Warrant Agreement, Frontier Group Holdings, Inc., Dated as of April 30, 2020
Summary
A Warrant Agreement dated as of April 30, 2020, between Frontier Group Holdings, Inc., a corporation organized under the laws of Delaware, and the United States Department of the Treasury. The recitals state that Treasury provides financial assistance under a Payroll Support Program Agreement dated as of April 30, 2020, between Frontier Airlines, Inc. and Treasury, as permissible under Section 4112(a) of Title IV of the CARES Act. As compensation, the Company agreed to issue a promissory note to Treasury and warrants to purchase Common Stock determined under Schedule 1. Schedule 2 lists capitalization as of March 31, 2020, including 5,243,233 issued and outstanding shares of Voting Common Stock, and names Indigo Frontier Holdings, LLC among 5% and greater holders.
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Cite this document
“Warrant Agreement, Frontier Group Holdings, Inc., Dated as of April 30, 2020.”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/ust-frontier-warrantagreement-psp-bd8bc41558/
, SHA-256 094323182df7be265431ae4324195eba6b3ad5e99dbf7274103213ad54048ca8.Full text
WARRANT AGREEMENT
TABLE OF CONTENTS
Page
Article I
Closing
1.1 Issuance.............................................................................................................................. 1
1.2 Initial Closing; Warrant Closing Date. .............................................................................. 1
1.3 Interpretation...................................................................................................................... 2
Article II
Representations and Warranties
2.1 Representations and Warranties of the Company.............................................................. 3
Article III
Covenants
3.1 Commercially Reasonable Efforts ..................................................................................... 5
3.2 Expenses ............................................................................................................................ 6
3.3 Sufficiency of Authorized Common Stock........................................................................ 6
Article IV
Additional Agreements
4.1 Investment.......................................................................................................................... 6
4.2 Legends .............................................................................................................................. 7
4.3 Certain Transactions .......................................................................................................... 7
4.4 Transfer of Warrants and Warrant Shares.. ....................................................................... 7
4.5 Registration Rights............................................................................................................. 7
4.6 Voting of Warrant Shares ................................................................................................ 19
Article V
Miscellaneous
5.1 Survival of Representations and Warranties.................................................................... 19
5.2 Amendment...................................................................................................................... 20
5.3 Waiver of Conditions....................................................................................................... 20
5.4 Governing Law: Submission to Jurisdiction, Etc. ...................................................... 20
5.5 Notices ............................................................................................................................. 20
5.6 Definitions........................................................................................................................ 21
5.7 Assignment ...................................................................................................................... 21
5.8 Severability ...................................................................................................................... 21
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5.9 No Third Party Beneficiaries ........................................................................................... 22
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LIST OF ANNEXES
ANNEX A: FORM OF OPINION
ANNEX B: FORM OF WARRANT
SCHEDULE 1: WARRANT SHARES FORMULA
SCHEDULE 2: CAPITALIZATION
SCHEDULE 3: REQUIRED STOCKHOLDER APPROVALS
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INDEX OF DEFINED TERMS
Location of
Term Definition
Affiliate Annex B
Agreement Recitals
Appraisal Procedure Annex B
Board of Directors 2.1(g)
Business Combination Annex B
Business Day Annex B
Capitalization Date 2.1(b)
Closing 1.2(a)
Common Stock Annex B
Company Recitals
Company Reports 2.1(h)(i)
Exchange Act Annex B
Governmental Authority 5.6(a)
Holder 4.5(l)(i)
Indemnitee 4.5(h)(i)
Initial Closing 1.2(a)
IPO 4.5(r)
Lien 5.6(c)
Material Adverse Effect 5.6(d)
Organizational Documents 5.6(e)
Pending Underwritten Offering 4.5(m)
Piggyback Registration 4.5(b)(iv)
Promissory Note Recitals
register; registered; registration 4.5(l)(ii)
Registrable Securities 4.5(l)(iii)
Registration Expenses 4.5(l)(iv)
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415 4.5(l)(v)
SEC 2.1(i)
Securities Act Annex B
Selling Expenses 4.5(l)(vi)
Shelf Registration Statement 4.5(b)(ii)
Special Registration 4.5(j)
Stockholder Proposals 3.1(b)
Subsidiary 5.6(f)
Transfer 4.4
Treasury Recitals
Warrant Closing Date 1.2(a)
Warrants Recitals
Warrant Shares Annex B
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WARRANT AGREEMENT dated as of April 30, 2020 (this “Agreement”), between
Frontier Group Holdings, Inc., a corporation organized under the laws of Delaware (the
“Company”) and the UNITED STATES DEPARTMENT OF THE TREASURY (“Treasury”).
WHEREAS, the Company has requested that Treasury provide financial assistance to the
Recipient (as defined in the PSP Agreement) that shall exclusively be used for the continuation
of payment of employee wages, salaries, and benefits as is permissible under Section 4112(a) of
Title IV of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136 (Mar. 27,
2020), as the same may be amended form time to time (the “CARES Act”), and Treasury is
willing to do so on the terms and conditions set forth in the Payroll Support Program Agreement
dated as of April 30, 2020, between Frontier Airlines, Inc. and Treasury (the “PSP Agreement”);
and
WHEREAS, as appropriate compensation to the Federal Government of the United States
of America for the provision of financial assistance under the PSP Agreement, the Company has
agreed to issue a note to be repaid to Treasury on the terms and conditions set forth in the
promissory note dated as of April 30, 2020, issued by the Company, in the name of Treasury as
the holder (the “Promissory Note”) and agreed to issue in a private placement warrants to
purchase the number of shares of its Common Stock determined in accordance with Schedule 1
to this Agreement (the “Warrants”) to Treasury;
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as follows:
Article I
Closing
1.1 Issuance.
(a) On the terms and subject to the conditions set forth in this Agreement, the
Company agrees to issue to Treasury, on each Warrant Closing Date, Warrants for a number of
shares of Common Stock determined by the formula set forth in Schedule 1.
1.2 Initial Closing; Warrant Closing Date.
(a) On the terms and subject to the conditions set forth in this Agreement, the closing
of the initial issuance of the Warrants (the “Initial Closing”) will take place on or before the 90th
day after the Closing Date (as defined in the Promissory Note) or, if on the 90th day after the
Closing Date the principal amount of the Promissory Note is $0, the first date on which such
principal amount is increased. After the Initial Closing, the closing of any subsequent issuance
will take place on the date of each increase, if any, of the principal amount of the Promissory
Note (each subsequent closing, together with the Initial Closing, a “Closing” and each such date
a “Warrant Closing Date”).
(b) On each Warrant Closing Date, the Company will issue to Treasury a duly
executed Warrant or Warrants with an Exercise Price determined by the formula set forth in
paragraph (a) of Schedule 1 for a number of shares of Common Stock determined by the formula
set forth in paragraph (b) of Schedule 1, as evidenced by one or more certificates dated the
Warrant Closing Date and bearing appropriate legends as hereinafter provided for and in
substantially the form attached hereto as Annex B.
(c) On each Warrant Closing Date, the Company shall deliver to Treasury (i) a
written opinion from counsel to the Company (which may be internal counsel) addressed to
Treasury and dated as of such Warrant Closing Date, in substantially the form attached hereto as
Annex A and (ii) a certificate executed by the chief executive officer, president, executive vice
president, chief financial officer, principal accounting officer, treasurer or controller confirming
that the representations and warranties of the Company in this Agreement are true and correct
with the same force and effect as though expressly made at and as of such Warrant Closing Date
and the Company has complied with all agreements on its part to be performed or satisfied
hereunder at or prior to such Closing.
(d) On the initial Warrant Closing Date, the Company shall deliver to Treasury (i)
such customary certificates of resolutions or other action, incumbency certificates and/or other
certificates of the chief executive officer, president, executive vice president, chief financial
officer, principal accounting officer, treasurer or controller as Treasury may require evidencing
the identity, authority and capacity of each such officer thereof authorized to act as such officer
in connection with this Agreement and (ii) customary resolutions or evidence of corporate
authorization, secretary's certificates and such other documents and certificates (including
Organizational Documents and good standing certificates) as Treasury may reasonably request
relating to the organization, existence and good standing of the Company and any other legal
matters relating to the Company, this Agreement, the Warrants or the transactions contemplated
hereby or thereby.
1.3 Interpretation.
(a) When a reference is made in this Agreement to “Recitals,” “Articles,” “Sections,”
or “Annexes” such reference shall be to a Recital, Article or Section of, or Annex to, this
Warrant Agreement, unless otherwise indicated. The terms defined in the singular have a
comparable meaning when used in the plural, and vice versa. References to “herein”, “hereof”,
“hereunder” and the like refer to this Agreement as a whole and not to any particular section or
provision, unless the context requires otherwise. The table of contents and headings contained in
this Agreement are for reference purposes only and are not part of this Agreement. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they shall be deemed
followed by the words “without limitation.” No rule of construction against the draftsperson shall
be applied in connection with the interpretation or enforcement of this Agreement, as this
Agreement is the product of negotiation between sophisticated parties advised by counsel. All
references to “$” or “dollars” mean the lawful currency of the United States of America. Except
as expressly stated in this Agreement, all references to any statute, rule or regulation are to the
statute, rule or regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the section.
(b) Capitalized terms not defined herein have the meanings ascribed thereto in Annex
B.
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Article II
Representations and Warranties
2.1 Representations and Warranties of the Company. The Company represents and
warrants to Treasury that as of the date hereof and each Warrant Closing Date (or such other date
specified herein):
(a) Existence, Qualification and Power. The Company is duly organized or formed,
validly existing and, if applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, and the Company and each Subsidiary (a) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its
obligations under the this Agreement and the Warrants, and (b) is duly qualified and is licensed
and, as applicable, in good standing under the Laws of each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such qualification or
license, except, in each case referred to in clause (a)(i) or (b), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(b) Capitalization. The authorized capital stock of the Company, and the outstanding
capital stock of the Company (including securities convertible into, or exercisable or
exchangeable for, capital stock of the Company) as of the most recent fiscal month-end
preceding the date hereof (the “Capitalization Date”) is set forth in Schedule 2. The outstanding
shares of capital stock of the Company have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive rights, other than, if
applicable, those set forth on Schedule 3 (and were not issued in violation of any preemptive
rights). Except as provided in the Warrants, as of the date hereof, the Company does not have
outstanding any securities or other obligations providing the holder the right to acquire Common
Stock that is not reserved for issuance as specified on Schedule 2, and the Company has not
made any other commitment to authorize, issue or sell any Common Stock. Since the
Capitalization Date, the Company has not issued any shares of Common Stock, other than (i)
shares issued upon the exercise of stock options or delivered under other equity-based awards or
other convertible securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule 2 and (ii) shares disclosed on Schedule 2 as it may be updated by
written notice from the Company to Treasury in connection with each Warrant Closing Date.
Each holder of 5% or more of any class of capital stock of the Company and such holder’s
primary address are set forth in Schedule 2.
(c) Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company of this Agreement, except for such approvals, consents,
exemptions, authorizations, actions or notices that have been duly obtained, taken or made and in
full force and effect.
