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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 1997
PAXAR CORPORATION
(Exact name of registrant as specified in its charter)
New York 0-5610 13-5670050
(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
105 Corporate Park Drive, White Plains, New York 10604
(Address of Principal Executive Offices) (Zip Code)
(914)697-6800
Registrant's telephone number, including area code
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Item 2. Acquisition or Disposition of Assets.
On March 3, 1997, PAXAR Corporation, a New York corporation (the
"Registrant"), completed the acquisition of 495 shares (the "Shares") of common
stock, par value $.01 ("Holdings Common Stock") of Monarch Holdings, Inc., a
Delaware corporation ("Holdings"), from Odyssey Partners, L.P. ("Odyssey").
Prior to the completion of this acquisition, the Registrant owned 495 shares of
Holdings Common Stock, representing approximately 49% of the issued and
outstanding shares of Holdings Common Stock. Holdings owned all of the
outstanding capital stock of Monarch Marking Systems, Inc. ("Monarch"), which
manufactures, markets and distributes (i) tabletop label dispensers and handheld
mechanical labeling guns which print pressure-sensitive (i.e., adhesive backed)
price and other identification labels and affix them on to merchandise for
retailers, and (ii) electronic bar code printers, which are used in a wide range
of retail and industrial applications, including inventory and management
distribution systems.
The consideration for the Shares consisted of (i) $94,083,750 in cash;
(ii) a note payable by the Registrant to Odyssey in the amount of $5,907,559 at
an annual interest rate equal to 4.88%, compounded quarterly, with both the
principal and interest payable on January 2, 1998, secured by a Letter of Credit
issued by Fleet Bank, N.A.; (iii) payment of certain expenses of the transaction
in the amount of $8,691; and (iv) five-year warrants to purchase (A) 1,000,000
shares of common stock par value $.10, of the Registrant ("PAXAR Common Stock"),
at an exercise price of $17.50 per share (subject to adjustment in certain
events) and (B) 200,000 shares of PAXAR Common Stock, at an exercise price of
$21.875 per share (subject to adjustment in certain events). The Registrant used
the proceeds of a credit facility with Fleet Bank, N.A. and Wachovia Bank of
Georgia, N.A., as the lead lenders, to pay the cash portion of the purchase
price. The Registrant has granted Odyssey certain registration rights with
respect to its warrants and the shares of PAXAR Common Stock issuable upon
exercise thereof.
Immediately following the closing of the acquisition of the Shares, the
Registrant caused Holdings to merge with and into the Registrant (the "Merger").
Thomas R. Loemker, Chairman of Holdings, and John W. Paxton, President and Chief
Executive Officer of Holdings, each received 125,229 shares of PAXAR Common
Stock in the Merger in exchange for the 10 shares of Holdings Common Stock owned
by each of them. In the Merger, employees of Holdings received incentive stock
options to purchase an aggregate of 995,575 shares of PAXAR Common Stock
(including options to purchase 500,918 shares of PAXAR Common Stock granted to
Mr. Paxton) pursuant to the Registrant's 1990 Employee Stock Option Plan in
exchange for outstanding options to purchase Holdings Common Stock.
Upon consummation of the Registrant's acquisition of the shares of
Holdings Common Stock owned by Odyssey and the subsequent Merger, Monarch became
a wholly-owned subsidiary of the Registrant.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
It is impracticable for the Registrant to file the financial
information of the business acquired hereunder at this time, and such
information will be filed by amendment within sixty days after the date hereof.
(b) Pro Forma Financial Information.
It is impracticable for the Registrant to file the pro forma
financial information required hereunder at this time, and such information will
be filed by amendment within sixty days after the date hereof.
(c) Exhibits.
2.1 Amendment No. 1 to Stock Purchase Agreement dated as of March 3,
1997 between PAXAR Corporation and Odyssey Partners, L.P.
2.2 Agreement and Plan of Merger dated as of March 3, 1997 by and
among PAXAR Corporation, Monarch Holdings, Inc., Thomas Loemker and John W.
Paxton.
2.3 Note dated as of March 3, 1997 between PAXAR Corporation and
Odyssey Partners, L.P.
2.4 Letter of Credit dated as of March 3, 1997 issued by Fleet Bank
in favor of Odyssey Partners, L.P.,for the account of PAXAR Corporation.
4.1 Registration Rights Agreement dated as of March 3, 1997 between
PAXAR Corporation and Odyssey Partners, L.P.
4.2 Warrant Agreement for "A" Warrants between PAXAR Corporation and
Odyssey Partners, L.P. dated March 3, 1997.
4.3 Odyssey Partners, L.P. Certificate for 1,000,000 Warrants dated
March 3, 1997.
4.4 Warrant Agreement for "B" Warrants between PAXAR Corporation and
Odyssey Partners, L.P. dated March 3, 1997.
4.5 Odyssey Partners, L.P. Certificate for 200,000 Warrants dated
March 3, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
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undersigned thereunto duly authorized.
PAXAR CORPORATION
Dated: March 17, 1997 By: /s/ George Mitchell
-------------------
George Mitchell
Treasurer
EXHIBIT INDEX
Exhibit No. Description
2.1 Amendment No. 1 to Stock Purchase Agreement dated as of March 3,
1997 between PAXAR Corporation and Odyssey Partners, L.P.
2.2 Agreement and Plan of Merger dated as of March 3, 1997 by and among
PAXAR Corporation, Monarch Holdings, Inc., Thomas Loemker and John W. Paxton.
2.3 Note dated as of March 3, 1997 between PAXAR Corporation and
Odyssey Partners, L.P.
2.4 Letter of Credit dated as of March 3, 1997 issued by Fleet Bank in
favor of Odyssey Partners, L.P., for the account of PAXAR Corporation.
4.1 Registration Rights Agreement dated as of March 3, 1997 between
PAXAR Corporation and Odyssey Partners, L.P.
4.2 Warrant Agreement for "A" Warrants between PAXAR Corporation and
Odyssey Partners, L.P. dated March 3, 1997.
4.3 Odyssey Partners, L.P. Certificate for 1,000,000 Warrants dated
March 3, 1997.
4.4 Warrant Agreement for "B" Warrants between PAXAR Corporation and
Odyssey Partners, L.P. dated March 3, 1997.
4.5 Odyssey Partners, L.P. Certificate for 200,000 Warrants dated March
3, 1997.
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AMENDMENT NO. 1 TO STOCK
PURCHASE AGREEMENT
Subject to the terms and conditions set forth in the Stock Purchase
Agreement, the Seller has agreed to sell to the Purchaser, and the Purchaser has
agreed to purchase from the Seller, 495 shares of common stock, par value $.01
per share, of Monarch Holdings, Inc., a Delaware corporation. The Seller and the
Purchaser wish to amend Sections 1.2 and 1.3 of the Stock Purchase Agreement as
set forth below. Capitalized terms not otherwise defined herein have the
meanings set forth in the Stock Purchase Agreement.
Amendment No. 1, dated as of March 3, 1997, to the Stock Purchase
Agreement, dated as of December 20, 1996 (the "Stock Purchase Agreement"),
between Paxar Corporation, a New York corporation (the "Purchaser"), and Odyssey
Partners, L.P., a Delaware limited partnership (the "Seller").
1. Section 1.2 of the Stock Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
Purchase Price. The aggregate purchase price (the "Purchase
Price") for the Purchased Shares shall consist of (i)
$100,000,000 in cash (the "Cash Consideration") and (ii)
warrants (the "Paxar Warrants") to purchase (A) 1,000,000
shares of common stock, par value $.10 per share, of the
Purchaser (the "Paxar Common Stock") in accordance with the
terms and conditions of the Warrant Agreement attached hereto
as Exhibit A (the "A Warrants") and (B) 200,000 shares of
Paxar Common Stock in accordance with the terms and conditions
of the Warrant Agreement attached hereto as Exhibit B (the "B
Warrants"). The Warrant Agreements attached hereto as Exhibits
A and B hereto, each of which shall be executed at the
Closing, are referred to herein collectively as the "Warrant
Agreements". The Purchaser shall pay the Cash Consideration in
one installment of $94,083,750 (the "Initial Payment") at the
Closing and in one installment of $5,907,559 (the "Deferred
Payment") on January 2, 1998, in accordance with a promissory
note in the amount of the Deferred Payment (the "Note") in the
form of Exhibit C hereto, which Note shall be secured by a
Letter of Credit issued by Fleet Bank substantially in the
form of Exhibit D hereto (the "Letter of Credit"). The amount
of the Deferred Payment (and the Note) has been reduced by (i)
an administrative fee payable to the issuer of the Letter of
Credit in the amount of $7,691 and (ii) legal fees payable to
Shearman & Sterling, counsel to the issuer of the Letter of
Credit, in the amount of $1,000.
2. Section 1.3 of the Stock Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
The Closing. The parties will use their best efforts to cause
the closing of the purchase and sale of the Purchased Shares
(the "Closing") to take place no later than 10 business days
following the satisfaction of the conditions set forth in
Section 5.1(a) and (d) hereof. At the Closing, (a) the Seller
shall deliver to the Purchaser a certificate or certificates
evidencing the Purchased Shares to be sold
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to the Purchaser by the Seller, accompanied by duly executed
stock powers and all other necessary instruments of transfer,
(b) the Purchaser shall (i) pay to the Seller, by wire
transfer of immediately available funds, the Initial Payment,
(ii) deliver to the Seller the Note and the Letter of Credit
and (iii) issue and deliver to the Seller the Paxar Warrants
and (c) each party hereto shall otherwise perform all of its
obligations to be performed on or before the Closing
(including, without limitation, execution and delivery of the
Warrant Agreements and the Registration Rights Agreement
referred to in Section 4.10 (collectively, the Ancillary
Documents") and the obligations of the Purchaser under
Sections 4.3 and 4.4 hereof).
3. The parties agree that the Note attached to this Amendment No. 1 as
Exhibit C hereto shall, upon execution and delivery of this Amendment No. 1 by
the parties hereto, become Exhibit C to the Stock Purchase Agreement, and that
the Letter of Credit attached this Amendment No. 1 as Exhibit D hereto shall,
upon execution and delivery of this Amendment No. 1 by the parties hereto,
become Exhibit D to the Stock Purchase Agreement. The Purchaser represents and
warrants to the Seller that the Note, when issued and delivered at the Closing,
will be duly authorized, executed and delivered by the Purchaser.
4. The terms "this Agreement," "hereof," "hereunder" and words of like
meaning appearing in the Stock Purchase Agreement shall mean and refer to the
Stock Purchase Agreement as amended hereby. Except as otherwise amended by this
Amendment No. 1, the Stock Purchase Agreement shall remain in full force and
effect, and the Purchaser and the Seller each hereby reaffirm each of their
respective agreements, covenants and obligations set forth therein. This
Amendment No. 1 shall be governed by the laws of the State of New York, other
than the laws governing conflict of law matters and shall be binding upon and
inure to the benefit of the successors, heirs, and assigns of the respective
parties hereto. This Amendment No. 1 may be executed in counterparts, each of
which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 1
as of the date first above written.
THE PURCHASER: THE SELLER:
PAXAR CORPORATION ODYSSEY PARTNERS, L.P.
By: /s/ Jack Plaxe By: /s/ Stephen Berger
----------------------- ----------------------
Jack Plaxe Stephen Berger
Chief Financial Officer A General Partner
2
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 3, 1997 (the "Merger
Agreement"), among PAXAR CORPORATION, a New York corporation having offices at
105 Corporate Park Drive, White Plains, New York 10604 (Paxar), MONARCH
HOLDINGS, INC., a Delaware corporation having offices at 170 Monarch Lane,
Miamisburg, Ohio 45342 ("Monarch Holdings"), THOMAS LOEMKER, with an address at
50 Sunnie Holme Drive, Fairfield, Connecticut 06430("Loemker"), and JOHN PAXTON,
with an address at 9005 Cunningham Road, Cincinnati, Ohio 45243 ("Paxton").
Monarch Holdings is a corporation duly organized and existing under the
laws of the State of Delaware, and as of the date hereof has authority to issue
10,000 shares of Common Stock, par value $.01 per share (the "Monarch Holdings
Common Stock"), of which 1010 shares are issued and outstanding and no shares
are held in treasury.
Paxar is a corporation duly organized and existing under the laws of
the State of New York, and as of the date hereof, Paxar has authority to issue
100,000,000 shares of Common Stock, par value $.10 per share (the "Paxar Common
Stock"), of which 28,100,511 shares are issued and outstanding and no shares are
held in treasury and (ii) 5,000,000 shares of Preferred Stock, par value $.01
per share, of which no shares are issued and outstanding. Paxar is the owner of
990 shares of Monarch Holdings Common Stock.
