Exhibit 10.2
THIS WARRANT IS NOT EXERCISABLE
UNLESS AND UNTIL CERTAIN SHAREHOLDER APPROVALS HAVE BEEN OBTAINED
AS FURTHER DESCRIBED IN THIS WARRANT. NEITHER THIS WARRANT, NOR THE
COMMON STOCK WHICH MAY BE PURCHASED HEREUNDER, MAY BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
(1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS .
Date of this Warrant:
August 18, 2009
X-RITE,
INCORPORATED
Common Stock Purchase
Warrant
X-Rite, Incorporated, a Michigan
corporation (the “ Company ”), for value
received, hereby certifies that
[ ]
, a
[ ]
(the “ Holder ”), subject to the terms and
conditions hereof, shall be entitled to purchase from the Company,
at any time and from time to time after the Initial Exercise Date
(as defined below) and on or prior to the close of business on
August 18, 2019 (the “ Expiration Date ”),
[ ( )]
fully paid and nonassessable shares (individually, a “
Warrant Share ” and collectively, the “
Warrant Shares ”) of common stock, par value $0.10 per
share, of the Company (the “ Common Stock ”), at
a price per share equal to the Exercise Price. The number of
Warrant Shares and the Exercise Price are subject to adjustment as
provided herein, and all references to “Common Stock”
and “Exercise Price” herein shall be deemed to include
any such adjustment or series of adjustments.
This warrant (this “
Warrant ”) is being issued by the Company to the
Holder in connection with the transactions contemplated by that
certain Exchange Agreement, dated as of August 18, 2009 by and
among the Company, the Holder and the other parties thereto (the
“ Exchange Agreement ”). The following terms
used herein shall have the meanings set forth below when used in
this Warrant:
“ Affiliate ”
means, with respect to any specified Person, any other Person
directly or indirectly controlling, controlled by, or under common
control with, such specified Person. The term “
control ” (including, with correlative meanings, the
terms “ controlling ”, “ controlled
by ” and “ under common control with
”), when used with respect to a specified Person, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such specified
Person, whether through the ownership of voting securities, by
contract, or otherwise.
“ Cash Exercise ”
has the meaning set forth in Section 1.2 .
“ Exercise by Net Share
Settlement ” has the meaning set forth in
Section 1.3 .
“ Exercise Price
” means $0.01 per share, subject to all adjustments from time
to time pursuant to the provisions of Section 6
hereof.
“ Fair Market Value
” means
(i) in the case of cash, the amount
thereof;
(ii) in the case of shares of stock
where, at least 30 days prior to the issuance thereof, other shares
of the same class had been listed NASDAQ, the volume-weighted
average price of such stock for the five consecutive trading days
immediately preceding the day as of which Fair Market Value is
being determined;
(iii) in the case of shares of stock
where, at least thirty (30) days prior to the issuance
thereof, other shares of the same class had not been listed on
NASDAQ (or another U.S. national securities exchange that is the
primary market for the trading of the Common Stock), but had been
listed in the over-the-counter market as reported by Pink Sheets
LLC or similar organization, the volume-weighted average price of
such stock for the five consecutive trading days immediately
preceding the day as of which Fair Market Value is being
determined;
(iv) in the case of securities not
covered by clause (ii) or (iii) above and in the case of
other property not covered by clause (i), (ii) or
(iii) above, the Fair Market Value of such securities or other
property, as the case may be, shall be determined by an Independent
Financial Expert appointed for such purpose, using one or more
valuation methods that the Independent Financial Expert in its best
professional judgment determines to be most appropriate, assuming,
in the case of securities, such securities are fully distributed
and in each case, such securities or other property are to be sold
in an arm’s-length transaction and there was no compulsion on
the part of any party to such sale to buy or sell and taking into
account all relevant factors.
“ HSR Act ” has
the meaning set forth in Section 1.1 .
“ HSR Threshold ”
has the meaning set forth in Section 1.1 .
“ Independent Financial
Expert ” means a nationally recognized investment banking
firm mutually agreed by the Company and the Holder, which firm does
not have a material financial interest or other material economic
relationship with either the Company or Holder or their Affiliates.