(d) Execution and Delivery; Binding Effect. This Agreement has been duly
authorized, executed and delivered by the Company. This Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in accordance with its
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terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other Laws affecting creditors’ rights generally and by general
principles of equity.
(e) The Warrants and Warrant Shares. Each Warrant has been duly authorized and,
when executed and delivered as contemplated hereby, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other Laws affecting creditors’ rights generally and by general principles of
equity. The Warrant Shares have been duly authorized and reserved for issuance upon exercise
of the Warrants and when so issued in accordance with the terms of the Warrants will be validly
issued, fully paid and non-assessable, subject, if applicable, to the approvals of its stockholders
set forth on Schedule 3.
(f) Authorization, Enforceability.
(i) The Company has the corporate power and authority to execute and
deliver this Agreement and the Warrants and, subject, if applicable, to the approvals of its
stockholders set forth on Schedule 3, to carry out its obligations hereunder and thereunder
(which includes the issuance of the Warrants and Warrant Shares). The execution,
delivery and performance by the Company of this Agreement and the Warrants and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate or other organizational action on the part of the
Company and its stockholders, and no further approval or authorization is required on the
part of the Company, subject, in each case, if applicable, to the approvals of its
stockholders set forth on Schedule 3.
(ii) The execution, delivery and performance by the Company of this
Agreement do not and will not (a) contravene the terms of its Organizational Documents,
(b) conflict with or result in any breach or contravention of, or the creation of any Lien
(as defined in the Promissory Note) under, or require any payment to be made under (i)
any material Contractual Obligation to which the Company is a party or affecting the
Company or the properties of the Company or any Subsidiary or (ii) any material order,
injunction, writ or decree of any Governmental Authority or any arbitral award to which
the Company or any Subsidiary or its property is subject or (c) violate any Law, except to
the extent that such violation could not reasonably be expected to have Material Adverse
Effect.
(iii) Such filings and approvals as are required to be made or obtained under
any state “blue sky” laws, and such filings and approvals as have been made or obtained,
no notice to, filing with, exemption or review by, or authorization, consent or approval
of, any Governmental Authority is required to be made or obtained by the Company in
connection with the execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the issuance of the Warrants
except for any such notices, filings, exemptions, reviews, authorizations, consents and
approvals the failure of which to make or obtain would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
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(g) Anti-takeover Provisions and Rights Plan. The Board of Directors of the
Company (the “Board of Directors”) has taken all necessary action, and will in the future take
any necessary action, to ensure that the transactions contemplated by this Agreement and the
Warrants and the consummation of the transactions contemplated hereby and thereby, including
the exercise of the Warrants in accordance with their terms, will be exempt from any anti-
takeover or similar provisions of the Company’s Organizational Documents, and any other
provisions of any applicable “moratorium”, “control share”, “fair price”, “interested stockholder”
or other anti-takeover laws and regulations of any jurisdiction, whether existing on the date
hereof or implemented after the date hereof. The Company has taken all actions necessary, and
will in the future take any necessary action, to render any stockholders’ rights plan of the
Company inapplicable to this Agreement and the Warrants and the consummation of the
transactions contemplated hereby and thereby, including the exercise of the Warrants by
Treasury in accordance with its terms.
(h) Reports. Since December 31, 2017, the Company and each Subsidiary has timely
filed all reports, registrations, documents, filings, statements and submissions, together with any
amendments thereto, that it was required to file with any Governmental Authority (the foregoing,
collectively, the “Company Reports”) and has paid all fees and assessments due and payable in
connection therewith, except, in each case, as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. As of their respective dates of filing,
the Company Reports complied in all material respects with all statutes and applicable rules and
regulations of the applicable Governmental Authority.
(i) Offering of Securities. Neither the Company nor any person acting on its behalf
has taken any action (including any offering of any securities of the Company under
circumstances which would require the integration of such offering with the offering of any of
the Warrants under the Securities Act, and the rules and regulations of the Securities and
Exchange Commission (the “SEC”) promulgated thereunder), which might subject the offering,
issuance or sale of any of the Warrants to Treasury pursuant to this Agreement to the registration
requirements of the Securities Act
(j) Brokers and Finders. No broker, finder or investment banker is entitled to any
financial advisory, brokerage, finder’s or other fee or commission in connection with this
Agreement or the Warrants or the transactions contemplated hereby or thereby based upon
arrangements made by or on behalf of the Company or any Subsidiary for which Treasury could
have any liability.
Article III
Covenants
3.1 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each of the parties will use
its commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable
laws, to enable consummation of the transactions contemplated hereby and shall use
commercially reasonable efforts to cooperate with the other party to that end.
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(b) If the Company is required to obtain any stockholder approvals set forth on
Schedule 3, then the Company shall comply with this Section 3.1(b). The Company shall call a
special meeting of its stockholders, as promptly as practicable following the Initial Closing, to
vote on proposals (collectively, the “Stockholder Proposals”) to amend the Company’s
Organizational Documents to increase the number of authorized shares of Common Stock to at
least such number as shall be sufficient to permit the full exercise of the Warrants for Common
Stock and comply with the other provisions of this Section 3.1(b). The Board of Directors shall
recommend to the Company’s stockholders that such stockholders vote in favor of the
Stockholder Proposals. In the event that the approval of any of the Stockholder Proposals is not
obtained at such special stockholders meeting, the Company shall include a proposal to approve
(and the Board of Directors shall recommend approval of) each such proposal at a meeting of its
stockholders no less than once in each subsequent six-month period beginning on September 30,
2020 until all such approvals are obtained or made.
3.2 Expenses. The Company shall pay (i) all reasonable out-of-pocket expenses
incurred by Treasury (including the reasonable fees, charges and disbursements of any counsel
for Treasury) in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the Warrants, any other agreements or documents executed
in connection herewith or therewith, or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), and (ii) all out-of-pocket expenses incurred by Treasury (including the
fees, charges and disbursements of any counsel for Treasury), in connection with the
enforcement or protection of its rights in connection with this Agreement and the Warrants, any
other agreements or documents executed in connected herewith or therewith, or any
amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), including all such out-of-
pocket expenses incurred during any workout, restructuring, negotiations or enforcement in
respect of such Warrant Agreement, Warrant and other agreements or documents executed in
connection herewith or therewith.
3.3 Sufficiency of Authorized Common Stock
(a) During the period from each Warrant Closing Date (or, if the approval of the
Stockholder Proposals is required, the date of such approval) until the date on which no Warrants
remain outstanding, the Company shall at all times have reserved for issuance, free of
preemptive or similar rights, a sufficient number of authorized and unissued Warrant Shares to
effectuate such exercise. Nothing in this Section 3.3 shall preclude the Company from satisfying
its obligations in respect of the exercise of the Warrants by delivery of shares of Common Stock
which are held in the treasury of the Company.
Article IV
Additional Agreements
4.1 Investment Purposes. Treasury acknowledges that the Warrants and the Warrant
Shares have not been registered under the Securities Act or under any state securities laws.
Treasury (a) is acquiring the Warrants pursuant to an exemption from registration under the
Securities Act solely for investment without a view to sell and with no present intention to
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distribute them to any person in violation of the Securities Act or any applicable U.S. state
securities laws; (b) will not sell or otherwise dispose of any of the Warrants or the Warrant
Shares, except in compliance with the registration requirements or exemption provisions of the
Securities Act and any applicable U.S. state securities laws; and (c) has such knowledge and
experience in financial and business matters and in investments of this type that it is capable of
evaluating the merits and risks of the Warrants and the Warrant Shares and of making an
informed investment decision.
4.2 Legends.
(a) Treasury agrees that all certificates or other instruments representing the Warrants
and the Warrant Shares will bear a legend substantially to the following effect:
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD
OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.”
(b) In the event that any Warrants or Warrant Shares (i) become registered under the
Securities Act or (ii) are eligible to be transferred without restriction in accordance with Rule
144 or another exemption from registration under the Securities Act (other than Rule 144A), the
Company shall issue new certificates or other instruments representing such Warrants or Warrant
Shares, which shall not contain the legend in Section 4.2(a) above; provided that Treasury
surrenders to the Company the previously issued certificates or other instruments.
4.3 Certain Transactions. The Company will not merge or consolidate with, or sell,
transfer or lease all or substantially all of its property or assets to, any other party unless the
successor, transferee or lessee party (or its ultimate parent entity), as the case may be (if not the
Company), expressly assumes the due and punctual performance and observance of each and
every covenant, agreement and condition of this Agreement and the Warrants to be performed
and observed by the Company.
4.4 Transfer of Warrants and Warrant Shares. Subject to compliance with
applicable securities laws, Treasury shall be permitted to transfer, sell, assign or otherwise
dispose of (“Transfer”) all or a portion of the Warrants or Warrant Shares at any time, and
the Company shall take all steps as may be reasonably requested by Treasury to facilitate
the Transfer of the Warrants and the Warrant Shares.
4.5 Registration Rights.
(a) Unless and until the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall have no obligation to comply with
the provisions of this Section 4.5; provided that the Company covenants and agrees that it shall
comply with this Section 4.5 as soon as practicable after the date that it becomes subject to such
reporting requirements.
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(b) Registration.
(i) Subject to the terms and conditions of this Agreement, the Company
covenants and agrees that as soon as practicable after the date that the Company becomes
subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act (and in
any event no later than 180 days thereafter), the Company shall prepare and file with the
SEC a Shelf Registration Statement covering the maximum number of Registrable
Securities (or otherwise designate an existing Shelf Registration Statement filed with the
SEC to cover the Registrable Securities) that may be issued pursuant to this Agreement
and any Warrants outstanding at that time, and, to the extent the Shelf Registration
Statement has not theretofore been declared effective or is not automatically effective
upon such filing, the Company shall use reasonable best efforts to cause such Shelf
Registration Statement to be declared or become effective and to keep such Shelf
Registration Statement continuously effective and in compliance with the Securities Act
and usable for resale of such Registrable Securities for a period from the date of its initial
effectiveness until such time as there are no Registrable Securities remaining (including
by refiling such Shelf Registration Statement (or a new Shelf Registration Statement) if
the initial Shelf Registration Statement expires). So long as the Company is a well-known
seasoned issuer (as defined in Rule 405 under the Securities Act) at the time of filing of
the Shelf Registration Statement with the SEC, such Shelf Registration Statement shall be
designated by the Company as an automatic Shelf Registration Statement.
Notwithstanding the foregoing, if on the date hereof the Company is not eligible to file a
registration statement on Form S-3, then the Company shall not be obligated to file a
Shelf Registration Statement unless and until it is so eligible and is requested to do so in
writing by Treasury.
(ii) Any registration pursuant to Section 4.5(b)(i) shall be effected by means
of a shelf registration on an appropriate form under Rule 415 under the Securities Act (a
“Shelf Registration Statement”). If Treasury or any other Holder intends to distribute any
Registrable Securities by means of an underwritten offering it shall promptly so advise
the Company and the Company shall take all reasonable steps to facilitate such
distribution, including the actions required pursuant to Section 4.5(d); provided that the
Company shall not be required to facilitate an underwritten offering of Registrable
Securities unless the total number of Warrant Shares and Warrants expected to be sold in
such offering exceeds, or are exercisable for, at least 20% of the total number of Warrant
Shares for which Warrants issued under this Agreement could be exercised (giving effect
to the anti-dilution adjustments in Warrants); and provided, further that the Company
shall not be required to facilitate more than two completed underwritten offerings within
any 12-month period. The lead underwriters in any such distribution shall be selected by
the Holders of a majority of the Registrable Securities to be distributed.