Loemker is the owner of 10 shares of the Monarch Holdings Common Stock.
Paxton is the owner of 10 shares of the Monarch Holdings Common Stock.
The respective Boards of Directors of Paxar and Monarch Holdings have
determined that it is advisable and in the best interests of each of such
corporations that Monarch Holdings merge with and into Paxar upon the terms and
subject to the conditions set forth herein.
The respective Boards of Directors of Paxar and Monarch Holdings have
by resolutions duly adopted and approved this Merger agreement.
WHEREAS, Paxar has approved this Merger Agreement in its capacity as
the majority stockholder of Monarch Holdings.
WHEREAS, Loemker has consented in writing to the merger of Monarch
Holdings into Paxar.
WHEREAS, Paxton has consented in writing to the merger of Monarch
Holdings into Paxar.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. MERGER. Monarch Holdings shall be merged with and into Paxar
(the "Merger"), and Paxar shall be the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"). The Merger shall become
effective upon the date and time of filing an appropriate certificate of merger,
providing for the Merger, with the Secretary of State of New York and an
appropriate certificate of merger, providing for the Merger, with the Secretary
of State of Delaware, whichever later occurs (the "Effective Time").
Section 2. GOVERNING DOCUMENTS. The Certificate of Incorporation of
Paxar, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation without change or
amendment until thereafter amended in accordance with the provisions thereof and
applicable law. The Bylaws of Paxar, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation without change
or amendment until
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thereafter amended in accordance with the provisions thereof, the Certificate of
Incorporation of the Surviving Corporation and applicable law.
Section 3. SUCCESSION. At the Effective Time, the separate corporate
existence of Monarch Holdings shall cease, and Paxar shall succeed to all of the
assets and property (whether real, personal or mixed), rights, privileges,
franchise, immunities and powers of Monarch Holdings, and Paxar shall assume and
be subject to all of the duties, liabilities, obligations and restrictions of
every kind and description of Monarch Holdings including, without limitation,
all outstanding indebtedness of Monarch Holdings, all in the manner and as more
fully set forth in Section 906 of the New York Business Corporation Law and
Section 259 of the Delaware General Corporation Law.
Section 4. DIRECTORS. The directors of Paxar immediately preceding the
Effective Time shall be the directors of the Surviving Corporation at and after
the Effective Time until their successors are duly elected and qualified.
Section 5. OFFICERS. The officers of Paxar immediately preceding the
Effective Time shall be the officers of the Surviving Corporation at and after
the Effective Time until their successors are duly elected and qualified.
Section 6. FURTHER ASSURANCES. From time to time, as and when required
by the Surviving Corporation or by its successors or assigns, there shall be
executed and delivered on behalf of Monarch Holdings such deeds and other
instruments, and there shall be taken or caused to be taken by it all such
further and other action, as shall be appropriate, advisable or necessary in
order to vest, perfect or conform, of record or otherwise, in the Surviving
Corporation, the title to and possession of all property, interest, assets,
rights, privileges, immunities, powers, franchises and authority of Monarch
Holdings, and otherwise to carry out the purposes of this Merger Agreement, and
the officers and directors of the Surviving Corporation are fully authorized, in
the name and on behalf of Monarch Holdings or otherwise, to take any and such
action and to execute and deliver any and all such deeds and other instruments.
Section 7. CONVERSION OF SECURITIES. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof, each
share of Monarch Holdings Common Stock issued and owned by Loemker and Paxton
immediately prior to the Effective Time shall be changed and converted into
12,522.9 fully paid and nonassessable shares of Paxar Common Stock.
Section 8. COUNTERPARTS. This Merger Agreement may be executed in one
or more counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
Section 9. DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Merger Agreement.
Section 10. NEW YORK APPOINTMENT. The surviving Corporation hereby
agrees that it may be served with process in the State of New York in any action
or special proceeding for enforcement of any liability or obligation of Monarch
Holdings, Paxar or the Surviving Corporation arising from the Merger. The
Surviving Corporation appoints the Secretary of State of New York as its agent
to accept service of process of any such suit or other proceeding and a copy of
such process shall be mailed by the Secretary of State of the State of New York
to the Surviving Corporation at Paxar Corporation, 105 Corporate Park Drive,
White Plains, New York 10604-3814; Attn: Legal Department.
Section 11. GOVERNING LAW. This Merger Agreement shall be governed by
and construed in accordance with the laws of State of New York.
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IN WITNESS WHEREOF, Paxar, Monarch Holdings, Loemker and Paxton have
caused this Merger Agreement to be executed and delivered as of the date first
above written.
PAXAR CORPORATION
By: /s/ Arthur Hershaft
----------------------
Arthur Hershaft
Chairman
MONARCH HOLDINGS, INC.
By: /s/ John W. Paxton
----------------------
John W. Paxton
President
/s/ Thomas Loemker
--------------------------
Thomas Loemker
/s/ John W. Paxton
--------------------------
John W. Paxton
3
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NOTE
New York, New York U.S. $5,907,559.00
March 3, 1997
FOR VALUE RECEIVED, Paxar Corporation, a New York corporation
("Maker"), HEREBY PROMISES TO PAY TO Odyssey Partners, L.P., a Delaware limited
partnership ("Payee"), having a principal place of business at 31 West 52nd
Street, New York, New York 10019, the principal sum of $5,907,559.00, together
with interest thereon (as set forth below) on January 2, 1998, in lawful money
of the United States (the "Maturity Date").
1. This Note shall bear interest on all outstanding principal
(as well as on all accrued and unpaid interest) at an annual interest rate equal
to 4.88%, compounded quarterly.
2. Both principal and interest are payable to Payee upon the
Maturity Date at Maker's principal place of business or at such address or
account of Payee as Payee shall designate to Maker in writing not later than
five business days prior to the Maturity Date, in immediately available funds.
3. This Note may not be prepaid, in whole or in part, without
the consent of the Payee.
4. The following shall constitute Events of Default hereunder:
(a) Maker shall fail to pay when due any interest or principal hereunder; (b)
the dissolution or termination of existence of Maker; (c) the commencement of
any case, proceeding or other action by Maker under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up or liquidation with
respect to it or its debts; (d) the seeking by Maker of appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets; or an assignment for the benefit of its
creditors; or (e) the commencement against Maker of any case, proceeding or
other action of a nature referred to in clause (c) above which results in the
entry of any order for relief or any such adjudication or appointment which
remains undismissed, undischarged, unbonded or unstayed for a period of sixty
(60) days. If any such Event of Default shall occur, then the entire unpaid
principal amount of this Note and all interest accrued and unpaid hereon shall
automatically and immediately become due and payable, without presentment,
demand, protest and all other notices of any kind, all of which are hereby
expressly waived by Maker.
5. Demand, presentment for payment, notice of dishonor,
protest and notice of protest are hereby waived by Maker.
6. This Note may not be changed orally and in any event, no
amendment, modification or waiver of any term or provision of this Note, nor any
consent to any departure by Maker therefrom shall be effective unless in writing
and signed by the party against whom enforcement of such amendment,
modification, waiver or change, is sought.
7. No failure on the part of Payee to exercise, and no delay
in exercising, any right or remedy hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise by Payee of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies provided herein are cumulative
and not exclusive and are in addition to all others that may be provided by
applicable law and other agreements and documents.
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8. In receipt of evidence reasonably satisfactory to Maker of
the loss, theft, destruction or mutilation of this Note, and upon receipt of an
indemnity bond reasonably satisfactory to Maker, Maker will, at the expense of
Payee, execute and deliver, in lieu thereof, a new Note of like tenor.
9. This Note shall be binding upon Maker and its successors
and shall inure to the benefit of Payee and its successors.
10. This Note is that certain "Note" referred to in, and is
secured by, a Letter of Credit, dated the date hereof, issued by Fleet Bank in
favor of the holder of this Note.
11. The terms and provisions of this Note are severable, and
if any term or provision shall be determined to be superseded, illegal, invalid
or otherwise unenforceable in whole or in part pursuant to applicable law by a
governmental authority having jurisdiction, such determination shall not in any
manner impair or otherwise affect the validity, legality or enforceability of
that term or provision in any other jurisdiction or any of the remaining terms
and provisions of this Note in any jurisdiction.
12. Maker's obligations under this Note are unconditional and
shall not be subject to set off or deduction in any manner or for any reason
whatsoever, including without limitation, any liability or obligation of Odyssey
Partners, L.P. ("Odyssey") under the Stock Purchase Agreement, dated as of
December 20, 1996, as amended by Amendment No. 1 to Stock Purchase Agreement,
dated as of March 3, 1997, between Maker and Odyssey.
13. This Note shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered by its duly authorized officer as of the date first above written.
PAXAR CORPORATION
By: /s/ Jack Plaxe
-----------------------
Jack Plaxe
Chief Financial Officer
2
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Fleet Bank N.A.
c/o Fleet Pennsylvania Services Inc.
Trade Services Department - Standby Unit
1 Fleet Way
Scranton, PA 18507-1999
Telephone: 1-800-370-7519 Ext. 4214
Facsimile: (717) 330-4187
Date: March 03, 1997
Irrevocable Standby Letter of Credit Number H-179208
Beneficiary: Applicant:
Odyssey Partners, L.P. PAXAR Corporation
31 West 52nd Street 105 Corporate Park Drive
New York, NY 10019 White Plains, NY 10604
Amount: USD 6,153,008.00
Expiry Date: January 31, 1998
Expiry Place: Our Counters
Gentlemen:
We hereby issue this irrevocable letter of credit No. H179208 in your favor, for
the account of PAXAR Corporation for USD 6,153,008.00 (Six Million One Hundred
Fifty-Three Thousand Eight and 00/100 U.S. Dollars), available by your draft(s)
drawn on us at sight, accompanied by the following:
1. Beneficiary's dated written statement on their letterhead signed by a
purported authorized signatory stating:
QUOTE
The undersigned hereby certifies that an "Event of Default" has occurred under
that certain promissory note, dated March 3, 1997, of PAXAR Corporation in favor
of Odyssey Partners L.P. The undersigned hereby demands payment of US $_______
(representing the amount of unpaid principal and accrued interest outstanding
under the Promissory Note) under this irrevocable letter of credit. We further
certify that we have returned the original promissory note to PAXAR Corporation
by courier.
UNQUOTE
2. The original of this Letter of Credit and Amendment(s), if any.
Only one drawing is permitted under this Letter of Credit up to the full amount
of this Letter of Credit.
Drafts(s) must state: "Drawn under Fleet Bank N.A. Standby L/C No. H179208 Dated
March 03, 1997.
Draft(s) and documents must be presented at our offices at 175 Water Street New
York, NY 10038, Attn: Trade, Services Dept. - Standby Unit.
We hereby agree with you that documents drawn under and in strict compliance
with the terms of this Letter of Credit shall be duly honored upon due
presentation to us.
<PAGE> 2
This credit is subject to the Uniform Customs and Practice for documentary
credits (1993 Revision), the International Chamber of Commerce, Publication No.
500.
/s/ George Pailey
--------------------
Authorized Signature
<PAGE> 1
EXECUTION COPY
================================================================================
REGISTRATION RIGHTS AGREEMENT
between
PAXAR CORPORATION
and
ODYSSEY PARTNERS, L.P.
-----------------------------------
Dated as of March 3, 1997
----------------------------------
================================================================================
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of March
3, 1997, between Odyssey Partners, L.P., a Delaware limited partnership
("Odyssey"), and Paxar Corporation, a New York corporation (the "Company").
Capitalized terms used herein but not otherwise defined shall have the meanings
given to them in Section 1 of this Agreement.
WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of December 20, 1996, between the Company and
Odyssey, the Company is today purchasing from Odyssey all of the issued and
outstanding shares of Common Stock, par value $.01 per share, of Monarch
Holdings, Inc., a Delaware corporation, owned by Odyssey (the "Purchased
Shares"); and
WHEREAS, the Stock Purchase Agreement contemplates that, in
partial consideration for the purchase and sale of the Purchased Shares, the
Company will issue to Odyssey warrants (the "Warrants") representing the right
of the holder thereof to purchase from the Company shares of common stock, par
value $.10 per share, of the Company (including any other capital stock of the
Company into which such stock is reclassified or reconstituted, the "Common
Stock"), in accordance with the terms of separate Warrant Agreements, dated the
date hereof (the "Warrant Agreements") and annexed as Exhibits A and B to the
Stock Purchase Agreement; and
WHEREAS, the Company has agreed to grant to Odyssey and to the
Holders (as defined below) the registration rights set forth herein, and to file
a registration statement under the Securities Act of 1933, as amended, to
register the shares of Common Stock issuable upon exercise of the Warrants.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
"Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder.
"Approved Underwriter" has the meaning assigned such
term in Section 3.3.