If the Company and Holder are unable to agree on an Independent
Financial Expert, the Company and Holder shall each choose promptly
a separate Independent Financial Expert and such two Independent
Financial Experts shall choose promptly a third Independent
Financial Expert to determine the Market Price.
“ Initial Exercise Date
” means the date, if any, that Shareholder Approval is
obtained (it being understood that if Shareholder Approval is not
obtained at the Shareholder Meeting, that there shall be no Initial
Exercise Date and this Warrant shall automatically be cancelled as
provided in Section 1.1(b) ).
“ Liquidity Event
” has the meaning set forth in Section 7
.
“ Market Price ”
means, as of any date, (i) so long as the Common Stock
continues to be traded on NASDAQ on such date, the last reported
sale price of the Common Stock on the trading day immediately prior
to such date on NASDAQ and (ii) if the Common Stock of the
Company is not traded on NASDAQ on such date, the closing sale
price of the Common Stock on the trading day immediately prior to
such date as reported in the composite transactions for the
principal U.S. national securities exchange on which the Common
Stock is so listed or quoted, or, if no closing sale price is
reported, the last reported sale price on the principal U.S.
national securities exchange on which the Common Stock is so listed
or quoted on the trading day immediately prior to such date, or if
the Common Stock is not so listed or quoted on a U.S. national
securities exchange, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by Pink Sheets LLC or
similar organization on the trading day immediately prior to such
date, or, if that bid price is not available, the market price of
the Common Stock on the trading day immediately prior to such date
as determined by an Independent Financial Expert (as selected
pursuant to its definition) retained by the Corporation for this
purpose, using one or more
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valuation methods that the Independent Financial
Expert in its best professional judgment determines to be most
appropriate, assuming such securities are fully distributed and are
to be sold in an arm’s-length transaction and there was no
compulsion on the part of any party to such sale to buy or sell and
taking into account all relevant factors.
All references herein to the
“closing sale price” and “last reported sale
price” of the Common Stock on NASDAQ shall be such closing
sale price and last reported sale price as reflected on the website
of NASDAQ (http://www.nasdaq.com).
“ NASDAQ ” means
any national stock exchanges now or hereafter maintained by NASDAQ,
including, without limitation, the NASDAQ Global Select Market, the
NASDAQ Global Market and the NASDAQ Capital Market.
“ Securities Act
” means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated
thereunder.
“ Shareholder Approval
” means the approval of the Shareholder Proposal by the
majority of the votes cast by holders of the Common Stock entitled
to vote at the Shareholder Meeting.
“ Shareholder Meeting
” means the special meeting of the holders of Common Stock of
the Company called for the purpose of approving the Shareholder
Proposal, and any adjournments or postponements thereof.
“ Shareholder Proposal
” means the Company’s proposal, and in accordance with
the Exchange Agreement, to the Company’s shareholders to
approve the issuance of shares of Common Stock upon exercise of
this Warrant and the other warrants issued pursuant to the Exchange
Agreement.
1. Exercise of Warrants
.
1.1 General Exercise . This
Warrant may be exercised in whole or in part by the Holder at any
time and from time to time after the Initial Exercise Date (if any)
and on or prior to the close of business on the Expiration Date and
(b) if Shareholder Approval is not obtained at the Shareholder
Meeting, this Warrant will automatically be cancelled as of 5:00
p.m. New York time on the date of the Shareholder Meeting;
provided, however, that if such exercise would result in the Holder
acquiring beneficial ownership of Common Stock (together with all
other Common Stock owned by the Holder at such time) with a value
of or in excess of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the “ HSR Act ”)
notification threshold applicable to the Holder (the “ HSR
Threshold ”), or with a value of or in excess of the
notification thresholds of applicable competition or merger control
laws of other jurisdictions applicable to the Holder (“
Foreign Thresholds ”), and no exemption to filing a
notice and report form under the HSR Act or applicable competition
or merger control laws of other jurisdictions, as the case may be,
are applicable, then only the exercise of such portion of this
Warrant, which when exercised does not exceed the HSR Threshold or
Foreign Thresholds, shall be exercised and the Purchase Form and/or
Notice of Exercise by Share Settlement shall be deemed to relate
only to such portion of this Warrant, in which case the exercise of
the remaining portion of this Warrant in excess of the HSR
Threshold or Foreign Thresholds shall not occur until the
expiration or early termination of the applicable waiting
periods.