(iii) The Company shall not be required to effect a registration (including a
resale of Registrable Securities from an effective Shelf Registration Statement) or an
underwritten offering pursuant to Section 4.5(b): (A) with respect to securities that are
not Registrable Securities; or (B) if the Company has notified Treasury and all other
Holders that in the good faith judgment of the Board of Directors, it would be materially
detrimental to the Company or its securityholders for such registration or underwritten
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offering to be effected at such time, in which event the Company shall have the right to
defer such registration or offering for a period of not more than 45 days after receipt of
the request of Treasury or any other Holder; provided that such right to delay a
registration or underwritten offering shall be exercised by the Company (1) only if the
Company has generally exercised (or is concurrently exercising) similar black-out rights
against holders of similar securities that have registration rights and (2) not more than
three times in any 12-month period and not more than 90 days in the aggregate in any 12-
month period. The Company shall notify the Holders of the date of any anticipated
termination of any such deferral period prior to such date.
(iv) If during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other than a
registration pursuant to Section 4.5(b)(i) or a Special Registration, and the registration
form to be filed may be used for the registration or qualification for distribution of
Registrable Securities, the Company will give prompt written notice to Treasury and all
other Holders of its intention to effect such a registration (but in no event less than ten
days prior to the anticipated filing date) and will include in such registration all
Registrable Securities with respect to which the Company has received written requests
for inclusion therein within ten Business Days after the date of the Company’s notice (a
“Piggyback Registration”). Any such person that has made such a written request may
withdraw its Registrable Securities from such Piggyback Registration by giving written
notice to the Company and the managing underwriter, if any, on or before the fifth
Business Day prior to the planned effective date of such Piggyback Registration. The
Company may terminate or withdraw any registration under this Section 4.5(b)(iv) prior
to the effectiveness of such registration, whether or not Treasury or any other Holders
have elected to include Registrable Securities in such registration.
(v) If the registration referred to in Section 4.5(b)(iv) is proposed to be
underwritten, the Company will so advise Treasury and all other Holders as a part of the
written notice given pursuant to Section 4.5(b)(iv). In such event, the right of Treasury
and all other Holders to registration pursuant to Section 4.5(b) will be conditioned upon
such persons’ participation in such underwriting and the inclusion of such person’s
Registrable Securities in the underwriting if such securities are of the same class of
securities as the securities to be offered in the underwritten offering, and each such
person will (together with the Company and the other persons distributing their securities
through such underwriting) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company; provided
that Treasury (as opposed to other Holders) shall not be required to indemnify any person
in connection with any registration. If any participating person disapproves of the terms
of the underwriting, such person may elect to withdraw therefrom by written notice to the
Company, the managing underwriters and Treasury (if Treasury is participating in the
underwriting).
(vi) If either (x) the Company grants “piggyback” registration rights to one or
more third parties to include their securities in an underwritten offering under the Shelf
Registration Statement pursuant to Section 4.5(b)(ii) or (y) a Piggyback Registration
under Section 4.5(b)(iv) relates to an underwritten offering on behalf of the Company,
-9-
and in either case the managing underwriters advise the Company that in their reasonable
opinion the number of securities requested to be included in such offering exceeds the
number which can be sold without adversely affecting the marketability of such offering
(including an adverse effect on the per share offering price), the Company will include in
such offering only such number of securities that in the reasonable opinion of such
managing underwriters can be sold without adversely affecting the marketability of the
offering (including an adverse effect on the per share offering price), which securities
will be so included in the following order of priority: (A) first, in the case of a Piggyback
Registration under Section 4.5(b)(iv), the securities the Company proposes to sell,
(B) then the Registrable Securities of Treasury and all other Holders who have requested
inclusion of Registrable Securities pursuant to Section 4.5(b)(ii) or Section 4.5(b)(iv), as
applicable, pro rata on the basis of the aggregate number of such securities or shares
owned by each such person and (C) lastly, any other securities of the Company that have
been requested to be so included, subject to the terms of this Agreement; provided,
however, that if the Company has, prior to the date hereof, entered into an agreement with
respect to its securities that is inconsistent with the order of priority contemplated hereby
then it shall apply the order of priority in such conflicting agreement to the extent that
this Agreement would otherwise result in a breach under such agreement.
(c) Expenses of Registration. All Registration Expenses incurred in connection with
any registration, qualification or compliance hereunder shall be borne by the Company. All
Selling Expenses incurred in connection with any registrations hereunder shall be borne by the
holders of the securities so registered pro rata on the basis of the aggregate offering or sale price
of the securities so registered.
(d) Obligations of the Company. The Company shall use its reasonable best efforts,
for so long as there are Registrable Securities outstanding, to take such actions as are under its
control to not become an ineligible issuer (as defined in Rule 405 under the Securities Act) and
to remain a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) if it
has such status on the date hereof or becomes eligible for such status in the future. In addition,
whenever required to effect the registration of any Registrable Securities or facilitate the
distribution of Registrable Securities pursuant to an effective Shelf Registration Statement, the
Company shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC a prospectus supplement with respect to a
proposed offering of Registrable Securities pursuant to an effective registration
statement, subject to Section 4.5(e), keep such registration statement effective and keep
such prospectus supplement current until the securities described therein are no longer
Registrable Securities. The plan of distribution included in such registration statement
shall include, among other things, an underwritten offering, ordinary brokerage
transactions and transactions in which the broker-dealer solicits purchasers, block trades,
privately negotiated transactions, the writing or settlement of options or other derivative
transactions and any other method permitted pursuant to applicable law, and any
combination of any such methods of sale.
(ii) Prepare and file with the SEC such amendments and supplements to the
applicable registration statement and the prospectus or prospectus supplement used in
- 10 -
connection with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all securities covered by
such registration statement.
(iii) Furnish to the Holders and any underwriters such number of copies of the
applicable registration statement and each such amendment and supplement thereto
(including in each case all exhibits) and of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned or to be distributed by them.
(iv) Use its reasonable best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders or any managing
underwriter(s), to keep such registration or qualification in effect for so long as such
registration statement remains in effect, and to take any other action which may be
reasonably necessary to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such Holder; provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or jurisdictions.
(v) Notify each Holder of Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the applicable prospectus, as then in effect,
includes an untrue statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in light of
the circumstances then existing.
(vi) Give written notice to the Holders:
(A) when any registration statement filed pursuant to Section 4.5(b) or
any amendment thereto has been filed with the SEC (except for any amendment
effected by the filing of a document with the SEC pursuant to the Exchange Act)
and when such registration statement or any post-effective amendment thereto has
become effective;
(B) of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein or for additional
information;
(C) of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or the initiation of any proceedings for
that purpose;
(D) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the Common
Stock for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
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(E) of the happening of any event that requires the Company to make
changes in any effective registration statement or the prospectus related to the
registration statement in order to make the statements therein not misleading
(which notice shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made); and
(F) if at any time the representations and warranties of the Company
contained in any underwriting agreement contemplated by Section 4.5(d)(x) cease
to be true and correct.
(vii) Use its reasonable best efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of any registration statement
referred to in Section 4.5(d)(vi)(C) at the earliest practicable time.
(viii) Upon the occurrence of any event contemplated by Section 4.5(d)(v),
4.5(d)(vi)(E) or 4.5(e), promptly prepare a post-effective amendment to such registration
statement or a supplement to the related prospectus or file any other required document
so that, as thereafter delivered to the Holders and any underwriters, the prospectus will
not contain an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading. If the Company notifies the Holders in accordance with
Section 4.5(d)(vi)(E) to suspend the use of the prospectus until the requisite changes to
the prospectus have been made, then the Holders and any underwriters shall suspend use
of such prospectus and use their reasonable best efforts to return to the Company all
copies of such prospectus (at the Company’s expense) other than permanent file copies
then in such Holders’ or underwriters’ possession. The total number of days that any such
suspension may be in effect in any 12-month period shall not exceed 90 days. The
Company shall notify the Holders of the date of any anticipated termination of any such
suspension period prior to such date.
(ix) Use reasonable best efforts to procure the cooperation of the Company’s
transfer agent in settling any offering or sale of Registrable Securities, including with
respect to the transfer of physical stock certificates into book-entry form in accordance
with any procedures reasonably requested by the Holders or any managing
underwriter(s).
(x) If an underwritten offering is requested pursuant to Section 4.5(b)(ii),
enter into an underwriting agreement in customary form, scope and substance and take all
such other actions reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith or by the managing underwriter(s), if any,
to expedite or facilitate the underwritten disposition of such Registrable Securities, and in
connection therewith in any underwritten offering (including making members of
management and executives of the Company available to participate in “road shows”,
similar sales events and other marketing activities), (A) make such representations and
warranties to the Holders that are selling stockholders and the managing underwriter(s), if
any, with respect to the business of the Company and its subsidiaries, and the Shelf
Registration Statement, prospectus and documents, if any, incorporated or deemed to be
- 12 -
incorporated by reference therein, in each case, in customary form, substance and scope,
and, if true, confirm the same if and when requested, (B) use its reasonable best efforts to
furnish the underwriters with opinions and “10b-5” letters of counsel to the Company,
addressed to the managing underwriter(s), if any, covering the matters customarily
covered in such opinions and letters requested in underwritten offerings, (C) use its
reasonable best efforts to obtain “cold comfort” letters from the independent certified
public accountants of the Company (and, if necessary, any other independent certified
public accountants of any business acquired by the Company for which financial
statements and financial data are included in the Shelf Registration Statement) who have
certified the financial statements included in such Shelf Registration Statement,
addressed to each of the managing underwriter(s), if any, such letters to be in customary
form and covering matters of the type customarily covered in “cold comfort” letters, (D)
if an underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures customary in underwritten offerings (provided that Treasury
shall not be obligated to provide any indemnity), and (E) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the
Registrable Securities being sold in connection therewith, their counsel and the managing
underwriter(s), if any, to evidence the continued validity of the representations and
warranties made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company.
(xi) Make available for inspection by a representative of Holders that are
selling stockholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices where
normally kept, during reasonable business hours, financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers, directors and
employees of the Company to supply all information in each case reasonably requested
(and of the type customarily provided in connection with due diligence conducted in
connection with a registered public offering of securities) by any such representative,
managing underwriter(s), attorney or accountant in connection with such Shelf
Registration Statement.
(xii) Use reasonable best efforts to cause all such Registrable Securities to be
listed on each national securities exchange on which similar securities issued by the
Company are then listed or, if no similar securities issued by the Company are then listed
on any national securities exchange, use its reasonable best efforts to cause all such
Registrable Securities to be listed on such securities exchange as Treasury may designate.