"Approved Underwriter Amount" has the meaning
assigned such term in Section 3.4(c).
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York are
authorized or required by law or executive order to close.
"Common Stock" has the meaning assigned such term in
the recitals to this Agreement.
"Company Underwriter" has the meaning assigned such
term in Section 4.3.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC thereunder.
"Holder" means each owner of the Warrants and each
person who, from time to time, owns (or has the right to receive) Registrable
Securities. The initial Holder as of the date hereof is Odyssey.
"Indemnified Party" has the meaning assigned such
term in Section 8.3.
"Indemnifying Party" has the meaning assigned such
term in Section 8.3.
<PAGE> 3
2
"Initiating Holders" has the meaning assigned such
term in Section 3.1.
"Inspector" has the meaning assigned such term in
Section 6.1(i)(iv).
"NASD" means the National Association of Securities
Dealers, Inc.
"Odyssey" has the meaning assigned such term in the
recitals to this Agreement.
"Person" means any individual, firm, corporation,
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of any such entity.
"Piggyback Registration Statement" has the meaning
assigned such term in Section 4.1.
"Registrable Securities" means each of the following:
(a) shares of Common Stock issuable upon exercise of the Warrants and (b)
securities issued or issuable in respect of shares of Common Stock issued,
issuable or held pursuant to clause (a) above by way of a dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. Registrable Securities will
cease to be Registrable Securities when (i) a registration statement covering
such Registrable Securities has been declared effective under the Act by the SEC
and such Registrable Securities have been disposed of pursuant to such effective
registration statement or (ii) such Registrable Securities have been disposed of
pursuant to Rule 144 under the Act. For all purposes of this Agreement, a Holder
shall be deemed to hold Registrable Securities if it has the right to receive
such Registrable Securities upon the exercise of any option, right, warrant or
convertible security.
"Registration Expenses" has the meaning assigned such
term in Section 7.
"Registration Statement" means the Shelf Registration
or the S-1 Registration Statement, as the context may require.
"S-1 Registration Statement" has the meaning assigned
such term in Section 2.2.
"SEC" means the Securities and Exchange Commission or
such other governmental authority as is, from time to time, charged with similar
functions.
"Shelf Registration" has the meaning assigned to such
term in Section 2.1.
"Suspension Notice" has the meaning assigned such
term in Section 3.5(a).
"Total Securities" has the meaning assigned such term
in Section 4.3.
"Underwritten Offering" has the meaning assigned such
term in Section 3.1.
<PAGE> 4
3
"Valid Business Reason" has the meaning assigned such
term in Section 3.5.
"Warrants" has the meaning assigned such term in the
recitals to this Agreement.
"Warrant Agreements" has the meaning assigned such
term in the recitals to this Agreement.
2. Filing of Registration Statement.
2.1 Shelf Registration. The Company shall file, within one year
following the date hereof, a "shelf" registration statement
with respect to the offer and resale of the Registrable
Securities on Form S-3 under Rule 415 under the Act, if such
form is then available to the Company (the "Shelf
Registration"). The Company shall use its best efforts to have
the Shelf Registration declared effective as soon as
reasonably practicable after filing.
2.2 S-1 Registration Statement. In the event that Form S-3 is not
available to the Company as contemplated by Section 2.1, then
the Company will, promptly following each request for an
Underwritten Offering under Section 3 hereof, file, and use
its best efforts to have declared effective, a Registration
Statement on Form S-1, or such other form as shall then be
available (the "S-1 Registration Statement"), covering the
offer and resale of the Registrable Securities that are the
subject of such Underwritten Offering.
2.3 Limit on Sales Pursuant to Shelf Registration. All sales of
Registrable Securities under the Shelf Registration not made
in an Underwritten Offering in accordance with Section 3
hereof shall be subject to the following limitations:
(a) Any such sales shall be made in connection with an
offer by a Holder to sell the lesser of (i) 100,000
shares of Common Stock (for this purpose, the number
of shares shall be determined without regard to any
"cashless" exercise of warrants pursuant to clause
(iii) of Section 2.3 of the Warrant Agreements) and
(ii) all remaining Registrable Securities held by
such Holder; and
(b) Such Holder will give the Company three business
days' prior notice of its intention to make any such
sales, during which period the Company may offer to
purchase such securities, or introduce such Holder to
a third party interested in purchasing such
securities (provided that (i) in no event shall the
giving of such notice bind such Holder to effect any
sales of Registrable Securities and (ii)
notwithstanding any offer from the Company or a third
party to purchase such Holder's Registrable
Securities, such Holder will be free to sell such
Registrable Securities pursuant to the Shelf
Registration and not to the Company or such third
party).
3. Request for Underwritten Offering.
3.1 Underwritten Offering. Subject to the terms and conditions of
this Section 3, on and after the first anniversary of the date
of this Agreement, one or more Holders may request that the
Company use its best efforts to assist such Holders in
effecting an underwritten public offering of Registrable
Securities pursuant to the Registration Statement. Each such
underwritten public offering under this Section 3 shall be
referred to herein as an "Underwritten Offering," and the
Holder or Holders requesting such Underwritten Offering shall
be referred to herein as the "Initiating Holders"). Each
request for an Underwritten
<PAGE> 5
4
Offering shall specify the number or amount of Registrable
Securities proposed to be sold, the intended method of
disposition thereof and the jurisdictions in which the
Initiating Holders desire to offer and sell such Registrable
Securities. Upon a request by the Initiating Holders for an
Underwritten Offering, the Company shall, in consultation and
in cooperation with the Initiating Holders, promptly take such
steps as are reasonably necessary or appropriate to assist the
Initiating Holders in effecting such Underwritten Offering.
3.2 Offer to Holders. The Company shall give prompt written notice
to the Holders (other than the Initiating Holders) of each
request for an Underwritten Offering, and, on behalf of the
Initiating Holders, the Company shall offer to include in such
Underwritten Offering all or a portion of the Registrable
Securities held by such other Holders, subject to the
conditions and limitations set forth herein. The Initiating
Holders shall, subject to the conditions and limitations set
forth in this Section 3, include in such Underwritten Offering
all Registrable Securities that each such other Holder (by
written notice to the Company within 20 days of receipt by
such other Holder of the notice and offer from the Company)
elects to include in such Underwritten Offering. The Company
will notify the Initiating Holders of the identity of each
such other Holder that elects to include Registrable
Securities in such Underwritten Offering, and of the number or
amount of Registrable Securities that each such other Holder
has elected to include in such Underwritten Offering. Those
other Holders that elect to include Registrable Securities in
such Underwritten Offering shall be included within the
definition of "Initiating Holders" for purposes of this
Agreement.
3.3 Underwriter. The offer and sale of Registrable Securities in
an Underwritten Offering shall be in the form of a firm
commitment underwritten offering. The managing underwriter or
underwriters selected for such offering shall be an investment
banking firm of national reputation selected by the Company,
and reasonably acceptable to Initiating Holders representing a
majority of the Registrable Securities held by all Initiating
Holders to be included in the Underwritten Offering (the
"Approved Underwriter"). The Company and the Initiating
Holders shall enter into an underwriting agreement with the
Approved Underwriter in customary form reasonably satisfactory
to the Company and Initiating Holders holding a majority of
the Registrable Securities held by all Initiating Holders.
3.4 Conditions and Limitations on Underwritten Offerings. The
obligations of the Company with respect to each Underwritten
Offering are subject to the following conditions and
limitations:
(a) An Underwritten Offering may be requested by (i) in
the case of the first request for an Underwritten
Offering, Holders representing at least 50% of the
Registrable Securities held by all Holders at the
time of the request (but in no event less than
Registrable Securities that comprise or derive from
700,000 shares of Common Stock), and (ii) in the case
of the second such request, Holders of Registrable
Securities that comprise or derive from at least
300,000 shares of Common Stock.
(b) In no event shall the Company be required to effect
more than two Underwritten Offerings. If (i) an
Underwritten Offering shall be suspended or
terminated pursuant to Section 3.5 and following such
cancellation or delay a majority of the Initiating
Holders holding a majority of the Registrable
Securities held by all Initiating Holders elect not
to proceed with such offering as provided in Section
3.5(d)(i), (ii) during the pendency of such
Underwritten Offering, the Company shall deliver a
notice pursuant to Section 6.1(g) and such
Underwritten Offering is terminated or suspended, or
(iii) such Underwritten Offering is cancelled
pursuant to Section 3.4(e)(ii), then in each case
such offering will not count as a request for an
Underwritten Offering under this Section 3.4(b).
<PAGE> 6
5
(c) If the Approved Underwriter advises the Company and
the Initiating Holders in writing that, in its
opinion, the aggregate number or amount of
Registrable Securities requested to be included in
the Underwritten Offering is sufficiently large to
have an adverse effect on the success of such
Underwritten Offering, then the Initiating Holders
shall include in such offering only the aggregate
number or amount of Registrable Securities that, in
the opinion of the Approved Underwriter, may be sold
without any such effect on the success of such
Underwritten Offering (the "Approved Underwriter
Amount"), and each Initiating Holder shall be
entitled to have included in such Underwritten
Offering a number of Registrable Securities equal to
its pro rata share of the Approved Underwriter
Amount, determined on the basis of the number or
amount of Registrable Securities sought to be
registered each by such Initiating Holder in its
request for participation in the Underwritten
Offering.
(d) Any Initiating Holder may elect to withdraw its
request to include Registrable Securities in an
Underwritten Offering, or may reduce the number or
amount to be included; provided, however, that (i)
such request must be made prior to the earlier of the
execution of the underwriting agreement or the
execution of the custody agreement with respect to
such registration, (ii) such withdrawal or reduction
shall be irrevocable and (iii) notwithstanding such
withdrawal or reduction, except as otherwise provided
herein such offering shall nonetheless count as one
of the two Underwritten Offerings permitted under
this Section 3.
(e) The Company shall not be required to assist the
Holders with an Underwritten Offering (i) that would
take place during the "holdback" period applicable to
the Holders under Section 5.2 or (ii) in the event
that the Company elects (which election shall be
effective upon written notice thereof to the
Initiating Holders), following the delivery of a
request for an Underwritten Offering but prior to the
execution of the underwriting agreement or the
execution of the custody agreement with respect to
such Underwritten Offering, to effect a public
offering of equity securities for its own account,
provided that the Holders are afforded registration
rights with respect to such offering pursuant to
Section 4 hereof.
3.5 Suspension or Termination of Registration and Sales; Valid
Business Reason. In the event that the Board of Directors of
the Company, in its good faith judgment, determines that the
sale of Registrable Securities pursuant to the Registration
Statement would materially interfere with any material
financing, acquisition, corporate reorganization or merger or
other material transaction or otherwise would, as a result of
one or more material, nonpublic corporate developments with
respect to the Company, subject the Company to liability for
violation of applicable securities laws (a "Valid Business
Reason"), then the following provisions shall apply:
(a) At any time when a Valid Business Reason shall exist,
the Company may, by notice (a "Suspension Notice") to
the Holders:
(i) suspend any further efforts with respect to
any Underwritten Offering that is then in
process ;
(ii) instruct the Holders to cease any further
sales under the Registration Statement until
further notice; and/or
<PAGE> 7
6
(iii) suspend the effectiveness of the Registration
Statement until such Valid Business Reason no
longer exists.
The Company shall not be entitled to deliver a
Suspension Notice in the event that an Initiating
Holder has executed a binding underwriting agreement
with an Approved Underwriter (or similar
undertaking), and where compliance by such Initiating
Holder with the terms of the Suspension Notice would
cause such Initiating Holder to be in breach of its
obligations thereunder.
(b) Each Holder agrees that, upon receipt of a Suspension
Notice, or the happening of any event of the kind
described in Section 6.1(g), such Holder shall
forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement
covering such Registrable Securities until (as
applicable) the end of such suspension period (as
provided in Section 3.5(d) below) or such Holder's
receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.1(g) and, if so
directed by the Company, such Holder shall deliver to
the Company (at the Company's expense) all copies,
other than permanent file copies then in such
Holder's possession, of the prospectus covering such
Registrable Securities which is current at the time
of receipt of such notice.
(c) If the Company shall deliver a Suspension Notice, the
period during which such Registration Statement shall
be maintained effective pursuant to Section 6.1(a)
shall automatically be extended by the number of days
during the period (as applicable) in which such
Suspension Notice shall remain in effect, or from and
including the date of the giving of such notice
pursuant to Section 6.1(g) to and including the date
when the Holder shall have received the copies of the
supplemented or amended prospectus contemplated by
and meeting the requirements of Section 6.1(g).
