respect to a Debt or Equity Conversion including,
without limitation, issuances of Common Stock or Options to (i) employees
or directors of, or consultants or advisors to, the Company or any of its
affiliates pursuant to a plan, agreement or arrangement, (ii) banks,
equipment lessors or other financial institutions, or to real property lessors,
pursuant to a debt financing, equipment leasing or real property leasing
transaction, and (iii) any parties in connection with the acquisition of
another Person by the Company by merger, purchase of substantially all of the
assets or other reorganization or pursuant to any partnership, joint venture,
collaboration or similar agreement or arrangement.
(y) “Other Shares of Common Stock”
has the meaning set forth in Section 3(b).
(z) “Parent Entity” of a Person
means an entity that, directly or indirectly, controls the applicable Person and
whose Common Stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the
date of consummation of the Fundamental Transaction.
(aa) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.
(bb) “Principal Market” means the
Nasdaq Global Market.
(cc)
“Purchase Rights” has
the meaning set forth in Section 4(a).
(dd) “Required Holders” means the
holders of the Warrants representing at least a majority of shares of Common
Stock underlying the Warrants then outstanding.
(ee) “Securities with Respect to a Debt or
Equity Conversion” means shares of Common Stock, Options or Convertible
Securities issued upon conversion of any securities of the Company.
(ff) “Successor Entity” means the
Person (or, if so elected by the Required Holders, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the Person (or, if so
elected by the Required Holders, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
13
(gg) “Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York Time).
(hh) “Transfer Agent” has the
meaning set forth in Section 1(a).
(ii) “Warrant” has the meaning set
forth in the introductory paragraph.
(jj) “Warrant Shares” has the
meaning set forth in the introductory paragraph.
[Signature
Page Follows]
14
IN WITNESS WHEREOF, the
Company has caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.
|
PALM
HARBOR HOMES, INC.
|
||
|
By:
|
/s/ Larry Keener | |
|
|
Name: Larry Keener
|
|
|
|
Title: CEO | |
Signature Page to Warrant to
Purchase Common Stock
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
PALM
HARBOR HOMES, INC.
The
undersigned holder hereby exercises the right to purchase _________________ of
the shares of Common Stock (“Warrant Shares”) of Palm
Harbor Homes, Inc., a Florida corporation (the “Company”), evidenced by the
attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Exercise. [The
Holder intends to pay the sum of $___________________ to the Company in
accordance with the terms of the Warrant in connection with the exercise of the
Warrant for ________ Warrant Shares.] [The Holder hereby elects to
make a cashless exercise.]
2. Delivery of Warrant
Shares. The Company shall deliver to the holder __________
Warrant Shares in accordance with the terms of the Warrant.
|
Date:
_______________ __, ______
|
|
Name
of Registered Holder
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
A-1
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice.
|
PALM
HARBOR HOMES, INC.
|
||
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By:
|
||
|
Name:
|
||
|
Title:
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A-2