(xiii) If requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s), if any,
promptly include in a prospectus supplement or amendment such information as the
Holders of a majority of the Registrable Securities being registered and/or sold in
connection therewith or managing underwriter(s), if any, may reasonably request in order
to permit the intended method of distribution of such securities and make all required
filings of such prospectus supplement or such amendment as soon as practicable after the
Company has received such request.
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(xiv) Timely provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
(e) Suspension of Sales. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may contain an untrue
statement of a material fact or omits or may omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that circumstances exist
that make inadvisable use of such registration statement, prospectus or prospectus supplement,
Treasury and each Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until Treasury and/or Holder has received copies of a supplemented or
amended prospectus or prospectus supplement, or until Treasury and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable, prospectus supplement
may be resumed, and, if so directed by the Company, Treasury and/or such Holder shall deliver
to the Company (at the Company’s expense) all copies, other than permanent file copies then in
Treasury and/or such Holder’s possession, of the prospectus and, if applicable, prospectus
supplement covering such Registrable Securities current at the time of receipt of such notice. The
total number of days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days. The Company shall notify Treasury prior to the anticipated termination of any
such suspension period of the date of such anticipated termination
(f) Termination of Registration Rights. A Holder’s registration rights as to any
securities held by such Holder shall not be available unless such securities are Registrable
Securities.
(g) Furnishing Information.
(i) Neither Treasury nor any Holder shall use any free writing prospectus (as
defined in Rule 405) in connection with the sale of Registrable Securities without the
prior written consent of the Company.
(ii) It shall be a condition precedent to the obligations of the Company to take
any action pursuant to Section 4.5(d) that Treasury and/or the selling Holders and the
underwriters, if any, shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registered offering of their
Registrable Securities.
(h) Indemnification.
(i) The Company agrees to indemnify each Holder and, if a Holder is a
person other than an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and each Person, if any, that controls a Holder within the
meaning of the Securities Act (each, an “Indemnitee”), against any and all losses, claims,
damages, actions, liabilities, costs and expenses (including reasonable fees, expenses and
disbursements of attorneys and other professionals incurred in connection with
investigating, defending, settling, compromising or paying any such losses, claims,
damages, actions, liabilities, costs and expenses), joint or several, arising out of or based
- 14 -
upon any untrue statement or alleged untrue statement of material fact contained in any
registration statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto or any documents incorporated therein
by reference or contained in any free writing prospectus (as such term is defined in Rule
405) prepared by the Company or authorized by it in writing for use by such Holder (or
any amendment or supplement thereto); or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, that the Company
shall not be liable to such Indemnitee in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense arises out
of or is based upon (A) an untrue statement or omission made in such registration
statement, including any such preliminary prospectus or final prospectus contained
therein or any such amendments or supplements thereto or contained in any free writing
prospectus (as such term is defined in Rule 405) prepared by the Company or authorized
by it in writing for use by such Holder (or any amendment or supplement thereto), in
reliance upon and in conformity with information regarding such Indemnitee or its plan
of distribution or ownership interests which was furnished in writing to the Company by
such Indemnitee for use in connection with such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto, or (B) offers or sales effected by or on behalf of
such Indemnitee “by means of” (as defined in Rule 159A) a “free writing prospectus” (as
defined in Rule 405) that was not authorized in writing by the Company.
(ii) If the indemnification provided for in Section 4.5(h)(i) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities, costs or
expenses referred to therein or is insufficient to hold the Indemnitee harmless as
contemplated therein, then the Company, in lieu of indemnifying such Indemnitee, shall
contribute to the amount paid or payable by such Indemnitee as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such proportion as is appropriate
to reflect the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand, and of the
Indemnitee, on the other hand, shall be determined by reference to, among other factors,
whether the untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company or by the Indemnitee and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission; the Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 4.5(h)(ii) were determined by pro rata
allocation or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 4.5(h)(i). No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from the Company if the Company was not guilty of such
fraudulent misrepresentation.
(i) Assignment of Registration Rights. The rights of Treasury to registration of
Registrable Securities pursuant to Section 4.5(b) may be assigned by Treasury to a transferee or
- 15 -
assignee of Registrable Securities in connection with a transfer of a total number of Warrant
Shares and/or Warrants exercisable for at least 20% of the total number of Warrant Shares for
which Warrants issued and to be issued under this Agreement could be exercised (giving effect
to the anti-dilution adjustments in Warrants); provided, however, the transferor shall, within ten
days after such transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the number and type of Registrable Securities that are being assigned.
(j) Clear Market. With respect to any underwritten offering of Registrable Securities
by Treasury or other Holders pursuant to this Section 4.5, the Company agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration) any public sale or
distribution, or to file any Shelf Registration Statement (other than such registration or a Special
Registration) covering, in the case of an underwritten offering of Common Stock or Warrants,
any of its equity securities, or, in each case, any securities convertible into or exchangeable or
exercisable for such securities, during the period not to exceed 30 days following the effective
date of such offering. The Company also agrees to cause such of its directors and senior
executive officers to execute and deliver customary lock-up agreements in such form and for
such time period up to 30 days as may be requested by the managing underwriter. “Special
Registration” means the registration of (A) equity securities and/or options or other rights in
respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or (B) shares of
equity securities and/or options or other rights in respect thereof to be offered to directors,
members of management, employees, consultants, customers, lenders or vendors of the
Company or Company Subsidiaries or in connection with dividend reinvestment plans.
(k) Rule 144; Rule 144A. With a view to making available to Treasury and Holders
the benefits of certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to use its
reasonable best efforts to:
(i) (A) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Exchange Act, and (B) if at any time the Company is
not required to file such reports, make available, upon the request of any Holder, such
information necessary to permit sales pursuant to Rule 144A (including the information
required by Rule 144A(d)(4) under the Securities Act);
(ii) so long as Treasury or a Holder owns any Registrable Securities, furnish
to Treasury or such Holder forthwith upon request: a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 under the Securities Act,
and of the Exchange Act; a copy of the most recent annual or quarterly report of the
Company; and such other reports and documents as Treasury or Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to sell any such
securities to the public without registration; provided, however, that the availability of the
foregoing reports on the EDGAR filing system of the SEC will be deemed to satisfy the
foregoing delivery requirements; and
(iii) take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act.
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(l) As used in this Section 4.5, the following terms shall have the following
respective meanings:
(i) “Holder” means Treasury and any other holder of Registrable Securities to
whom the registration rights conferred by this Agreement have been transferred in
compliance with Section 4.5(i) hereof.
(ii) “Register,” “registered,” and “registration” shall refer to a registration
effected by preparing and (A) filing a registration statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the declaration or
ordering of effectiveness of such registration statement or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration statement on
Form S-3.
(iii) “Registrable Securities” means (A) the Warrants (subject to Section
4.5(q)) and (B) any equity securities issued or issuable directly or indirectly with respect
to the securities referred to in the foregoing clause (A) by way of conversion, exercise or
exchange thereof, including the Warrant Shares, or share dividend or share split or in
connection with a combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization, provided that, once
issued, such securities will not be Registrable Securities when (1) they are sold pursuant
to an effective registration statement under the Securities Act, (2) except as provided
below in Section 4.5(q), they may be sold pursuant to Rule 144 without limitation
thereunder on volume or manner of sale, (3) they shall have ceased to be outstanding or
(4) they have been sold in a private transaction in which the transferor’s rights under this
Agreement are not assigned to the transferee of the securities. No Registrable Securities
may be registered under more than one registration statement at any one time.
(iv) “Registration Expenses” mean all expenses incurred by the Company in
effecting any registration pursuant to this Agreement (whether or not any registration or
prospectus becomes effective or final) or otherwise complying with its obligations under
this Section 4.5, including all registration, filing and listing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses, expenses
incurred in connection with any “road show”, the reasonable fees and disbursements of
Treasury’s counsel (if Treasury is participating in the registered offering), and expenses
of the Company’s independent accountants in connection with any regular or special
reviews or audits incident to or required by any such registration, but shall not include
Selling Expenses.
(v) “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415”
mean, in each case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.
(vi) “Selling Expenses” mean all discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities and fees and disbursements
of counsel for any Holder (other than the fees and disbursements of Treasury’s counsel
included in Registration Expenses).
- 17 -
(m) At any time, any holder of Securities (including any Holder) may elect to forfeit
its rights set forth in this Section 4.5 from that date forward; provided, that a Holder forfeiting
such rights shall nonetheless be entitled to participate under Section 4.5(b)(iv) – (vi) in any
Pending Underwritten Offering to the same extent that such Holder would have been entitled to
if the holder had not withdrawn; and provided, further, that no such forfeiture shall terminate a
Holder’s rights or obligations under Section 4.5(g) with respect to any prior registration or
Pending Underwritten Offering. “Pending Underwritten Offering” means, with respect to any
Holder forfeiting its rights pursuant to this Section 4.5(m), any underwritten offering of
Registrable Securities in which such Holder has advised the Company of its intent to register its
Registrable Securities either pursuant to Section 4.5(b)(ii) or 4.5(b)(iv) prior to the date of such
Holder’s forfeiture.
(n) Specific Performance. The parties hereto acknowledge that there would be no
adequate remedy at law if the Company fails to perform any of its obligations under this
Section 4.5 and that Treasury and the Holders from time to time may be irreparably harmed by
any such failure, and accordingly agree that Treasury and such Holders, in addition to any other
remedy to which they may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific performance of the
obligations of the Company under this Section 4.5 in accordance with the terms and conditions
of this Section 4.5.
(o) No Inconsistent Agreements. The Company shall not, on or after the date hereof,
enter into any agreement with respect to its securities that may impair the rights granted to
Treasury and the Holders under this Section 4.5 or that otherwise conflicts with the provisions
hereof in any manner that may impair the rights granted to Treasury and the Holders under this
Section 4.5. In the event the Company has, prior to the date hereof, entered into any agreement
with respect to its securities that is inconsistent with the rights granted to Treasury and the
Holders under this Section 4.5 (including agreements that are inconsistent with the order of
priority contemplated by Section 4.5(b)(vi)) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such agreements to ensure
they are consistent with the provisions of this Section 4.5. Any transaction entered into by the
Company that would reasonably be expected to require the inclusion in a Shelf Registration
Statement or any Company Report filed with the SEC of any separate financial statements
pursuant to Rule 3-05 of Regulation S-X or pro forma financial statements pursuant to Article 11
of Regulation S-X shall include provisions requiring the Company’s counterparty to provide any
information necessary to allow the Company to comply with its obligation hereunder.
(p) Certain Offerings by Treasury. In the case of any securities held by Treasury that
cease to be Registrable Securities solely by reason of clause (2) in the definition of “Registrable
Securities,” the provisions of Sections 4.5(b)(ii), clauses (iv), (ix) and (x)-(xii) of Section 4.5(d),
Section 4.5(h) and Section 4.5(j) shall continue to apply until such securities otherwise cease to
be Registrable Securities. In any such case, an “underwritten” offering or other disposition shall
include any distribution of such securities on behalf of Treasury by one or more broker-dealers,
an “underwriting agreement” shall include any purchase agreement entered into by such broker-
dealers, and any “registration statement” or “prospectus” shall include any offering document
approved by the Company and used in connection with such distribution.