(d) At such time as, following the delivery of a
Suspension Notice, a Valid Business Reason shall no
longer exist, the Company shall promptly inform the
Holders of such fact, whereupon, to the extent
applicable:
(i) the Company's obligations with respect to
any Underwritten Offering that was in
process at the time of the Suspension Notice
shall be restored, unless Initiating Holders
representing a majority of the Registrable
Securities held by all Initiating Holders
shall elect not to proceed with such
Underwritten Offering within 10 business
days after such Holders are so notified that
such valid Business Reasons shall no longer
exist (in which case the Company shall not
be considered to have effected an
Underwritten Offering for purposes of
Section 3.4(b) hereof), in which event such
Underwritten Offering shall be terminated as
to all Registrable securities covered by
such offering.
(ii) the Holders shall be entitled to resume
sales of Registrable Securities pursuant to
the Registration Statement; and
(iii) the Company shall use its best efforts to
cause the Registration Statement to once
again become effective.
<PAGE> 8
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4. Piggy-Back Registration Rights.
4.1 Notice to Holders. Subject to the terms and conditions of this
Section 4, the Company shall give each Holder 30 days' prior
written notice of the filing of any registration statement
under the Act relating to an offering by the Company for its
own account or the account of any other Person of any class of
security comprising Registrable Securities (other than a
registration statement on Form S-4 or S-8 (or any successor
form thereto), or with respect to any offering to be made
prior to the first anniversary of the date of this Agreement).
(Any such registration statement is referred to herein as a
"Piggyback Registration Statement".) Such notice shall
describe in detail the proposed registration and the related
distribution of such securities, and offer each Holder the
opportunity to include in such Piggyback Registration
Statement all or a portion of those Registrable Securities
held by such Holder that are part of the class or classes of
securities to be registered pursuant to such Piggyback
Registration Statement. Each Holder may accept such offer by
giving written notice of acceptance (specifying the number or
amount of Registrable Securities that such Holder desires to
be registered and sold) within 15 days of receipt of the
Company's notice. The Company shall, subject to the terms and
conditions of this Section 4, include in such Piggyback
Registration Statement and related distribution those
Registrable Securities which the Holders indicated in their
notice of acceptance that they desire to include in such
Offering, on the same terms and conditions as the securities
of the Company included therein.
4.2 Limitation on Number of Piggyback Rights. The Holders shall be
entitled to exercise the rights set forth in this Section 4 on
no more than three occasions (and the Company's obligation to
notify the Holders of the filing of any Piggyback Registration
Statement pursuant to Section 4.1 shall expire once the
Holders shall have exercised such right on three occasions).
For purposes of this Section 4.2, the Holders shall be deemed
not to have exercised their rights with respect to any
Piggyback Registration Statement:
(a) in which the Holders are unable (as a result of the
provisions of Section 4.3 or otherwise) to include in
such Piggyback Registration Statement all Registrable
Securities with respect to which the Holders
requested registration;
(b) withdrawn by the Company pursuant to Section 4.4;
(c) in which at least a majority of the Registrable
Securities originally requested to be included in
such Piggyback Registration Statement are withdrawn
from such request following a delay in such
registration pursuant to Section 4.4(b) below; or
(d) in which the Company voluntarily registers fewer than
the minimum number of shares of Common Stock
specified in Section 4.6.
4.3 Cut-Back Provisions. Notwithstanding the foregoing, if any
Piggyback Registration Statement involves an underwritten
offering, and the managing underwriter or underwriters of such
offering (the "Company Underwriter") shall advise the Company
and the Holders in writing that, in its opinion, the total
number or amount of securities requested to be included in
such offering (the "Total Securities") is sufficiently large
so as to have an adverse effect on the success of the
distribution of the Total Securities, then the Company shall
include in such registration only that number of shares of
each class of securities comprising Registrable Securities
which the Company is so advised can be sold in (or during the
time of) such offering without having such adverse effect,
allocated pro rata among the Company, each Holder, and each
other Person that requested securities to be registered
pursuant to such Piggyback Registration Statement in
accordance with the ratio that the
<PAGE> 9
8
number or amount of Common Stock or such Registrable
Securities that the Company, such Holder or such other Person
sought to register as part of the Total Securities bears to
the Total Securities.
4.4 Withdrawal of Registration Statement. If, at any time after
giving written notice to the Holders of its intention to
register any securities pursuant to a Piggyback Registration
Statement, and prior to the effective date thereof, the
Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its
election, give written notice of such determination to all
Holders, whereupon:
(a) in the case of a determination not to register, the
Company shall be relieved of its obligation to
register the Registrable Securities in connection
with such abandoned registration; and
(b) in the case of a determination to delay the
registration of its securities, the Company shall be
permitted to delay the registration of such
Registrable Securities for the same period as the
delay in registering such other securities.
4.5 Withdrawal of Piggyback Request. Any Holder shall have the
right to withdraw its request for inclusion of its Registrable
Securities in any Piggyback Registration Statement pursuant to
this Section 4 by giving written notice to the Company of its
request to withdraw; provided, however, that (i) such request
must be made in writing prior to the earlier of the execution
of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (ii) such
withdrawal shall be irrevocable and, after making such
withdrawal, a Holder shall no longer have any right to include
Registrable Securities in the registration as to which such
withdrawal was made. Notwithstanding such withdrawal, a
request by the Holders for inclusion in such registration
shall count as one of the three available requests under
Section 4.2 above, except as provided in Section 4.2(c).
4.6 Minimum Piggyback Amount. The Company shall not be obligated
to register any Registrable Securities representing the lesser
of (a) Registrable Securities that comprise or derive from
100,000 shares of Common Stock and (b) all outstanding
Registrable Securities.
4.7 Certain Limitations on Registration Rights. No Person other
than the Company and the Holders may participate in any
registration and distribution in which the Holders are
participating pursuant to this Section 4, unless such Person
(a) agrees to sell such Person's securities on the basis
provided therein and (b) completes and executes all
questionnaires, powers of attorney, indemnities, lock-up
agreements, underwriting agreements and other documents
required by the Company Underwriter under the terms of such
underwriting agreements.
5. Holdback Agreement.
5.1 Restrictions on Public Sale by Holders. Each Holder agrees
that during the 90-day period commencing on the effective date
of a registration statement of the Company filed under the Act
(other than the Shelf Registration, a registration statement
on Form S-8 or any successor form, or a registration in which
the Holders are not afforded the opportunity to participate
pursuant to Section 4 hereof) covering securities of the same
class as any Registrable Securities, it will not effect any
public sale or distribution of such Registrable Securities (or
any securities convertible into or exchangeable or exercisable
for such Registrable Securities), including a sale pursuant to
the Shelf Registration or pursuant to Rule 144 under the Act,
except pursuant to such registration statement. Each Holder
will, upon request, execute a customary "lockup" agreement
consistent with the terms of this Section 5.1.
<PAGE> 10
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5.2 Restrictions on Public Sale by the Company. Except as
permitted by Section 3.5, the Company agrees not to effect any
public sale or distribution of any of its securities for its
own account or for the account of any third party (except
pursuant to the Registration Statement or a registration on
Form S-4 or S-8 (or any successor form thereto) under the Act)
during the period commencing on the date on which the
Initiating Holders deliver any request for an Underwritten
Offering, and ending 90 days following the execution of the
underwriting agreement relating to such Underwritten Offering.
In connection with any Underwritten Offering, the Company
will, upon request by Initiating Holders representing a
majority of the Registrable Securities held by all Initiating
Holders, execute a customary "lockup" agreement consistent
with the terms of this Section 5.2.
6. Registration Procedures.
6.1 Obligations of the Company. In connection with any
Registration Statement (or any Underwritten Offering
thereunder) or Piggyback Registration Statement covering
Registrable Securities, the Company shall:
(a) subject to Section 3.5, prepare and file with the SEC
such amendments and supplements to such Registration
Statement and the prospectus used in connection
therewith (including, without limitation, any
post-effective amendment or pricing supplement
necessary to include a form of prospectus reasonably
requested by any Approved Underwriter) as may be
necessary to keep such Registration Statement
continuously effective and to comply with the
registration form used by the Company or by the
instructions applicable to such registration form or
by the Act (and use its best efforts to have such
amendments declared effective as soon as reasonably
practicable after such filing),
(i) in the case of the Shelf Registration, until
the earlier of (A) such time as all of such
Registrable Securities have been disposed of
in accordance with the intended methods of
disposition or otherwise by the sellers
thereof set forth in such Registration
Statement and (B) one year following the
date on which the Warrants shall cease to be
exercisable in accordance with their terms
under the Warrant Agreements; and
(ii) in the case of the S-1 Registration
Statement or the Piggyback Registration
Statement, until the earlier of (A) 90 days
following the effectiveness of such
Registration Statement and (B) such time as
all of such Registrable Securities have been
disposed of in accordance with the intended
methods of disposition or otherwise by the
sellers thereof set forth in such
Registration Statement;
(b) provide appropriate officers (including, if
requested, the Company's Chief Executive Officer and
Chief Financial Officer) for such reasonable periods
as are requested by an Approved Underwriter to
participate in a "road show" or similar marketing
effort being conducted by such underwriter with
respect to an Underwritten Offering;
(c) upon request, provide any Holder that is the owner of
10% or more of the outstanding Registrable Securities
with a list of Holders, their respective ownership
<PAGE> 11
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of the Registrable Securities and contact
information, which shall be used solely for purposes
of this Agreement;
(d) as soon as reasonably possible, furnish to each
seller of Registrable Securities, prior to filing a
registration statement or any supplement or amendment
thereto covering such Registrable Securities, copies
of such registration statement, supplement or
amendment as it is proposed to be filed, and
thereafter such number of copies of such registration
statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the
prospectus included in such registration statement
(including each preliminary prospectus) and such
other documents as each such seller may reasonably
request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(e) use its reasonable best efforts to register or
qualify such Registrable Securities under such
securities or blue sky laws of such jurisdictions as
any seller of Registrable Securities may request, and
to continue such qualification in effect in each such
jurisdiction for as long as is permissible pursuant
to the laws of such jurisdiction, or for as long as
any such seller requests or until all of such
Registrable Securities are sold, whichever is
shortest, and do any and all other acts and things
which may be reasonably necessary or advisable to
enable any such seller to consummate the disposition
in such jurisdictions of the Registrable Securities
owned by such seller; provided, however, that the
Company shall not be required to qualify in any state
which requires, as a condition of such qualification,
that the Company (A) qualify generally to do business
in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6.1(e), (B)
subject itself to taxation in any such jurisdiction
or (C) consent to general service of process in any
such jurisdiction;
(f) notify each seller of Registrable Securities pursuant
to any Registration Statement or Piggyback
Registration Statement of any stop order issued or
threatened by the SEC, and take all reasonable action
required to prevent the entry of such stop order or
to remove it if entered;
(g) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required
to be delivered under the Act, upon discovery that,
or upon the happening of any event as a result of
which, the prospectus included in such registration
statement contains an untrue statement of a material
fact or omits to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading in light of the circumstances
under which they were made, and, subject to Section
3.5, the Company shall promptly prepare a supplement
or amendment to such prospectus so that, after
delivery of such supplement or amendment to the
purchasers of such Registrable Securities, such
prospectus, as so amended or supplemented, shall not
contain an untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein
not misleading in light of the circumstances under
which they were made;
(h) use its best efforts to obtain all other approvals,
covenants, exemptions or authorizations from such
governmental agencies or authorities as may be
necessary to enable the sellers of such Registrable
Securities to consummate the disposition of such
Registrable Securities, and without limiting the
foregoing, cooperate with
<PAGE> 12
11
each seller of Registrable Securities and each
underwriter participating in the disposition of such
Registrable Securities and underwriters' counsel in
connection with any filings required to be made with
the NASD;
(i) enter into and perform customary agreements and take
such other actions as are reasonably required in
order to expedite or facilitate the disposition of
such Registrable Securities, and without limiting the
foregoing:
(i) obtain a "cold comfort" letter from the
Company's independent public accountants in
customary form and covering such matters of
the type customarily covered by "cold
comfort" letters, as the Approved
Underwriter may reasonably request;
(ii) furnish, at the request of any seller of
Registrable Securities on the date such
securities are delivered to the underwriters
for sale pursuant to an Underwritten
Offering or Piggyback Registration or, if
such securities are not being sold through
underwriters, on the date the registration
statement with respect to such securities
becomes effective, an opinion, dated such
date, of counsel representing the Company
for the purposes of such registration,
addressed to the underwriters, if any, and
to the seller making such request, covering
such legal matters with respect to the
registration in respect of which such
opinion is being given as such seller may
reasonably request and as are customarily
included in such opinions;
(iii) provide officers' certificates and other
customary closing documents;
(iv) make available for inspection the Approved
Underwriter participating in any disposition
pursuant to such registration statement, and
any attorney, accountant or other agent
retained by the Approved Underwriter (each,
an "Inspector" and, collectively, the
"Inspectors"), all financial and other
records, pertinent corporate documents and
properties of the Company and any
subsidiaries thereof as may be in existence
at such time as shall be reasonably
necessary to enable them to exercise their
due diligence responsibility, and cause the
Company's and any subsidiaries' officers,
directors and employees, and the independent
public accountants of the Company, to supply
all information reasonably requested by any
such Inspector in connection with such
registration statement; and
(v) otherwise use its reasonable best efforts to
comply with all applicable rules and
regulations of the SEC, including without
limitation Section 11(a) of the Act;
(j) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each
securities exchange on which similar securities
issued by the Company are then listed;
(k) include in the Registration Statement for any
Underwritten Offering subject to Section 3 hereof
such information as the Approved Underwriter shall
reasonably request; and
<PAGE> 13
12
(l) use its best efforts to take all other steps
necessary to effect the registration and sale of the
Registrable Securities contemplated hereby.