1.2 Exercise for Cash . This
Warrant may be exercised (a “ Cash Exercise ”)
by delivering this Warrant to the Company at its principal
executive office, or at the office of its stock transfer agent, if
any, accompanied by (i) the “Purchase Form”
attached hereto as Exhibit A duly completed and executed on
behalf of the Holder and (ii) a payment to the Company in the
amount equal to the Exercise Price multiplied by the number of
Warrant Shares in respect of which this Warrant is then exercised,
plus all taxes required to be paid by the Holder, if any, pursuant
to Section 2 .
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1.3 Exercise by Net Share
Settlement . This Warrant may be exercised, in whole or in part
(a “ Exercise by Net Share Settlement ”), into
the number of Warrant Shares determined in accordance with this
Section 1.3 by delivering this Warrant to the Company
at its principal executive office, or at the office of its stock
transfer agent, if any, accompanied by (i) the “Notice
of Exercise by Net Share Settlement” attached hereto as
Exhibit B duly completed and executed on behalf of the
Holder and (ii) a payment to the Company for any taxes
required to be paid by the Holder, if any, pursuant to
Section 2 . In the event of an exercise by Net Share
Settlement, the Company shall issue to the Holder a number of
Warrant Shares (rounded to the nearest whole number) computed using
the following formula:
Where:
X = The net number of shares of
Common Stock to be issued to the Holder pursuant to the Exercise by
Net Share Settlement;
Y = The gross number of shares of
Common Stock in respect of which the Exercise by Net Share
Settlement is made;
A = The Market Price as of the
Exercise Date; and
B = The Exercise Price.
1.4 Issuance of Certificate(s);
Authorization . Upon surrender of this Warrant and full
compliance with each of the other requirements in
Section 1.2 , in the case of a Cash Exercise, and
Section 1.3 , in the case of an Exercise by Net Share
Settlement, the Company shall, promptly, either (i) issue and
cause to be delivered a certificate or certificates or
(ii) instruct its transfer agent to register in book entry
form, in either case to the Holder, or upon the written request of
the Holder, in and to such name or names as the Holder may
designate, a certificate or certificates (or book entry shares) for
the number of Warrant Shares issuable upon the Cash Exercise or the
Exercise by Net Share Settlement, as the case may be. Such
certificate or certificates (or book entry shares) shall not be
deemed to have been issued, and any person so designated to be
named therein shall not be deemed to have become or have any rights
of a holder of record of such Warrant Shares, until all
requirements set forth in Section 1.2 , in the case of
a Cash Exercise, and Section 1.3 , in the case of an
Exercise by Net Share Settlement, have been fully met by the
Holder. The certificate(s) (or book entry shares) representing the
Warrant Shares acquired upon the exercise of this Warrant shall
bear the restrictive legend substantially in the form set forth on
Exhibit C hereto; provided , that, upon the
reasonable request of the Holder, at any time, and from time to
time, when such legend is no longer required under the Securities
Act or applicable state laws, the Company shall promptly remove
such legend from any certificate representing the Warrant Shares
(or issue one or more new certificates representing such Warrant
Shares, which certificate(s) shall not contain a legend). The
Company hereby represents and warrants that any Common Stock issued
upon the exercise of this Warrant in accordance with the provisions
of Sections 1.2 and/or 1.3 will, immediately
following receipt of the Shareholder Approval, be duly and validly
authorized and issued, fully paid and nonassessable and free from
all taxes, liens and charges (other than liens or charges created
by the Holder or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Warrant
Shares so issued will be deemed to have been issued to the Holder
as of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in
accordance with the terms of this Warrant, notwithstanding that the
stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered
on such date.
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1.5 Full or Partial Exercise
. This Warrant shall be exercisable, at the election of the Holder,
either in full or in part and, in the event that this Warrant is
exercised in respec