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(q) Registered Sales of the Warrants. The Holders agree to sell the Warrants or any
portion thereof under the Shelf Registration Statement only beginning 30 days after notifying the
Company of any such sale, during which 30-day period Treasury and all Holders of the Warrants
shall take reasonable steps to agree to revisions to the Warrants, at the expense of the Company,
to permit a public distribution of the Warrants, including entering into a revised warrant
agreement, appointing a warrant agent, and making the securities eligible for book entry clearing
and settlement at the Depositary Trust Company.
(r) Market Stand-Off. In the event of an IPO, the Company shall not be required to
effect a registration (including a resale of Registrable Securities from an effective Shelf
Registration Statement) or an underwritten offering pursuant to Section 4.5(b) and Treasury
agrees, if requested by the managing underwriter or underwriters in such IPO, not to (i) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed
to, or could be expected to, result in the disposition by any person at any time in the future of)
any Registrable Securities (including Registrable Securities that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and regulations of the SEC);
(ii) enter into any swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of Registrable Securities, whether any
such transaction is to be settled by delivery of Registrable Securities, in cash or otherwise; (iii)
make any demand for or exercise any right or cause to be filed a registration statement, including
any amendments thereto, with respect to the registration of any Registrable Securities; or (iv)
publicly disclose the intention to do any of the foregoing, in each case (to the extent timely
notified in writing by the Company or the managing underwriter or underwriters), during the
period beginning seven days before and ending 90 days after the date of the underwriting
agreement entered into in connection with such IPO. If requested by the managing underwriter
or underwriters of any such IPO, Treasury shall execute a separate agreement to the foregoing
effect. The Company may impose stop-transfer instructions with respect to Registrable
Securities subject to the foregoing restriction until the end of the period referenced above. The
foregoing provisions of this Section 4.5(r) shall not apply to the sale of any shares to an
underwriter pursuant to an underwriting agreement, and shall be applicable only if all officers,
directors, and shareholders beneficially owning more than one percent (1%) of the Company’s
outstanding Common Stock are subject to the same restrictions.
“IPO” means the first underwritten public offering and sale of the Common Stock for
cash pursuant to an effective registration statement (other than on Form S-4, S-8 or a comparable
form) under the Securities Act.
4.6 Voting of Warrant Shares. Notwithstanding anything in this Agreement to the
contrary, Treasury shall not exercise any voting rights with respect to the Warrant Shares.
Article V
Miscellaneous
5.1 Survival of Representations and Warranties. The representations and warranties of
the Company made herein or in any certificates delivered in connection with the Initial Closing
or any subsequent Closing shall survive such Closing without limitation.
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5.2 Amendment. No amendment of any provision of this Agreement will be effective
unless made in writing and signed by an officer or a duly authorized representative of each party;
provided that Treasury may unilaterally amend any provision of this Agreement to the extent
required to comply with any changes after the date hereof in applicable federal statutes. No
failure or delay by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege. The rights and remedies herein provided shall be
cumulative of any rights or remedies provided by law.
5.3 Waiver of Conditions. No waiver will be effective unless it is in a writing signed
by a duly authorized officer of the waiving party that makes express reference to the provision or
provisions subject to such waiver.
5.4 Governing Law: Submission to Jurisdiction, Etc. This Agreement will be
governed by and construed in accordance with the federal law of the United States if and to
the extent such law is applicable, and otherwise in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such State.
Each of the parties hereto agrees (a) to submit to the exclusive jurisdiction and venue of the
United States District Court for the District of Columbia and the United States Court of
Federal Claims for any and all civil actions, suits or proceedings arising out of or relating
to this Agreement or the Warrants or the transactions contemplated hereby or thereby,
and (b) that notice may be served upon (i) the Company at the address and in the manner
set forth for notices to the Company in Section 5.5 and (ii) Treasury in accordance with
federal law. To the extent permitted by applicable law, each of the parties hereto hereby
unconditionally waives trial by jury in any civil legal action or proceeding relating to this
Agreement or the Warrants or the transactions contemplated hereby or thereby.
5.5 Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second Business Day following the date of dispatch if delivered by a recognized next day
courier service. All notices to the Company shall be delivered as set forth below, or pursuant to
such other instruction as may be designated in writing by the Company to Treasury. All notices
to Treasury shall be delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by Treasury to the Company.
If to the Company:
Frontier Group Holdings, Inc.
4545 Airport Way
Denver CO, 80239
Attention of General Counsel
With copies to (which shall not constitute notice):
Latham & Watkins LLP
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140 Scott Drive
Menlo Park, CA 94025
If to Treasury:
United States Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 2312
Washington, D.C. 20220
Attention: Assistant General Counsel (Banking and Finance)
5.6 Definitions.
(a) The term “Governmental Authority” means the government of the United States
of America or any other nation, or of any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).
(b) The term “Laws” has the meaning ascribed thereto in the Promissory Note.
(c) The term “Lien” has the meaning ascribed thereto in the Promissory Note.
(d) The term “Material Adverse Effect” means (a) a material adverse change in, or a
material adverse effect on, the operations, business, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a
whole; or (b) a material adverse effect on (i) the ability of the Company to perform its
obligations under this Agreement or any Warrant or (ii) the legality, validity, binding effect or
enforceability against the Company of this Agreement or any Warrant to which it is a party.
(e) The term “Organizational Documents” has the meaning ascribed thereto in the
Promissory Note.
(f) The term “Subsidiary” has the meaning ascribed thereto in the Promissory Note.
5.7 Assignment. Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any party hereto without the
prior written consent of the other party, and any attempt to assign any right, remedy, obligation
or liability hereunder without such consent shall be void, except (a) an assignment, in the case of
a Business Combination where such party is not the surviving entity, or a sale of substantially all
of its assets, to the entity which is the survivor of such Business Combination or the purchaser in
such sale and (b) as provided in Section 4.5.
5.8 Severability. If any provision of this Agreement or the Warrants, or the
application thereof to any person or circumstance, is determined by a court of competent
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jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and
equitable substitute provision to effect the original intent of the parties.
5.9 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or
implied, is intended to confer upon any person or entity other than the Company and Treasury
any benefit, right or remedies, except that the provisions of Section 4.5 shall inure to the benefit
of the persons referred to in that Section.
***
[Signature page follows]
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ANNEX A
FORM OF OPINION
(a) The Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the state of its incorporation.
(b) Each of the Warrants has been duly authorized and, when executed and delivered
as contemplated by the Agreement, will constitute a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity.
(c) The shares of Common Stock issuable upon exercise of the Warrants have been
duly authorized and reserved for issuance upon exercise of the Warrants and when so issued in
accordance with the terms of the Warrants will be validly issued, fully paid and non-assessable
[insert, if applicable: , subject to the approvals of the Company’s stockholders set forth on
Schedule 3].
(d) The Company has the corporate power and authority to execute and deliver the
Agreement and the Warrants and [insert, if applicable: , subject to the approvals of the
Company’s stockholders set forth on Schedule 3] to carry out its obligations thereunder (which
includes the issuance of the Warrants and Warrant Shares).
(e) The execution, delivery and performance by the Company of the Agreement and
the Warrants and the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Company and its stockholders, and
no further approval or authorization is required on the part of the Company [insert, if
applicable: , subject, in each case, to the approvals of the Company’s stockholders set forth on
Schedule 3].
(f) The Agreement is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and general equitable principles, regardless of whether
such enforceability is considered in a proceeding at law or in equity; provided, however, such
counsel need express no opinion with respect to Section 4.5(h) or the severability provisions of
the Agreement insofar as Section 4.5(h) is concerned.
(g) No registration of the Warrant and the Common Stock issuable upon exercise of
the Warrant under the U.S. Securities Act of 1933, as amended, is required for the offer and sale
of the Warrant or the Common Stock issuable upon exercise of the Warrant by the Company to
the Holder pursuant to and in the manner contemplated by this Agreement.
(h) The Company is not required to be registered as an investment company under the
Investment Company Act of 1940, as amended.
ANNEX B
FORM OF WARRANT
[SEE ATTACHED]
FORM OF WARRANT TO PURCHASE COMMON STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND SUCH LAWS.
WARRANT
to purchase
Shares of Common Stock
of
Issue Date:
1. Definitions. Unless the context otherwise requires, when used herein the
following terms shall have the meanings indicated.
“Affiliate” means, with respect to any person, any person directly or indirectly
controlling, controlled by or under common control with, such other person. For purposes of this
definition, “control” (including, with correlative meanings, the terms “controlled by” and “under
common control with”) when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of such person,
whether through the ownership of voting securities by contract or otherwise.
“Aggregate Net Cash Settlement Amount” has the meaning ascribed thereto in Section
2(A).
“Aggregate Net Share Settlement Amount” has the meaning ascribed thereto in Section
2(B).
“Average Market Price” means, with respect to any security, (i) the arithmetic average of
the Market Price of such security for the 15 consecutive trading day period ending on and
including the trading day immediately preceding the determination date or (ii) if the security has
not been traded on any national or regional securities exchange for at least the 15 consecutive
trading day period ending on and including the trading day immediately preceding the
determination date and the Quotations are not available for the remainder of such period, the
arithmetic average of the Market Price of such security for the trading days within such period
during which the security was traded on such national securities exchange.
“Board of Directors” means the board of directors of the Company, including any duly
authorized committee thereof.
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“Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Company’s stockholders.
“Business Day” means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or required by law or other
governmental actions to close; provided that banks shall be deemed to be generally open for
business in the event of a “shelter in place” or similar closure of physical branch locations at the
direction of any governmental entity if such banks’ electronic funds transfer system (including
wire transfers) are open for use by customers on such day.
“Capital Stock” means (A) with respect to any Person that is a corporation or company,
any and all shares, interests, participations or other equivalents (however designated) of capital
or capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.
“Charter” means, with respect to any Person, its certificate or articles of incorporation,
articles of association, or similar organizational document.
“Common Stock” means common stock of the Company, par value $[___] subject to
adjustment as provided in Section 13(C).
“Company” means the Person whose name, corporate or other organizational form and
jurisdiction of organization is set forth in Item 1 of Schedule A hereto.
“conversion” has the meaning set forth in Section 13(B)(ii).
“convertible securities” has the meaning set forth in Section 13(B)(ii).
“Equity Value” means the aggregate fair market value of all outstanding equity securities
of the Company determined by (i) Armanino LLP using the same methodology as was used to
perform the most recent determination of the equity value of the Company as per the valuation
attached as Exhibit A hereto (excluding any discounts or adjustments for lack of marketability
included therein) or (ii) in the event a valuation from Armanino LLP prepared in accordance
with clause (i) is not available, a nationally recognized independent appraiser using valuation
techniques then prevailing in the securities industry, retained by the Company at its expense for
this purpose and approved by Treasury in its sole discretion. The methodology used in
determining the Equity Value for purposes of clause (ii) shall consider discounts for the minority
interest represented by the Warrant Shares, but exclude any discounts or adjustments for lack of
marketability.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
“Exercise Date” means each date a Notice of Exercise substantially in the form annexed
hereto is delivered to the Company in accordance with Section 2 hereof.
“Exercise Price” means the amount set forth in Item 2 of Schedule A hereto, subject to
any adjustment as contemplated herein.