6.2 Seller Information. The Company may require as a condition
precedent to the Company's obligations under this Section 6
that each seller of Registrable Securities as to which any
registration is being effected furnish to the Company such
information regarding such seller and the distribution of such
securities as the Company may from time to time reasonably
request in writing.
7. Registration Expenses. The Company shall pay all of its expenses (other than
underwriting discounts and commissions payable with respect to the sale of the
Registable Securities) arising from or incident to the performance of, or
compliance with, this Agreement and any Registration Statement (including any
Underwritten Offering pursuant thereto) or Piggyback Registration Statement,
including, without limitation, (a) SEC, stock exchange and NASD registration and
filing fees, (b) all fees and expenses incurred in complying with securities or
blue sky laws (including, without limitation, reasonable fees, charges and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (c) all printing, messenger and customary delivery
expenses, (d) the fees, charges and disbursements of counsel to the Company and
of its independent public accountants and any other accounting and legal fees,
charges and expenses incurred by the Company (including, without limitation, any
expenses arising from any special audits required in connection with any
registration) and (e) the reasonable fees, charges and expenses of any special
experts retained by the Company in connection with any registration pursuant to
the terms of this Agreement, regardless of whether the registration statement
filed in connection with such registration is declared effective. All of the
expenses described in this Section 7 are referred to in this Agreement as
"Registration Expenses." The Holders of the Registrable Securities being offered
shall pay all underwriting discounts and commissions, all expenses of counsel
and other experts retained by Holders representing a majority of the Registrable
Securities being offered, transfer taxes, if any, attributable to the sale of
such Registrable Securities, in each case pro rata according to the number or
amount of Registrable Securities sold by each such Holder.
8. Indemnification; Contribution.
8.1 Indemnification by the Company. In the event of any proposed
registration of securities of the Company pursuant to Section
3 or 4, the Company agrees to indemnify and hold harmless each
Holder, its directors, officers, partners, employees, advisors
and agents, and each Person who controls (within the meaning
of the Act or the Exchange Act) such Holder, to the extent
permitted by law, from and against any and all losses, claims,
damages, expenses (including, without limitation, reasonable
costs of investigation and fees, disbursements and other
charges of counsel) or other liabilities resulting from or
arising out of or based upon any untrue, or alleged untrue,
statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or
notification or offering circular (as amended or supplemented
if the Company shall have furnished any amendments or
supplements thereto) or any document incorporated by reference
in any of the foregoing or arising out of or based upon any
omission or alleged 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, except insofar as the same are
caused by or contained in any information furnished in writing
to the Company by or on behalf of such Holder expressly for
use therein. The Company shall also indemnify any underwriters
of the Registrable Securities, their officers, directors and
employees, and each Person who controls any such underwriter
(within the meaning of the Act and the Exchange Act) to the
same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities.
<PAGE> 14
13
8.2 Indemnification by Holders. In connection with any proposed
registration in which a Holder is participating pursuant to
Section 3 or 4 hereof, each such Holder shall furnish to the
Company in writing such information with respect to such
Holder as the Company may reasonably request or as may be
required by law for use in connection with any registration
statement or prospectus to be used in connection with such
registration and each Holder agrees to indemnify and hold
harmless the Company, any underwriter retained by the Company
and their respective directors, officers, employees and each
Person who controls (within the meaning of the Act and the
Exchange Act) the Company or such underwriter to the same
extent as the foregoing indemnity from the Company to the
Holders (subject to the proviso to this sentence and
applicable law), but only with respect to any such information
furnished in writing by or on behalf of such Holder expressly
for use therein; provided, however, that the liability of any
Holder under this Section 8.2 shall be limited to the amount
of the net proceeds received by such Holder in the offering
giving rise to such liability.
8.3 Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Party") agrees to
give prompt written notice to the indemnifying party (the
"Indemnifying Party") after the receipt by the Indemnified
Party of any written notice of the commencement of any action,
suit, proceeding or investigation or threat thereof made in
writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement;
provided, that, the failure so to notify the Indemnifying
Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party hereunder.
If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party
shall be entitled to participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own
expense, with counsel chosen by it and reasonably satisfactory
to such Indemnified Party. The Indemnified Party shall have
the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses
of such counsel (other than reasonable costs of investigation)
shall be paid by the Indemnified Party unless (i) the
Indemnifying Party agrees to pay the same, (ii) the
Indemnifying Party fails to assume the defense of such action
with counsel satisfactory to the Indemnified Party in its
reasonable judgment, or (iii) the named parties to any such
action (including any impleaded parties) have been advised by
such counsel that representation of such Indemnified Party and
the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional
conduct; provided, however, that the Indemnifying Party shall
only have to pay the fees and expenses of one firm of counsel
for all Indemnified Parties in each jurisdiction. In either of
such cases the Indemnifying Party shall not have the right to
assume the defense of such action on behalf of such
Indemnified Party. No Indemnifying Party shall be liable for
any settlement entered into without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying
Party shall, without the written consent of the Indemnified
Party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification
or contribution may be sought hereunder (whether or not the
Indemnified Party is an actual or potential party to such
action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the
Indemnified Party from all liability arising out of such
action or claim and (B) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or
on behalf of any Indemnified Party. The rights accorded to any
Indemnified Party hereunder shall be in addition to any rights
that such Indemnified Party may have at common law, by
separate agreement or otherwise.
<PAGE> 15
14
8.4 Contribution. If the indemnification provided for in Section
8.1 from the Indemnifying Party is unavailable to an
Indemnified Party in respect of any losses, claims, damages,
expenses or other liabilities referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages,
expenses or other liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, expenses or
other liabilities, as well as any other relevant equitable
considerations. The relative faults of such Indemnifying Party
and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, was
made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the Indemnifying
Party's and Indemnified Party's relative intent, knowledge,
access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result
of the losses, claims, damages, expenses or other liabilities
referred to above shall be deemed to include, subject to the
limitations set forth in Sections 8.1, 8.2 and 8.3, any legal
or other fees, charges or expenses reasonably incurred by such
party in connection with any investigation or proceeding. The
parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 8.4 were determined
by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in this Section 8.4. No Person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution pursuant
to this Section 8.4.
9. Rule 144; Other Exemptions. The Company covenants that it shall file any
reports required to be filed by it under the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and that it shall take such further
action as each Holder may reasonably request (including, but not limited to,
providing any information necessary to comply with Rules 144 and 144A (if
available with respect to resales of the Registrable Securities) under the Act),
all to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Act within the limitation
of the exemptions provided by (i) Rule 144 or Rule 144A (if available with
respect to resales of the Registrable Securities) under the Act, as such rules
may be amended from time to time, or (ii) any other rules or regulations now
existing or hereafter adopted by the SEC.
10. Miscellaneous.
10.1 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at
its election in writing delivered to the Company, be treated
as the Holder of such Registrable Securities for purposes of
any request, consent, waiver or other action by any Holder or
Holders of Registrable Securities pursuant to this Agreement
or any determination of any number or percentage of shares of
Registrable Securities held by any holder or holders of
Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it
of such owner's beneficial ownership of such Registrable
Securities, including a certificate from the record holder
that it is not the beneficial owner.
10.2 No Inconsistent Agreements; Other Registration Rights. The
Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the
Holders in this Agreement.
<PAGE> 16
15
10.3 Remedies. The Holders, in addition to being entitled to
exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their
rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be
adequate.
10.4 Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departures from
the provisions of such section may not be given unless the
Company has obtained the prior written consent of the Holders
holding at least a majority of the Registrable Securities held
by all of the Holders.
10.5 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered
personally or mailed by registered or certified mail, return
receipt requested, to the following address (or at such other
address as shall be specified by like notice, provided, that
notice of a change of address shall be effective only upon
receipt thereof):
(a) If to the Company:
Paxar Corporation
105 Corporate Park Drive
White Plains, N. Y. 10604
Attention: Arthur Hershaft, Chairman and CEO
(b) If to a Holder:
As set forth on the books and records of the Company.
All notices delivered personally shall be deemed to have been
received by the recipient thereof if received during normal
business hours on a business day; otherwise, such notices
shall be deemed received on the next following business day.
All notices mailed shall be deemed to be received on the fifth
business day following deposit of such notice into the mail.
Notwithstanding anything to the contrary in this Agreement,
all notices hereunder to any partner or affiliate of Odyssey
to whom Odyssey distributes any Warrants or Registrable
Securities (or to any direct or indirect transferee of such
partner or affiliate), may be made directly to Odyssey, which
shall be solely and exclusively responsible for providing
notice to its partners and affiliates (and such transferees).
10.6 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of
the parties hereto, including any successor to the Company by
merger, sale of substantially all of the Company's assets or
otherwise; provided, however, that the registration rights of
the Holders and the other obligations of the Company contained
in this Agreement shall, with respect to any Registrable
Security, be automatically transferred from a Holder to any
subsequent holder of such Registrable Security.
Notwithstanding any transfer of such rights, all of the
obligations of the Company hereunder shall survive any such
transfer and shall continue to inure to the benefit of all
transferees.
<PAGE> 17
16
10.7 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall
constitute one and the same agreement.
10.8 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the
meaning hereof.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, without regard to the principles of conflicts of law of
such State.
10.10 Jurisdiction. Each party to this Agreement hereby irrevocably
agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in the courts of the State
of New York or of the United States of America for the
Southern District of New York and hereby expressly submits to
the personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper
venue and any claim that such courts are an inconvenient
forum. Each party hereby irrevocably consents to the service
of process of any of the aforementioned courts in any such
suit, action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the address
set forth in Section 10.5.
10.11 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, it being
intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
10.12 Rules of Construction. References to sections or subsections
refer to sections or subsections of this Agreement.
10.13 Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings in respect of the subject matter
contained herein, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such
subject matter.
10.14 Further Assurances. Each of the parties shall execute such
documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the
provisions of this Agreement.
10.15 No Third Party Beneficiaries. Nothing herein is intended or
shall be construed to confer upon or give to any Person other
than the parties hereto and their permitted successors or
assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered
<PAGE> 18
17
by their respective officers hereunto duly authorized on the date first above
written.
PAXAR CORPORATION ODYSSEY PARTNERS, L.P.
By: /s/ Jack Plaxe By: /s/Stephen Berger
----------------------- -------------------------
Jack Plaxe Stephen Berger
Chief Financial Officer A General Partner
<PAGE> 1
"A" WARRANTS
- --------------------------------------------------------------------------------
WARRANT AGREEMENT
BETWEEN
PAXAR CORPORATION
AND
ODYSSEY PARTNERS, L.P.
Dated as of March 3, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of March 3, 1997, between Paxar
Corporation, a New York corporation (the "Company"), and Odyssey Partners, L.P.,
a Delaware limited partnership ("Odyssey"),.