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“Expiration Time” means the Original Expiration Time or, if the Warrantholder is subject
to a Lockup Period at the Original Expiration Time, 5pm New York City time on the fifth
Business Day immediately following the termination of such Lockup Period.
“Fully-Diluted Outstanding Common Stock” means, with respect to a determination date,
the number of shares of all issued and outstanding Common Stock of the Company and all
Common Stock issuable upon the exercise or conversion of any outstanding security or
obligation that is by its terms, directly or indirectly, convertible into or exchangeable or
exercisable for Common Stock, and any option, warrant or other right to subscribe for, purchase
or acquire Common Stock as of such date, whether or not such instrument is at the time
exercisable, convertible or exchangeable.
“Initial Number” has the meaning set forth in Section 13(B)(ii)(1).
“Issue Date” means the date set forth in Item 3 of Schedule A hereto.
“Lockup Period” means any period during which the Warrantholder is subject to
restrictions on resale pursuant to Section 4.5(r) of the Warrant Agreement.
“Market Price” means, with respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on the principal national
securities exchange on which the applicable securities are listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange, the average of the closing bid
and ask prices as furnished by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose (the “Quotations”). “Market Price”
shall be determined without reference to after hours or extended hours trading.
“Minimum Exercise Amount” means 20% of the total number of the shares of Common
Stock with respect to which Warrants issued pursuant to the Warrant Agreement could be
exercised (including, for the avoidance of doubt, Warrants that were previously exercised),
adjusted as described in Section 13 hereof.
“Original Expiration Time” means 5:00 p.m. New York City time on the fifth
anniversary of the Issue Date.
“Original Warrantholder” means the United States Department of the Treasury. Any
actions specified to be taken by the Original Warrantholder hereunder may only be taken by such
Person and not by any other Warrantholder.
“Permitted Transactions” has the meaning set forth in Section 13(B)(ii).
“Per Share Fair Market Value” has the meaning set forth in Section 13(B)(iii).
“Per Share Net Cash Settlement Amount” means the Per Share Value of a share of
Common Stock determined as of the relevant Exercise Date less the Exercise Price.
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“Per Share Net Share Settlement Amount” means the quotient of (i) the Per Share Value
of a share of Common Stock determined as of the relevant Exercise Date less the then applicable
Exercise Price divided by (ii) the Per Share Value of a share of Common Stock determined as of
the relevant Exercise Date.
“Per Share Value” means (i) if the Common Stock is listed on a national securities
exchange as of day preceding the determination date or the Quotations are available as of such
date, the Average Market Price or (ii) if the Common Stock is not so listed, the quotient of the
Equity Value determined as of the most recent Valuation Date divided by the Fully Diluted
Outstanding Common Stock.
“Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
“Pro Rata Repurchases” means any purchase of shares of Common Stock by the
Company or any Affiliate thereof pursuant to (A) any tender offer or exchange offer subject to
Section 13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B)
any other offer available to substantially all holders of Common Stock, in the case of both (A) or
(B), whether for cash, shares of Capital Stock of the Company, other securities of the Company,
evidences of indebtedness of the Company or any other Person or any other property (including,
without limitation, shares of Capital Stock, other securities or evidences of indebtedness of a
subsidiary), or any combination thereof, effected while this Warrant is outstanding. The
“Effective Date” of a Pro Rata Repurchase shall mean the date of acceptance of shares for
purchase or exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase that is not a tender
or exchange offer.
“Regulatory Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder being in violation of
applicable law, rule or regulation, the receipt of any necessary approvals and authorizations of,
filings and registrations with, notifications to, or expiration or termination of any applicable
waiting period under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, or any successor statute,
and the rules and regulations promulgated thereunder.
“trading day” means (A) if the shares of Common Stock are not traded on any national
or regional securities exchange or association or over-the-counter market, a Business Day or (B)
if the shares of Common Stock are traded on any national or regional securities exchange or
association or over-the-counter market, a Business Day on which such relevant exchange or
quotation system is scheduled to be open for business and on which the shares of Common Stock
(i) are not suspended from trading on any national or regional securities exchange or association
or over-the-counter market for any period or periods aggregating one half hour or longer; and (ii)
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have traded at least once on the national or regional securities exchange or association or over-
the-counter market that is the primary market for the trading of the shares of Common Stock.
“Valuation Date” means the date as of which the Equity Value was most recently
determined.
“Warrant” means this Warrant, issued pursuant to the Warrant Agreement.
“Warrant Agreement” means the Warrant Agreement, dated as of the date set forth in
Item 4 of Schedule A hereto, as amended from time to time, between the Company and the
United States Department of the Treasury.
“Warrantholder” has the meaning set forth in Section 2.
“Warrant Shares” has the meaning set forth in Section 2.
2. Number of Warrant Shares; Net Exercise. This certifies that, for value received,
the United States Department of the Treasury or its permitted assigns (the “Warrantholder”) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up
to an aggregate of the number of fully paid and nonassessable shares of Common Stock set forth
in Item 5 of Schedule A hereto. The number of shares of Common Stock (the “Warrant Shares”)
issuable upon exercise of this Warrant and the Exercise Price are subject to adjustment as
provided herein, and all references to “Common Stock,” “Warrant Shares” and “Exercise Price”
herein shall be deemed to include any such adjustment or series of adjustments.
Upon exercise of the Warrant in accordance with Section 3 hereof prior to the date that is
30 days prior to the Expiration Time, the Company shall elect to pay or deliver, as the case may
be, to the exercising Warrantholder (a) cash (“Net Cash Settlement”) or (b) Warrant Shares
together with cash, if applicable, in lieu of delivering any fractional shares in accordance with
Section 5 of this Warrant (“Net Share Settlement”). The Company will notify the exercising
Warrantholder of its election of a settlement method within one Business Day after the relevant
Exercise Date and if it fails to deliver a timely notice shall be deemed to have elected Net Share
Settlement.
If the Common Stock is not listed on a national securities exchange on an Exercise Date,
the Company shall be deemed to irrevocably elect Net Cash Settlement with respect to such
exercise.
A. Net Cash Settlement. If the Company elects Net Cash Settlement, it shall
pay to the Warrantholder cash equal to the Per Share Net Cash Settlement Amount multiplied by
the number of Warrant Shares as to which the Warrant has been exercised as indicated in the
Notice of Exercise (the “Aggregate Net Cash Settlement Amount”).
B. Net Share Settlement. If the Company elects Net Share Settlement, it shall
deliver to the Warrantholder a number of shares of Common Stock equal to the Per Share Net
Share Settlement Amount multiplied by the number of Warrant Shares as to which the Warrant
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has been exercised as indicated in the Notice of Exercise (the “Aggregate Net Share Settlement
Amount”).
3. Term; Method of Exercise; Valuation Requests.
A. Subject to Section 2, to the extent permitted by applicable laws and
regulations, this Warrant is exercisable, in whole or in part, by the Warrantholder, at any time or
from time to time after the execution and delivery of this Warrant by the Company on the date
hereof, but in no even later than the Expiration Time.
B. This Warrant may be exercised by the surrender of this Warrant and
delivery of the Notice of Exercise annexed hereto, duly completed and executed on behalf of the
Warrantholder, at the principal executive office of the Company located at the address set forth
in Item 6 of Schedule A hereto (or such other office or agency of the Company in the United
States as it may designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company).
C. If the Common Stock is not listed on a national securities exchange on the
applicable Exercise Date, the Warrantholder may only exercise this Warrant if the number of
shares of Common Stock with respect to which the Warrantholder is exercising this Warrant,
aggregated with the number of shares of Common Stock with respect to which the Warrantholder
is exercising other warrants issued under the Warrant Agreement on the relevant Exercise Date,
is no less than the Minimum Exercise Amount.
D. If the Warrantholder does not exercise this Warrant in its entirety, the
Warrantholder will be entitled to receive from the Company within a reasonable time after the
date on which this Warrant has been duly exercised in accordance with the terms of this Warrant,
and in any event not exceeding three Business Days after the date thereof, a new warrant in
substantially identical form for the purchase of that number of Warrant Shares equal to the
difference between the number of Warrant Shares subject to this Warrant and the number of
Warrant Shares as to which this Warrant is so exercised. Notwithstanding anything in this
Warrant to the contrary, the Warrantholder hereby acknowledges and agrees that its exercise of
this Warrant for Warrant Shares is subject to the condition that the Warrantholder will have first
received any applicable Regulatory Approvals.
E. If the Common Stock is not listed on a national securities exchange the
Company shall (i) upon request of a Warrantholder, promptly deliver to such Warrantholder the
most recent Equity Value of the Company and (ii) obtain an Equity Value as of a date within 90
days subsequent to receipt of a written request from a Warrantholder for such valuation,
provided that the Company shall not be required to obtain an Equity Value more than 4 times in
any 12 month period.
4. Method of Settlement.
A. Net Cash Settlement. If the Company elects Net Cash Settlement, the
Company shall, (A) if the Common Stock at the time of such election is not listed on a national
securities exchange, use its best efforts to as soon as possible, and no more than sixty days after,
and (B) if the Common Stock at the time of such election is listed on a national securities
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exchange, within a reasonable time, not to exceed five Business Days, after the date on which
this Warrant has been duly exercised in accordance with the terms of this Warrant, pay to the
exercising Warrantholder the Aggregate Net Cash Settlement Amount.
B. Net Share Settlement. If the Company elects Net Share Settlement, shares of
Common Stock equal to the Aggregate Net Share Settlement Amount shall be (x) issued in such
name or names as the exercising Warrantholder may designate and (y) delivered by the Company
or the Company's transfer agent to such Warrantholder or its nominee or nominees (i) if the
shares are then able to be so delivered, via book-entry transfer crediting the account of such
Warrantholder (or the relevant agent member for the benefit of such Warrantholder) through the
Depositary’s DWAC system (if the Company's transfer agent participates in such system), or (ii)
otherwise in certificated form by physical delivery to the address specified by the Warrantholder
in the Notice of Exercise, within a reasonable time, not to exceed three Business Days after the
date on which this Warrant has been duly exercised in accordance with the terms of this Warrant.
The Company hereby represents and warrants that any Warrant Shares issued upon the exercise
of this Warrant in accordance with the provisions of Section 3 will 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 Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant 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 Warrantholder 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 Warrant Shares may not be actually delivered on
such date. The Company will at all times reserve and keep available, out of its authorized but
unissued Common Stock, solely for the purpose of providing for the exercise of this Warrant, the
aggregate number of shares of Common Stock then issuable upon exercise of this Warrant at any
time. If the Common Stock is listed on a national securities exchange, the Company will (A)
procure, at its sole expense, the listing of the Warrant Shares issuable upon exercise of this
Warrant at any time, subject to issuance or notice of issuance, on all principal stock exchanges
on which the Common Stock is then listed or traded and (B) maintain such listings of such
Warrant Shares at all times after issuance. The Company will use reasonable best efforts to
ensure that the Warrant Shares may be issued without violation of any applicable law or
regulation or of any requirement of any securities exchange on which the Warrant Shares are
listed or traded.