W I T N E S S E T H :
WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of December 20, 1996, between the Company and
Odyssey, the Company is today purchasing from Odyssey all of the issued and
outstanding shares of Common Stock, par value $.01 per share, of Monarch
Holdings, Inc., a Delaware corporation, held by Odyssey (the "Purchased
Shares"); and
WHEREAS, the Stock Purchase Agreement contemplates that, in
partial consideration for the sale of the Purchased Shares, the Company will
issue to Odyssey warrants (the "Warrants") representing the right of the holder
thereof to purchase from the Company shares of common stock, par value $.10 per
share, of the Company ("Common Stock"), as provided herein; and
WHEREAS, pursuant to a Registration Rights Agreement, between
the Company and Odyssey, dated as of the date hereof (the "Registration Rights
Agreement"), the Company has agreed to grant to the holders of the Warrants (and
the holders of Common Stock and other securities issuable upon exercise of the
Warrants) registration rights with respect to the Registrable Securities
referred to therein, at the times and in the manner set forth in the
Registration Rights Agreement; and
WHEREAS, the Company proposes to issue certificates evidencing
the Warrants (such warrant certificates issued pursuant to this Agreement being
hereinafter collectively called the "Warrant Certificates"); and
WHEREAS, the Company and Odyssey desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions under which they may be issued,
transferred, exchanged, replaced and surrendered in connection with the exercise
of the Warrants.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DISTRIBUTION OF WARRANT CERTIFICATES
1.1 Due Issuance; Form of Warrant Certificates. The Company
hereby represents that the Warrants are validly authorized and duly issued,
fully paid and nonassesable, free of preemptive rights and free from all liens,
charges and security interests, other than liens, charges and security interests
imposed by the holder thereof. The Warrant Certificates for the Warrants shall
be issued in registered form only and, together with the purchase and assignment
forms to be printed on the reverse thereof, shall be substantially in the form
of Exhibit A and, in addition, may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
stamped, printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement or
as, in any particular case, may be required, in the opinion of counsel for the
Company, to comply with any law or with any rule or regulation of any regulatory
authority or agency or to conform to customary usage.
1.2 Execution of Warrant Certificates. The Warrant
Certificates shall be executed and dated on behalf of the Company by its
Chairman or Vice Chairman of the Board, Chief Executive Officer or President or
any Vice President, and by its Chief Financial Officer or Treasurer or any
Assistant Treasurer, or Secretary or any Assistant Secretary, either manually or
by facsimile signature printed thereon. In case any authorized officer of the
Company who shall have signed any of the Warrant Certificates shall cease to be
such
<PAGE> 3
2
officer of the Company either before or after delivery thereof by the Company to
the holder, the signature of such person on such Warrant Certificates shall,
nevertheless, be valid, with the same force and effect as though the person who
signed such Warrant Certificates has not ceased to be such officer of the
Company.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
2.1 Exercise Price. Each Warrant Certificate for the Warrants
shall, when signed by the Chairman, Vice Chairman, Chief Executive Officer or
President or any Vice President, and by the Chief Financial Officer or Treasurer
or any Assistant Treasurer, or Secretary or any Assistant Secretary, of the
Company, entitle the registered holder thereof to purchase from the Company one
share of Common Stock for each Warrant evidenced thereby, at a purchase price of
$17.50 per share (as the same may be adjusted from time to time pursuant to the
provisions of Article III hereof, the "Exercise Price"), or such adjusted number
of shares at such adjusted purchase price as may be established from time to
time pursuant to the provisions of Article III hereof.
2.2 Exercisability of Warrants. Each Warrant may be exercised
at any time on or after the date hereof, but not after 5:00 P.M., New York City
time, on the fifth anniversary of the date hereof (the "Exercise Deadline"). The
minimum number of shares of Common Stock with respect to which the Warrants may
be exercised as to any holder shall be the lesser of (i) 25,000 and (ii) the
number of shares of Common Stock issuable upon exercise of all Warrants held by
such holder.
2.3 Procedure for Exercise of Warrants. During the period
specified in and subject to the provisions of Section 2.2 hereof, the Warrants
may be exercised, in whole or in part, by surrendering the Warrant Certificates
representing such Warrants to the Company at its principal office, which is
presently at 105 Corporate Park Drive, White Plains, N.Y., 10604, with the
election to purchase form set forth on the Warrant Certificate duly completed
and executed, accompanied by payment in full of the Exercise Price as provided
in Section 2.1 in effect at the time of such exercise, for each share of Common
Stock with respect to which such Warrants are being exercised. Such Exercise
Price shall be paid in full by either (i) wire transfer of immediately available
funds, (ii) certified check payable in United States currency to the order of
the Company or (iii) by surrender to the Company of the number of Warrants set
forth below:
X = Y(A-B)
------
A
Where: X = the number of shares of Common Stock to be issued to the
Holder upon exercise pursuant to the foregoing clause (iii).
Y = the number of shares of Common Stock represented by the
Warrants so surrendered.
A = the Current Market Price (as defined below of one share of
Common Stock on the Date of Exercise (as defined below).
B = the Exercise Price for the Warrants so surrendered.
The date on which Warrants are exercised in accordance with this Section 2.3 is
sometimes referred to herein as the Date of Exercise of such Warrants.
<PAGE> 4
3
2.4 Issuance of Shares of Common Stock. As soon as practicable
after the Date of Exercise of any Warrants, the Company shall issue, or cause
the transfer agent for the Common Stock, if any, to issue a certificate or
certificates for the number of full shares of Common Stock to which such holder
is entitled, registered in accordance with the instructions set forth in the
election to purchase. All such shares of Common Stock shall be validly
authorized and issued, fully paid and nonassessable and free from all transfer
taxes, liens, charges and preemptive rights created by or on behalf of the
Company in respect of the issue thereof. Each person in whose name any such
certificate for Common Stock is issued shall for all purposes be deemed to have
become the holder of record of the Common Stock represented thereby on the Date
of Exercise of the Warrants resulting in the issuance of such shares,
irrespective of the date of issuance or delivery of such certificate for the
shares of Common Stock.
2.5 Certificates for Unexercised Warrants. In the event that
fewer than all of the Warrants represented by a Warrant Certificate are
exercised, the Company shall execute and deliver by recognized overnight
courier, within 10 days of the Date of Exercise, to the registered holder of
such Warrant Certificate, or such other person as shall be designated in the
election to purchase (subject to compliance with applicable securities laws), a
new Warrant Certificate representing the number of full Warrants not exercised.
In no event shall the Warrant be exercised with respect to less than an integral
number of shares of Common Stock, and the Company shall distribute no Warrant
Certificates representing Warrants exercisable for fractional shares of Common
Stock under this or any other section of this Agreement. Fractions of shares
shall be treated as provided in Section 3.10.
2.6 Reservation of Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants a number
of its authorized but unissued shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Warrants. All of the shares of
Common Stock to be issued upon the exercise of Warrants will be duly authorized,
validly issued, fully paid and non-assessable and will not be subject to any
preemptive or similar rights.
ARTICLE III
ADJUSTMENTS AND NOTICE PROVISIONS
3.1 Adjustment of Exercise Price. Subject to the provisions of
this Article III, the Exercise Price in effect from time to time shall be
subject to adjustment, as follows:
(a) In case the Company shall at any time after the
date hereof (i) declare a dividend or make a distribution on the outstanding
Common Stock payable in shares of its capital stock, (ii) subdivide the
outstanding Common Stock into a greater number of shares, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon exercise
of the Warrants outstanding, at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holders of the Warrants after such
time shall be entitled to receive the aggregate number and kind of shares which,
if such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall distribute to all
holders of Common Stock (including any such distribution made to the
shareholders of the Company in connection with a consolidation or merger in
which the Company is the continuing corporation, but excluding any such
distribution made to the shareholders of the Company in connection with a
consolidation or merger in which the Company is not the continuing corporation)
evidences of its indebtedness, cash or assets (other than (i) distributions and
dividends
<PAGE> 5
4
referred to in Section 3.1(a) in shares of Common Stock or (ii) any
non-extraordinary cash dividends paid out of retained earnings from current
operations), or rights, options or warrants to subscribe for or purchase capital
stock, or securities convertible into or exchangeable for shares of capital
stock, then, in each case, the Exercise Price shall be reduced (and the number
of shares issuable adjusted in accordance with Section 3.5) to the price
determined by multiplying the Exercise Price in effect immediately prior to the
record date (the "Distribution Record Date") for the determination of
shareholders of the Company entitled to receive such distribution by a fraction,
(x) the numerator of which shall be the Current Market Price (as determined
pursuant to Section 3.2 hereof) per share of Common Stock immediately prior to
the Distribution Record Date, less the reduction, if any, in the fair value of a
share of Common Stock (as reasonably determined by the Board of Directors of the
Company, taking into account, where applicable, the market price of the Common
Stock following the Distribution Record Date) as a result of such distribution
and (y) the denominator of which shall be the Current Market Price per share of
Common Stock immediately prior to the Distribution Record Date. Such adjustment
shall become effective at the close of business on the Distribution Record Date.
3.2 Current Market Price. For the purpose of any computation
under this Article III, the Current Market Price per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices as
reported by the principal national securities exchange or recognized quotation
system on which the Common Stock is then traded for the 30 consecutive trading
days (or, for purposes of Section 2.3, five consecutive trading days)
immediately preceding the date in question. If on any such date the Common Stock
is not listed or admitted to trading on any national securities exchange or
recognized quotation system, the fair value of a share of Common Stock on such
date as reasonably determined by the Board of Directors of the Company.
3.3 No Adjustments to Exercise Price. No adjustment in the
Exercise Price shall be required if such adjustment is less than $0.01;
provided, however, that any adjustments which by reason of this Article III are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment, and in any event shall be made on the day prior to the
Date of Exercise. All calculations under this Article III shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
3.4 Deferral of Adjustments to Exercise Price. In any case in
which this Article III shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
3.5 Adjustment to Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in Section 3.1(b) hereof,
the Warrants shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares (calculated to the nearest hundredth)
obtained by multiplying the number of shares of Common Stock purchasable upon
exercise of the Warrants immediately prior to such adjustment by a fraction, the
numerator of which shall be the Exercise Price in effect immediately prior to
such adjustment and the denominator of which shall be the Exercise Price in
effect immediately after such adjustment.
3.6 Certain Reorganizations. The Company shall give each
registered holder of Warrants 30 days' prior written notice of any Stock Merger
or Cash-Out Transaction (as defined below), in which case the following
provisions will apply.
(a) In the event of any capital reorganization or the
consolidation or merger of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the surviving or
continuing corporation) in which the consideration payable to the shareholders
of the Company
<PAGE> 6
5
in such transaction shall consist solely of capital stock of the surviving or
continuing corporation or of an affiliate (a "Stock Merger"), each Warrant
shall, without any action on the part of the holder thereof, be deemed to
represent the right to acquire (in lieu of the number of shares of Common Stock
deliverable upon exercise of such Warrant) the number of shares of stock of the
surviving or continuing corporation (or an affiliate) to which a holder of the
number of shares of Common Stock which would otherwise have been deliverable
upon the exercise of such Warrant would have been entitled upon such Stock
Merger, if such Warrant had been exercised in full immediately prior to the
record date for determining shareholders entitled to participate in such Stock
Merger (the "Newco Shares"). The Exercise Price for the Warrants shall in such
event be adjusted effective as of the date of the Stock Merger, such that the
Exercise Price for each Newco Share shall be an amount equal to (i) the product
of (A) the Exercise Price immediately prior to the Stock Merger multiplied by
(B) the aggregate number of shares of Common Stock issuable upon exercise of all
outstanding Warrants immediately prior to the Stock Merger divided by (ii) the
maximum number of Newco Shares deliverable upon exercise in full of all
outstanding Warrants. The Company shall not effect any Stock Merger, unless upon
or prior to the consummation thereof the surviving or continuing corporation
shall assume by legally binding written instrument (which need not be signed by
the Warrant holders) the obligation to deliver to the registered holder of any
Warrant such shares of stock as such holder shall be entitled to purchase in
accordance with the foregoing provisions. Upon request by any registered holder
of a Warrant, the surviving or continuing corporation shall issue to a holder of
a Warrant Certificate a certificate representing the right to acquire the Newco
Shares in accordance with the terms hereof.
(b) In the event of (i) the consolidation or merger of
the Company with or into another corporation (other than a Stock Merger or a
merger or consolidation in which the Company is the surviving or continuing
corporation) or (ii) any sale, lease or conveyance to another corporation of the
property and assets of any nature of the Company as an entirety or substantially
as an entirety (the transactions referred to in clauses (i) and (ii) being
referred herein as a "Cash-Out Transaction"), then upon the effective date of
the Cash-Out Transaction , each Warrant shall, unless it has been previously
exercised, expire and instead shall represent the right of each Warrant holder
to receive (and the Company shall pay to such Warrant holder) the sum of (A) (i)
the product of the number of shares of Common Stock issuable upon exercise of
such Warrant on the day preceding the consummation of the Cash-Out Transaction,
multiplied by (ii) the excess of (x) the closing price for a share of Common
Stock, as reported by the principal national securities exchange or quotation
system on which the Common Stock is then traded over (y) the Exercise Price
therefor, on the day preceding the consummation of the Cash-Out Transaction and
(B) in the event that the effective date of the consummation of the Cash-Out
Transaction is on or prior to the second anniversary of the date hereof, the
Make-Up Amount (as defined below), if any. For purposes of this Section 3.6, the
Make-Up Amount shall mean, with respect to each Warrant, the excess, if any, of
$7.30 over the amount payable with respect to such Warrant under clause (A)
above.