5. No Fractional Warrant Shares or Scrip. No fractional Warrant Shares or scrip
representing fractional Warrant Shares shall be issued upon any exercise of this Warrant. In lieu
of any fractional Share to which the Warrantholder would otherwise be entitled, the
Warrantholder shall be entitled to receive a cash payment equal to the Per Share Value of the
Common Stock determined as of the Exercise Date multiplied by such fraction of a share, less
the pro-rated Exercise Price for such fractional share.
6. No Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof. The Company will at no time close its transfer books against transfer of
this Warrant in any manner which interferes with the timely exercise of this Warrant.
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7. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the
Warrantholder for any issue or transfer tax or other incidental expense in respect of the issuance
of such certificates, all of which taxes and expenses shall be paid by the Company; provided,
however, that the Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any such certificate, or any certificates or
other securities in a name other than that of the registered holder of the Warrant surrendered
upon exercise of the Warrant.
8. Transfer/Assignment.
A. Subject to compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the Company by the
registered holder hereof in person or by duly authorized attorney, and a new warrant shall be
made and delivered by the Company, of the same tenor and date as this Warrant but registered in
the name of one or more transferees, upon surrender of this Warrant, duly endorsed, to the office
or agency of the Company described in Section 3. All expenses (other than stock transfer taxes)
and other charges payable in connection with the preparation, execution and delivery of the new
warrants pursuant to this Section 8 shall be paid by the Company.
B. If and for so long as required by the Warrant Agreement, this Warrant shall
contain the legend as set forth in Section 4.2(a) of the Warrant Agreement.
9. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the
surrender hereof by the Warrantholder to the Company, for a new warrant or warrants of like
tenor and representing the right to purchase the same aggregate number of Warrant Shares. The
Company shall maintain a registry showing the name and address of the Warrantholder as the
registered holder of this Warrant. This Warrant may be surrendered for exchange or exercise in
accordance with its terms, at the office of the Company, and the Company shall be entitled to
rely in all respects, prior to written notice to the contrary, upon such registry.
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Warrant Shares as provided for in such lost,
stolen, destroyed or mutilated Warrant.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a Business Day,
then such action may be taken or such right may be exercised on the next succeeding day that is
a Business Day.
12. Information. With a view to making available to Warrantholders the benefits of
certain rules and regulations of the SEC which may permit the sale of the Warrants and Warrant
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Shares to the public without registration, the Company agrees to use its reasonable best efforts
to:
A. (x) if the Company is subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, file with the SEC, in a timely manner, all reports and other
documents required of the Company under the Securities Act and the Exchange Act, and (y) if at
any time the Company is not required to file such reports, make available, upon the request of
any Warrantholder, such information necessary to permit sales pursuant to Rule 144A (including
the information required by Rule 144A(d)(4) under the Securities Act);
B. if the Company is subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, furnish to any holder of Warrants or Warrant Shares forthwith upon
request: a written statement by the Company as to its compliance with the reporting requirements
of the Exchange Act and Rule 144(c)(1);
C. furnish to any holder of Warrants or Warrant Shares forthwith upon request
a copy of the Company’s most recent annual or quarterly report and such other reports and
documents as the Warrantholder may reasonably request; and
D. take such further action as any Warrantholder may reasonably request, all to
the extent required from time to time to enable such Warantholder to sell Warrants or Warrant
Shares without registration under the Securities Act.
13. Adjustments and Other Rights.
A. Adjustments at a time when the Common Stock is not listed on a national
securities exchange. If, at any time at which the Common Stock is not listed on a national
securities exchange, any event occurs that, in the good faith judgment of the Board of Directors
of the Company, would require adjustment of the Exercise Price or number of Warrant Shares
issuable upon exercise of this Warrant in order to fairly and adequately protect the purchase
rights of the Warrants in accordance with the essential intent and principles of the Warrant
Agreement and the Warrants, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and principles, as shall be
reasonably necessary, in the good faith opinion of the Board of Directors, to protect such
purchase rights as aforesaid. The Exercise Price or the number of Warrant Shares shall not be
adjusted in the event of a change in the par value of the Common Stock or a change in the
jurisdiction of incorporation of the Company.
B. Adjustments at a time when the Common Stock is listed on a national
securities exchange. At any time at which the Common Stock is listed on a national securities
exchange, the Exercise Price and the number of Warrant Shares issuable upon exercise of the
Warrant shall be subject to adjustment from time to time as follows; provided, that if more than
one subsection of this Section 13(B) is applicable to a single event, the subsection shall be
applied that produces the largest adjustment and no single event shall cause an adjustment under
more than one subsection of this Section 13(B) so as to result in duplication:
i.Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company
shall (i) declare and pay a dividend or make a distribution on its Common Stock
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in shares of Common Stock, (ii) subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or reclassify the
outstanding shares of Common Stock into a smaller number of shares, the number
of Warrant Shares issuable upon exercise of this Warrant at the time of the record
date for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted so that the
Warrantholder after such date shall be entitled to acquire the number of shares of
Common Stock which such holder would have owned or been entitled to receive
in respect of the shares of Common Stock subject to this Warrant after such date
had this Warrant been exercised immediately prior to such date. In such event,
the Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be adjusted to the number obtained by dividing (x) the
product of (1) the number of Warrant Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect immediately
prior to the record or effective date, as the case may be, for the dividend,
distribution, subdivision, combination or reclassification giving rise to this
adjustment by (y) the new number of Warrant Shares issuable upon exercise of
the Warrant determined pursuant to the immediately preceding sentence.
ii.Certain Issuances of Common Stock or Convertible Securities. If the Company
shall issue shares of Common Stock (or rights or warrants or other securities
exercisable or convertible into or exchangeable (collectively, a “conversion”) for
shares of Common Stock) (collectively, “convertible securities”) (other than in
Permitted Transactions (as defined below) or a transaction to which subsection (i)
of this Section 13(B) is applicable) without consideration or at a consideration per
share (or having a conversion price per share) that is less than 90% of the Average
Market Price determined as of the date of the agreement on pricing such shares
(or such convertible securities) then, in such event:
1. the number of Warrant Shares issuable upon the exercise of this
Warrant immediately prior to the date of the agreement on pricing
of such shares (or of such convertible securities) (the “Initial
Number”) shall be increased to the number obtained by
multiplying the Initial Number by a fraction (A) the numerator of
which shall be the sum of (x) the number of shares of Common
Stock of the Company outstanding on such date and (y) the
number of additional shares of Common Stock issued (or into
which convertible securities may be exercised or convert) and (B)
the denominator of which shall be the sum of (I) the number of
shares of Common Stock outstanding on such date and (II) the
number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of
shares of Common Stock so issued (or into which convertible
securities may be exercised or convert) would purchase at the
Average Market Price determined as of the date of the agreement
on pricing such shares (or such convertible securities); and
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2. the Exercise Price payable upon exercise of the Warrant shall be
adjusted by multiplying such Exercise Price in effect immediately
prior to the date of the agreement on pricing of such shares (or of
such convertible securities) by a fraction, the numerator of which
shall be the number of shares of Common Stock issuable upon
exercise of this Warrant prior to such date and the denominator of
which shall be the number of shares of Common Stock issuable
upon exercise of this Warrant immediately after the adjustment
described in clause (1) above.
For purposes of the foregoing, the aggregate consideration receivable by the
Company in connection with the issuance of such shares of Common Stock or
convertible securities shall be deemed to be equal to the sum of the net offering
price (including the Fair Market Value of any non-cash consideration and after
deduction of any related expenses payable to third parties) of all such securities
plus the minimum aggregate amount, if any, payable upon exercise or conversion
of any such convertible securities into shares of Common Stock; and “Permitted
Transactions” shall mean issuances (i) as consideration for or to fund the
acquisition of businesses and/or related assets, (ii) in connection with employee
benefit plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock
or convertible securities for cash conducted by the Company or its affiliates
pursuant to registration under the Securities Act or Rule 144A thereunder on a
basis consistent with capital raising transactions by comparable institutions and
(iv) in connection with the exercise of preemptive rights on terms existing as of
the Issue Date. Any adjustment made pursuant to this Section 13(B)(ii) shall
become effective immediately upon the date of such issuance.
iii.Other Distributions. In case the Company shall fix a record date for the making
of a distribution to all holders of shares of its Common Stock of securities,
evidences of indebtedness, assets, cash, rights or warrants (excluding dividends of
its Common Stock and other dividends or distributions referred to in Section
13(B)(i)), in each such case, the Exercise Price in effect prior to such record date
shall be reduced immediately thereafter to the price determined by multiplying the
Exercise Price in effect immediately prior to the reduction by the quotient of (x)
the Average Market Price of the Common Stock determined as of the first date on
which the Common Stock trades regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading without the
right to receive such distribution, minus the amount of cash and/or the Fair
Market Value of the securities, evidences of indebtedness, assets, rights or
warrants to be so distributed in respect of one share of Common Stock (such
amount and/or Fair Market Value, the “Per Share Fair Market Value”) divided by
(y) the Average Market Price specified in clause (x); such adjustment shall be
made successively whenever such a record date is fixed. In such event, the
number of Warrant Shares issuable upon the exercise of this Warrant shall be
increased to the number obtained by dividing (x) the product of (1) the number of
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Warrant Shares issuable upon the exercise of this Warrant before such adjustment,
and (2) the Exercise Price in effect immediately prior to the distribution giving
rise to this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. In the event that such distribution is not
so made, the Exercise Price and the number of Warrant Shares issuable upon
exercise of this Warrant then in effect shall be readjusted, effective as of the date
when the Board of Directors determines not to distribute such shares, evidences of
indebtedness, assets, rights, cash or warrants, as the case may be, to the Exercise
Price that would then be in effect and the number of Warrant Shares that would
then be issuable upon exercise of this Warrant if such record date had not been
fixed.
iv.Certain Repurchases of Common Stock. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior to
the Effective Date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (i) the product of (x) the number of shares of Common Stock
outstanding immediately before such Pro Rata Repurchase and (y) the Average
Market Price of a share of Common Stock determined as of the date of the first
public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the
Pro Rata Repurchase, and of which the denominator shall be the product of (i) the
number of shares of Common Stock outstanding immediately prior to such Pro
Rata Repurchase minus the number of shares of Common Stock so repurchased
and (ii) the Average Market Price per share of Common Stock determined as of
the date of the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase. In such event, the number of
shares of Common Stock issuable upon the exercise of this Warrant shall be
increased to the number obtained by dividing (x) the product of (1) the number of
Warrant Shares issuable upon the exercise of this Warrant before such adjustment,
and (2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase
giving rise to this adjustment by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence. For the avoidance of doubt,
no increase to the Exercise Price or decrease in the number of Warrant Shares
issuable upon exercise of this Warrant shall be made pursuant to this Section
13(B)(v).
v.Other Events. For so long as the Original Warrantholder holds this Warrant or
any portion thereof, if any event occurs as to which the provisions of this Section
13 are not strictly applicable or, if strictly applicable, would not, in the good faith
judgment of the Board of Directors of the Company, fairly and adequately protect
the purchase rights of the Warrants in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good faith
opinion of the Board of Directors, to protect such purchase rights as aforesaid.