3.7 Reclassifications. In case of reclassification or change of
the shares of Common Stock issuable upon exercise of the Warrants (other than a
change in par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), or in case of any consolidation or merger of another corporation into
the Company in which the Company is the continuing corporation and in which
there is a reclassification or change (including a change to the right to
receive cash or other property) of the shares of Common Stock (other than a
change in par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the holders of the Warrants shall have the right thereafter to receive
upon exercise of the Warrants solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such reclassification, change, consolidation or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Article III. The above
provisions of this Section 3.7 shall similarly apply to successive
reclassifications and changes of shares of Common Stock.
<PAGE> 7
6
3.8 Notice of Adjustments. Whenever any adjustment is made
pursuant to this Article III, the Company shall cause written notice of such
adjustment to be sent to the registered holders of the Warrants within 15 days
thereafter, such notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any adjustments, and (iii)
the Exercise Price, the number of shares or the securities or other property
purchasable upon exercise of each Warrant after giving effect to such
adjustment.
3.9 Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Article III, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced but certificates thereafter
issued shall bear an appropriate legend or other notice of any adjustments.
3.10 Fractional Shares. The Company shall not be required upon
the exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Article III to the Exercise
Price or number of shares of Common Stock purchasable under each Warrant. If
more than one Warrant is exercised at one time by the same registered holder,
the number of full shares of Common Stock which shall be deliverable shall be
computed based on the number of shares deliverable in exchange for the aggregate
number of Warrants exercised. With respect to any final fraction of a share
called for upon the exercise of any Warrant or Warrants, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price of a share of Common Stock calculated in
accordance with Section 3.2.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF REGISTERED HOLDERS
OF WARRANT CERTIFICATES
4.1 Rights of Warrant Holders. No Warrant Certificate shall,
prior to exercise of the Warrant in accordance with the terms of this Agreement,
entitle the registered holder thereof to any of the rights of a shareholder of
the Company, including, without limitation, the right to vote, to receive
dividends and other distributions, or to receive any notice of, or to attend,
meetings of shareholders or any other proceedings of the Company.
4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant Certificate, or in lieu of or in
substitution for a lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Warrant Certificate, and of the ownership
thereof, and indemnity, if requested. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone.
ARTICLE V
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
5.1 Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of this Article V, may be split up, combined or exchanged for
other Warrant Certificates representing a like aggregate number of Warrants or
may be transferred in whole or in part. Any holder desiring to split up,
combine or exchange a Warrant Certificate or
<PAGE> 8
7
Warrant Certificates shall make such request in writing delivered to the Company
at its Principal Office and shall surrender the Warrant Certificate or Warrant
Certificates so to be split up, combined or exchanged at said office. Subject to
any applicable laws, rules or regulations restricting transferability, transfer
of outstanding Warrant Certificates shall be reflected from time to time upon
the books of the Company to be maintained for that purpose, upon a surrender of
the Warrant Certificate to the Company at its Principal Office, with the
assignment form set forth in the Warrant Certificate duly executed. Upon any
such surrender for split up, combination, exchange or transfer, the Company
shall execute and deliver to the person entitled thereto a Warrant Certificate
or Warrant Certificates, as the case may be, as so requested. The Company may
require the holder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split up, combination,
exchange or transfer of Warrant Certificates prior to the issuance of any new
Warrant Certificate.
5.2 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered upon the exercise of Warrants or for split up,
combination, exchange or transfer, or purchased or otherwise acquired by the
Company, shall be canceled and shall not be reissued by the Company; and, except
as provided (i) in Section 2.5, in case of the exercise of fewer than all of the
Warrants evidenced by a Warrant Certificate, or (ii) in Section 5.1, in case of
a split up, combination, exchange or transfer of the Warrants evidenced by a
Warrant Certificate, no Warrant Certificate shall be issued hereunder in lieu of
such cancelled Warrant Certificate.
5.3 Agreement of Warrant Certificate Holders. Every holder of a
Warrant Certificate, by accepting the same, consents and agrees with the Company
and with every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be
registered on the books of the Company maintained for that purpose by the
Company only if surrendered at the Principal Office of the Company, duly
endorsed or accompanied by a proper instrument of transfer; and
(b) it will not transfer (and the Company shall not be
required to register the transfer of) Warrants representing the right to acquire
fewer than 100,000 shares of Common Stock (or, if less, the total number of
Warrants held by such Warrant holder), except that (i) Odyssey, as the initial
holder of the Warrants, may distribute (but the Company shall not be required to
register the transfer resulting from such distribution) all or a portion of the
Warrants to some or all of its partners and to those employees of Odyssey having
an interest in the Warrants (and such partners and employees may transfer all,
but not less than all of such Warrants to a third party, and so on) and (ii) as
to any Warrants distributed pursuant to the foregoing clause (i), notice by the
Company to Odyssey shall be deemed for all purposes hereof to be notice to the
ultimate holder of such Warrant, and Odyssey shall satisfy such further notice
obligations, if any, that it may have to such holder;
(c) in the event that the number of shares of Common
Stock issuable upon exercise in full of all outstanding Warrants shall be fewer
than 25,000, then within 90 days of such date (unless during such 90-day period
such Warrants are exercised), the Company shall be entitled to redeem all, but
not less than all, of the outstanding Warrants by payment to each holder of a
Warrant of an amount in respect of such Warrant equal to the product of (A) the
number of shares of Common Stock issuable upon exercise of such Warrants,
multiplied by (B) an amount equal to the excess of (x) the Current Market Price
for a share of Common Stock on the day preceding the date on which the Company
shall give notice of redemption over (y) the Exercise Price for such share
(whereupon such Warrants shall be deemed for all purposes hereof to cease to be
outstanding); and
(d) prior to due presentment for registration of
transfer, the Company may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company) for all purposes
whatsoever.
<PAGE> 9
8
ARTICLE VI
MISCELLANEOUS
6.1 Books and Records. The Company shall maintain books and
records for registration and registration of transfer of the Warrant
Certificates issued hereunder. Such books and records shall show the names and
addresses of the respective holder of the Warrant Certificates, the number of
Warrants evidenced on its face by each Warrant Certificate and the date of each
Warrant Certificate.
6.2 Amendments and Waivers.
(a) No amendment, modification, termination or waiver
of any provision of this Agreement, the Warrant Certificates or the Registration
Rights Agreement, or consent to any departure by the Company therefrom, shall in
any event be effective without the written concurrence of the registered holders
of two-thirds of the then-outstanding Warrants (the "Requisite Holders"). After
an amendment, modification, termination or waiver under this Section 6.2 becomes
effective, the Company shall mail to the registered holders affected thereby a
notice briefly describing such amendment, modification, termination or waiver.
(b) The Company will not effect any proposed
amendment, modification, termination or waiver of any of the provisions of this
Agreement or the Warrant Certificates unless each Holder (irrespective of the
number of Warrants or Warrant Shares then owned by it) shall be informed thereof
by the Company prior to the effectuation thereof and shall be afforded the
opportunity of considering the same and shall be supplied by the Company with
sufficient information to enable it to make an informed decision with respect
thereto.
(c) Until an amendment, modification, termination or
waiver becomes effective, a consent to it by a holder is a continuing consent by
the holder and every subsequent holder of a Warrant or Warrant Shares, even if
notation of the consent is not made on any Warrant Certificate or stock
certificate. However, any such holder or subsequent holder may revoke any such
consent by notice to the Company received before the date on which the Requisite
Holders have consented (and not heretofore revoked such consent) to such
amendment, modification, termination or waiver.
(d) The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the registered holders entitled
to consent to any amendment, modification, termination or waiver, which record
date shall be at least 30 days prior to the first solicitation of such consent.
If a record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those persons who were registered holders at
such record date (or their duly designated proxies), and only those persons,
shall be entitled to revoke any consent previously given, whether or not such
persons continue to be registered holders after such record date. No such
consent shall be valid or effective for more than 90 days after such record
date.
6.3 Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS WARRANT AGREEMENT AND THE WARRANT CERTIFICATES.
6.4 Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
6.5 Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
6.6 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally (by hand
delivery or overnight courier) to the following address (or
<PAGE> 10
9
at such other address as shall be specified by like notice, provided that notice
of a change of address shall be effective only upon receipt thereof):
(a) If to the Company:
Paxar Corporation
105 Corporate Park Drive
White Plains, N. Y. 10604
Attention: Arthur Hershaft, Chairman and CEO
(b) If to the Holder:
As set forth on the books and records of the Company.
All notices shall be deemed to have been received by the
recipient thereof if received during normal business hours on a business day;
otherwise, such notices shall be deemed received on the next following business
day.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
PAXAR CORPORATION ODYSSEY PARTNERS, L.P.
By: /s/Jack Plaxe By: /s/Stephen Berger
----------------------- -------------------
Jack Plaxe Stephen Berger
Chief Financial Officer A General Partner
<PAGE> 1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT"), AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF THE ACT.
"A" WARRANT
No. 1
Certificate for 1,000,000 Warrants
PAXAR CORPORATION
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that: ODYSSEY PARTNERS, L.P.
or registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which represents the right to
purchase one fully paid and nonassessable share of Common Stock, par value $.10
per share (the "Common Stock"), of Paxar Corporation, a New York corporation
(the "Company"), at the initial exercise price of $17.50, at any time before the
Expiration Date (as defined herein), in accordance with and subject to a Warrant
Agreement, dated March 3, 1997, between the Company and Odyssey Partners, L.P.
(the "Warrant Agreement").
No Warrant may be exercised after 5:00 P.M., New York City
time, on the expiration date (the "Expiration Date") set forth in the Warrant
Agreement. All warrants evidenced hereby shall thereafter become void.
Prior to the Expiration Date, subject to any applicable laws,
rules or regulations restricting transferability (subject to the limitations on
transfer contained in the Warrant Agreement), the Registered Holder shall be
entitled to transfer this Warrant Certificate, in whole or in part, upon
surrender of this Warrant Certificate at the office of the Company maintained
for that purpose with the form of assignment set forth hereon duly executed.
Upon any such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants shall be issued in accordance
with instructions in the form of assignment.
Upon certain events provided for in the Warrant Agreement, the
Exercise Price, the number of shares of Common Stock issuable or the other
consideration payable upon the exercise of each Warrant is required to be
adjusted.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement and is subject to the terms and provisions contained
in said Warrant Agreement, to all of which terms and provisions the Registered
Holder consents by acceptance hereof.
Prior to exercise thereof, this Warrant Certificate shall not
entitle the Registered Holder to any of the rights of a shareholder of the
Company, including, without limitation, the right to vote, to receive cash
dividends and other distributions, or to attend or receive any notice of
meetings of shareholders or any other proceedings of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly
A-1
<PAGE> 2
executed under its facsimile Corporate Seal.
Date: March 3, 1997
By: /s/Jack Plaxe
Name: Jack Plaxe
------------------------
Title: Chief Financial Officer
Seal Attest: /s/ Eric Honick
A-2
<PAGE> 3
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise
__________ of the Warrants represented by this Warrant Certificate and to
purchase the shares of Common Stock or other securities issuable upon the
exercise of said Warrants, and requests that certificates for such shares be
issued and delivered as follows:
ISSUE TO:
________________________________________________________________________________
(Name)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER TO:
________________________________________________________________________________
(Name)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all
the Warrants represented by this Warrant Certificate, the undersigned request
that a new Warrant certificate representing the number of full Warrants not
exercised be issued and delivered as set forth above.
Dated: _______________
(Insert Social Security or other identifying number(s) of holder(s)
________________________________________________________________________________
(Signature of registered holder)
________________________________________________________________________________
(signature of registered holder, if co-owned)
NOTE: Signature must conform in all respects to name of holder as specified
on the face of the Warrant certificate.
A-2
<PAGE> 4
[FORM OF
ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
warrants set forth below:
Name of Assignee Address No. of Warrants
- ------------------------------------------------------------------
- ------------------------------------------------------------------
and does hereby irrevocably constitute and appoint _______________ to make such
transfer on the books of Paxar Corporation maintained for that purpose, with
full power of substitution in the premises.
Dated: ____________, 19__
- --------------------------------------------------------------------------------
(Insert Social Security or other identifying number(s) of holder(s)
- --------------------------------------------------------------------------------
(Signature of Assignee)
- --------------------------------------------------------------------------------
(Signature of Assignee if co-owned)
NOTE: Signature must conform in all respects to name of holder as specified
on the face of the Warrant Certificate.
Signature(s) Guaranteed:
A-3
<PAGE> 1
"B" WARRANTS
- --------------------------------------------------------------------------------
WARRANT AGREEMENT
BETWEEN
PAXAR CORPORATION
AND
ODYSSEY PARTNERS, L.P.
Dated as of March 3, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of March 3, 1997, between Paxar
Corporation, a New York corporation (the "Company"), and Odyssey Partners, L.P.,
a Delaware limited partnership ("Odyssey"),.