The Exercise Price or the number of Warrant Shares shall not be adjusted in the
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event of a change in the par value of the Common Stock or a change in the
jurisdiction of incorporation of the Company.
C. Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock referred to in
Section 13(B)(i)), the Warrantholder’s right to receive Warrant Shares upon exercise of this
Warrant shall be converted into the right to exercise this Warrant to acquire the number of shares
of stock or other securities or property (including cash) which the Common Stock issuable (at the
time of such Business Combination or reclassification) upon exercise of this Warrant
immediately prior to such Business Combination or reclassification would have been entitled to
receive upon consummation of such Business Combination or reclassification; and in any such
case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter
of the Warrantholder shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to the Warrantholder’s right to exercise this Warrant in exchange for any shares of
stock or other securities or property pursuant to this paragraph. In determining the kind and
amount of stock, securities or the property receivable upon exercise of this Warrant following the
consummation of such Business Combination, if the holders of Common Stock have the right to
elect the kind or amount of consideration receivable upon consummation of such Business
Combination, then the consideration that the Warrantholder shall be entitled to receive upon
exercise shall be deemed to be the types and amounts of consideration received by the majority
of all holders of the shares of common stock that affirmatively make an election (or of all such
holders if none make an election).
D. Rounding of Calculations; Minimum Adjustments. All calculations under
this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one-
hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the
contrary notwithstanding, no adjustment in the Exercise Price or the number of Warrant Shares
shall be made if the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of
a share of Common Stock, but any such amount shall be carried forward and an adjustment with
respect thereto shall be made at the time of and together with any subsequent adjustment which,
together with such amount and any other amount or amounts so carried forward, shall aggregate
$0.01 or 1/10th of a share of Common Stock, or more.
E. Timing of Issuance of Additional Common Stock Upon Certain
Adjustments. In any case in which the provisions of this Section 13 shall require that an
adjustment shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Warrantholder of this Warrant
exercised after such record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such exercise by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such exercise before giving effect to
such adjustment and (ii) paying to such Warrantholder any amount of cash in lieu of a fractional
share of Common Stock; provided, however, that the Company upon request shall deliver to such
Warrantholder a due bill or other appropriate instrument evidencing such Warrantholder’s right
to receive such additional shares, and such cash, upon the occurrence of the event requiring such
adjustment.
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F. Statement Regarding Adjustments. Whenever the Exercise Price or the
number of Warrant Shares shall be adjusted as provided in this Section 13, the Company shall
forthwith file at the principal office of the Company a statement showing in reasonable detail the
facts requiring such adjustment and the Exercise Price that shall be in effect and the number of
Warrant Shares after such adjustment, and the Company shall also cause a copy of such
statement to be sent by mail, first class postage prepaid, to each Warrantholder at the address
appearing in the Company’s records.
G. Notice of Adjustment Event. In the event that the Company shall propose
to take any action of the type described in this Section 13 (but only if the action of the type
described in this Section 13 would result in an adjustment in the Exercise Price or the number of
Warrant Shares or a change in the type of securities or property to be delivered upon exercise of
this Warrant), the Company shall give notice to the Warrantholder, in the manner set forth in this
Section 13(G), which notice shall specify the record date, if any, with respect to any such action
and the approximate date on which such action is to take place. Such notice shall also set forth
the facts with respect thereto as shall be reasonably necessary to indicate the effect on the
Exercise Price and the number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action which would require the
fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and
in case of all other action, such notice shall be given at least 15 days prior to the taking of such
proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or
validity of any such action.
H. Proceedings Prior to Any Action Requiring Adjustment. As a condition
precedent to the taking of any action which would require an adjustment pursuant to this Section
13, the Company shall take any action which may be necessary, including obtaining regulatory,
New York Stock Exchange, NASDAQ Stock Market or other applicable national securities
exchange or stockholder approvals or exemptions, as applicable, in order that the Company may
thereafter validly and legally issue as fully paid and nonassessable all shares of Common Stock
that the Warrantholder is entitled to receive upon exercise of this Warrant pursuant to this
Section 13.
I. Adjustment Rules. Any adjustments pursuant to this Section 13 shall be
made successively whenever an event referred to herein shall occur. If an adjustment in Exercise
Price made hereunder would reduce the Exercise Price to an amount below par value of the
Common Stock, then such adjustment in Exercise Price made hereunder shall reduce the
Exercise Price to the par value of the Common Stock.
14. No Impairment. The Company will not, by amendment of its Charter or through
any reorganization, transfer of assets, consolidation, merger, 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 to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and in taking of all such
action as may be necessary or appropriate in order to protect the rights of the Warrantholder.
15. Governing Law. This Warrant will be governed by and construed in
accordance with the federal law of the United States if and to the extent such law is
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applicable, and otherwise in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such State. Each of the Company
and the Warrantholder agrees (a) to submit to the exclusive jurisdiction and venue of the
United States District Court for the District of Columbia for any civil action, suit or
proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby, and (b) that notice may be served upon the Company at the address in Section 19
below and upon the Warrantholder at the address for the Warrantholder set forth in the
registry maintained by the Company pursuant to Section 9 hereof. To the extent permitted
by applicable law, each of the Company and the Warrantholder hereby unconditionally
waives trial by jury in any civil legal action or proceeding relating to the Warrant or the
transactions contemplated hereby or thereby.
16. Binding Effect. This Warrant shall be binding upon any successors or assigns of
the Company.
17. Amendments. This Warrant may be amended and the observance of any term of
this Warrant may be waived only with the written consent of the Company and the
Warrantholder.
18. Prohibited Actions. The Company agrees that it will not take any action which
would entitle the Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, together with
all shares of Common Stock then outstanding and all shares of Common Stock then issuable
upon the exercise of all outstanding options, warrants, conversion and other rights, would exceed
the total number of shares of Common Stock then authorized by its Charter.
19. Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second Business Day following the date of dispatch if delivered by a recognized next day
courier service. All notices hereunder shall be delivered as set forth in Item 7 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice.
20. Entire Agreement. This Warrant, the forms attached hereto and Schedule A
hereto (the terms of which are incorporated by reference herein), and the Warrant Agreement
(including all documents incorporated therein), contain the entire agreement between the parties
with respect to the subject matter hereof and supersede all prior and contemporaneous
arrangements or undertakings with respect thereto.
[Remainder of page intentionally left blank]
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[Form of Notice of Exercise]
Date:
TO: [Company]
RE: Exercise of Warrant
The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby
notifies the Company of its intention to exercise its option with respect to the number of shares
of the Common Stock set forth below covered by such Warrant. Pursuant to Section 4 of the
Warrant, the undersigned acknowledges that the Company may settle this exercise in net cash or
shares. Cash to be paid pursuant to a Net Cash Settlement or payment of fractional shares in
connection with a Net Share Settlement should be deposited to the account of the Warrantholder
set forth below. Common Stock to be delivered pursuant to a Net Share Settlement shall be
delivered to the Warrantholder as indicated below. A new warrant evidencing the remaining
shares of Common Stock covered by such Warrant, but not yet subscribed for and purchased, if
any, should be issued in the name set forth below.
Number of Warrant Shares:
Aggregate Exercise Price:
Address for Delivery of Warrant Shares:
Wire Instructions:
Proceeds to be delivered: $
Name of Bank:
City/ State of Bank:
ABA Number of Bank
SWIFT #
Name of Account:
Account Number at Bank:
Securities to be issued to:
If in book-entry form through the Depositary:
Depositary Account Number:
Name of Agent Member:
If in certificated form:
Social Security Number or Other Identifying Number:
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Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the exercising Warrantholder’s interest in the Warrant:
Social Security Number or Other Identifying Number:
Name:
Street Address:
City, State and Zip Code:
Holder:
By:
Name:
Title:
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
a duly authorized officer.
Dated:
COMPANY: FRONTIER GROUP HOLDINGS,
INC.
By:
Name:
Title:
Attest:
By:
Name:
Title:
[Signature Page to Warrant]
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SCHEDULE A
Item 1
Name: Frontier Group Holdings, Inc.
Corporate or other organizational form: Corporation
Jurisdiction of organization: Delaware
Item 2
Exercise Price:
Item 3
Issue Date:
Item 4
Date of Warrant Agreement between the Company and the United States Department of the
Treasury: April 30, 2020
Item 5
Number of shares of Common Stock:
Item 6
Company’s address: 4545 Airport Way, Denver, CO 80239
Item 7
Notice information:
Frontier Group Holdings, Inc.
4545 Airport Way
Denver CO, 80239
Attention of General Counsel
Telephone No.
Email:
With copies to (which shall not constitute notice):
Latham & Watkins LLP
140 Scott Drive
Menlo Park, CA 94025
Attention:
Facsimile:
Email:
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EXHIBIT A
VALUATION
[See Attached]
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SCHEDULE 1
WARRANT SHARES FORMULA
(a) The Exercise Price shall equal the Equity Value (as defined in Annex B), subject to approval
of such Equity Value by Treasury (such approval not to be unreasonably delayed or withheld),
determined as of (i) either April 9, 2020 or (ii) if the Company has determined the Equity Value
as of the last day of the Company’s first fiscal quarter in 2020, as of the last day of the
Company’s first fiscal quarter in 2020 divided by the Fully Diluted Outstanding Common Stock
(as defined in Annex B).
(b) The number of Warrant Shares for which Warrants issued on each Warrant Closing Date
shall be exercisable shall equal:
(i) On the date of the Initial Closing, the quotient of (x) the product of the full
outstanding principal amount of the Promissory Note on the date of the Initial Closing
multiplied by 0.1 divided by (y) the Exercise Price; and
(ii) On each Warrant Closing Date subsequent to the date of the Initial Closing, the
quotient of (x) the product of the amount by which the principal amount of the
Promissory Note is increased on such Warrant Closing Date multiplied by 0.1 divided
by (y) the Exercise Price.
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SCHEDULE 2
CAPITALIZATION
FRONTIER GROUP HOLDINGS, INC.
As of March 31, 2020
Authorized Capital Stock
• Voting Common Stock, par value $0.001 per share: 12,000,000
• Non-Voting Common Stock, par value $0.001 per share: 2,000,000
• Preferred Stock, par value $0.001 per share: 1,000,000
Issued and Outstanding Capital Stock
• Voting Common Stock, par value $0.001 per share: 5,243,233
• Non-Voting Common Stock, par value $0.001 per share: 0
• Preferred Stock, par value $0.001 per share: 0
Capital Stock reserved for issuance for outstanding equity awards
• Voting Common Stock, par value $0.001 per share: 359,416
• Non-Voting Common Stock, par value $0.001 per share: 0
• Preferred Stock, par value $0.001 per share: 0
Additional shares of Capital Stock reserved for issuance under equity award plans
• Voting Common Stock, par value $0.001 per share: 597,351
• Non-Voting Common Stock, par value $0.001 per share: 0
• Preferred Stock, par value $0.001 per share: 0
Names and Addresses of 5% and greater holders
Indigo Frontier Holdings, LLC
c/o Indigo Partners
2525 East Camelback Road, Suite 900
Phoenix, Arizona 85016
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SCHEDULE 3
REQUIRED STOCKHOLDER APPROVALS
None.
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