W I T N E S S E T H :
WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of December 20, 1996, between the Company and
Odyssey, the Company is today purchasing from Odyssey all of the issued and
outstanding shares of Common Stock, par value $.01 per share, of Monarch
Holdings, Inc., a Delaware corporation, held by Odyssey (the "Purchased
Shares"); and
WHEREAS, the Stock Purchase Agreement contemplates that, in
partial consideration for the sale of the Purchased Shares, the Company will
issue to Odyssey warrants (the "Warrants") representing the right of the holder
thereof to purchase from the Company shares of common stock, par value $.10 per
share, of the Company ("Common Stock"), as provided herein; and
WHEREAS, pursuant to a Registration Rights Agreement, between
the Company and Odyssey, dated as of the date hereof (the "Registration Rights
Agreement"), the Company has agreed to grant to the holders of the Warrants (and
the holders of Common Stock and other securities issuable upon exercise of the
Warrants) registration rights with respect to the Registrable Securities
referred to therein, at the times and in the manner set forth in the
Registration Rights Agreement; and
WHEREAS, the Company proposes to issue certificates evidencing
the Warrants (such warrant certificates issued pursuant to this Agreement being
hereinafter collectively called the "Warrant Certificates"); and
WHEREAS, the Company and Odyssey desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions under which they may be issued,
transferred, exchanged, replaced and surrendered in connection with the exercise
of the Warrants.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DISTRIBUTION OF WARRANT CERTIFICATES
1.1 Due Issuance; Form of Warrant Certificates. The Company
hereby represents that the Warrants are validly authorized and duly issued,
fully paid and nonassesable, free of preemptive rights and free from all liens,
charges and security interests, other than liens, charges and security interests
imposed by the holder thereof. The Warrant Certificates for the Warrants shall
be issued in registered form only and, together with the purchase and assignment
forms to be printed on the reverse thereof, shall be substantially in the form
of Exhibit A and, in addition, may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
stamped, printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement or
as, in any particular case, may be required, in the opinion of counsel for the
Company, to comply with any law or with any rule or regulation of any regulatory
authority or agency or to conform to customary usage.
1.2 Execution of Warrant Certificates. The Warrant
Certificates shall be executed and dated on behalf of the Company by its
Chairman or Vice Chairman of the Board, Chief Executive Officer or President or
any Vice President, and by its Chief Financial Officer or Treasurer or any
Assistant Treasurer, or Secretary or any Assistant Secretary, either manually or
by facsimile signature printed thereon. In case any authorized officer of the
Company who shall have signed any of the Warrant Certificates shall cease to be
such
<PAGE> 3
2
officer of the Company either before or after delivery thereof by the Company to
the holder, the signature of such person on such Warrant Certificates shall,
nevertheless, be valid, with the same force and effect as though the person who
signed such Warrant Certificates has not ceased to be such officer of the
Company.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
2.1 Exercise Price. Each Warrant Certificate for the Warrants
shall, when signed by the Chairman, Vice Chairman, Chief Executive Officer or
President or any Vice President, and by the Chief Financial Officer or Treasurer
or any Assistant Treasurer, or Secretary or any Assistant Secretary, of the
Company, entitle the registered holder thereof to purchase from the Company one
share of Common Stock for each Warrant evidenced thereby, at a purchase price of
$21.875 per share (as the same may be adjusted from time to time pursuant to the
provisions of Article III hereof, the "Exercise Price"), or such adjusted number
of shares at such adjusted purchase price as may be established from time to
time pursuant to the provisions of Article III hereof.
2.2 Exercisability of Warrants. Each Warrant may be exercised
at any time on or after the date hereof, but not after 5:00 P.M., New York City
time, on the fifth anniversary of the date hereof (the "Exercise Deadline"). The
minimum number of shares of Common Stock with respect to which the Warrants may
be exercised as to any holder shall be the lesser of (i) 25,000 and (ii) the
number of shares of Common Stock issuable upon exercise of all Warrants held by
such holder.
2.3 Procedure for Exercise of Warrants. During the period
specified in and subject to the provisions of Section 2.2 hereof, the Warrants
may be exercised, in whole or in part, by surrendering the Warrant Certificates
representing such Warrants to the Company at its principal office, which is
presently at 105 Corporate Park Drive, White Plains, N.Y., 10604, with the
election to purchase form set forth on the Warrant Certificate duly completed
and executed, accompanied by payment in full of the Exercise Price as provided
in Section 2.1 in effect at the time of such exercise, for each share of Common
Stock with respect to which such Warrants are being exercised. Such Exercise
Price shall be paid in full by either (i) wire transfer of immediately available
funds, (ii) certified check payable in United States currency to the order of
the Company or (iii) by surrender to the Company of the number of Warrants set
forth below:
X = Y(A-B)
------
A
Where: X = the number of shares of Common Stock to be issued to the
Holder upon exercise pursuant to the foregoing clause (iii).
Y = the number of shares of Common Stock represented by the
Warrants so surrendered.
A = the Current Market Price (as defined below of one share of
Common Stock on the Date of Exercise (as defined below).
B = the Exercise Price for the Warrants so surrendered.
The date on which Warrants are exercised in accordance with this Section 2.3 is
sometimes referred to herein as the Date of Exercise of such Warrants.
<PAGE> 4
3
2.4 Issuance of Shares of Common Stock. As soon as practicable
after the Date of Exercise of any Warrants, the Company shall issue, or cause
the transfer agent for the Common Stock, if any, to issue a certificate or
certificates for the number of full shares of Common Stock to which such holder
is entitled, registered in accordance with the instructions set forth in the
election to purchase. All such shares of Common Stock shall be validly
authorized and issued, fully paid and nonassessable and free from all transfer
taxes, liens, charges and preemptive rights created by or on behalf of the
Company in respect of the issue thereof. Each person in whose name any such
certificate for Common Stock is issued shall for all purposes be deemed to have
become the holder of record of the Common Stock represented thereby on the Date
of Exercise of the Warrants resulting in the issuance of such shares,
irrespective of the date of issuance or delivery of such certificate for the
shares of Common Stock.
2.5 Certificates for Unexercised Warrants. In the event that
fewer than all of the Warrants represented by a Warrant Certificate are
exercised, the Company shall execute and deliver by recognized overnight
courier, within 10 days of the Date of Exercise, to the registered holder of
such Warrant Certificate, or such other person as shall be designated in the
election to purchase (subject to compliance with applicable securities laws), a
new Warrant Certificate representing the number of full Warrants not exercised.
In no event shall the Warrant be exercised with respect to less than an integral
number of shares of Common Stock, and the Company shall distribute no Warrant
Certificates representing Warrants exercisable for fractional shares of Common
Stock under this or any other section of this Agreement. Fractions of shares
shall be treated as provided in Section 3.10.
2.6 Reservation of Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants a number
of its authorized but unissued shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Warrants. All of the shares of
Common Stock to be issued upon the exercise of Warrants will be duly authorized,
validly issued, fully paid and non-assessable and will not be subject to any
preemptive or similar rights.
ARTICLE III
ADJUSTMENTS AND NOTICE PROVISIONS
3.1 Adjustment of Exercise Price. Subject to the provisions of
this Article III, the Exercise Price in effect from time to time shall be
subject to adjustment, as follows:
(a) In case the Company shall at any time after the
date hereof (i) declare a dividend or make a distribution on the outstanding
Common Stock payable in shares of its capital stock, (ii) subdivide the
outstanding Common Stock into a greater number of shares, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon exercise
of the Warrants outstanding, at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holders of the Warrants after such
time shall be entitled to receive the aggregate number and kind of shares which,
if such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall distribute to all
holders of Common Stock (including any such distribution made to the
shareholders of the Company in connection with a consolidation or merger in
which the Company is the continuing corporation, but excluding any such
distribution made to the shareholders of the Company in connection with a
consolidation or merger in which the Company is not the continuing corporation)
evidences of its indebtedness, cash or assets (other than (i) distributions and
dividends
<PAGE> 5
4
referred to in Section 3.1(a) in shares of Common Stock or (ii) any
non-extraordinary cash dividends paid out of retained earnings from current
operations), or rights, options or warrants to subscribe for or purchase capital
stock, or securities convertible into or exchangeable for shares of capital
stock, then, in each case, the Exercise Price shall be reduced (and the number
of shares issuable adjusted in accordance with Section 3.5) to the price
determined by multiplying the Exercise Price in effect immediately prior to the
record date (the "Distribution Record Date") for the determination of
shareholders of the Company entitled to receive such distribution by a fraction,
(x) the numerator of which shall be the Current Market Price (as determined
pursuant to Section 3.2 hereof) per share of Common Stock immediately prior to
the Distribution Record Date, less the reduction, if any, in the fair value of a
share of Common Stock (as reasonably determined by the Board of Directors of the
Company, taking into account, where applicable, the market price of the Common
Stock following the Distribution Record Date) as a result of such distribution
and (y) the denominator of which shall be the Current Market Price per share of
Common Stock immediately prior to the Distribution Record Date. Such adjustment
shall become effective at the close of business on the Distribution Record Date.
3.2 Current Market Price. For the purpose of any computation
under this Article III, the Current Market Price per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices as
reported by the principal national securities exchange or recognized quotation
system on which the Common Stock is then traded for the 30 consecutive trading
days (or, for purposes of Section 2.3, five consecutive trading days)
immediately preceding the date in question. If on any such date the Common Stock
is not listed or admitted to trading on any national securities exchange or
recognized quotation system, the fair value of a share of Common Stock on such
date as reasonably determined by the Board of Directors of the Company.
3.3 No Adjustments to Exercise Price. No adjustment in the
Exercise Price shall be required if such adjustment is less than $0.01;
provided, however, that any adjustments which by reason of this Article III are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment, and in any event shall be made on the day prior to the
Date of Exercise. All calculations under this Article III shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
3.4 Deferral of Adjustments to Exercise Price. In any case in
which this Article III shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
3.5 Adjustment to Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in Section 3.1(b) hereof,
the Warrants shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares (calculated to the nearest hundredth)
obtained by multiplying the number of shares of Common Stock purchasable upon
exercise of the Warrants immediately prior to such adjustment by a fraction, the
numerator of which shall be the Exercise Price in effect immediately prior to
such adjustment and the denominator of which shall be the Exercise Price in
effect immediately after such adjustment.
3.6 Certain Reorganizations. The Company shall give each
registered holder of Warrants 30 days' prior written notice of any Stock Merger
or Cash-Out Transaction (as defined below), in which case the following
provisions will apply.
(a) In the event of any capital reorganization or the
consolidation or merger of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the surviving or
continuing corporation) in which the consideration payable to the shareholders
of the Company
<PAGE> 6
5
in such transaction shall consist solely of capital stock of the surviving or
continuing corporation or of an affiliate (a "Stock Merger"), each Warrant
shall, without any action on the part of the holder thereof, be deemed to
represent the right to acquire (in lieu of the number of shares of Common Stock
deliverable upon exercise of such Warrant) the number of shares of stock of the
surviving or continuing corporation (or an affiliate) to which a holder of the
number of shares of Common Stock which would otherwise have been deliverable
upon the exercise of such Warrant would have been entitled upon such Stock
Merger, if such Warrant had been exercised in full immediately prior to the
record date for determining shareholders entitled to participate in such Stock
Merger (the "Newco Shares"). The Exercise Price for the Warrants shall in such
event be adjusted effective as of the date of the Stock Merger, such that the
Exercise Price for each Newco Share shall be an amount equal to (i) the product
of (A) the Exercise Price immediately prior to the Stock Merger multiplied by
(B) the aggregate number of shares of Common Stock issuable upon exercise of all
outstanding Warrants immediately prior to the Stock Merger divided by (ii) the
maximum number of Newco Shares deliverable upon exercise in full of all
outstanding Warrants. The Company shall not effect any Stock Merger, unless upon
or prior to the consummation thereof the surviving or continuing corporation
shall assume by legally binding written instrument (which need not be signed by
the Warrant holders) the obligation to deliver to the registered holder of any
Warrant such shares of stock as such holder shall be entitled to purchase in
accordance with the foregoing provisions. Upon request by any registered holder
of a Warrant, the surviving or continuing corporation shall issue to a holder of
a Warrant Certificate a certificate representing the right to acquire the Newco
Shares in accordance with the terms hereof.
(b) In the event of (i) the consolidation or merger of
the Company with or into another corporation (other than a Stock Merger or a
merger or consolidation in which the Company is the surviving or continuing
corporation) or (ii) any sale, lease or conveyance to another corporation of the
property and assets of any nature of the Company as an entirety or substantially
as an entirety (the transactions referred to in clauses (i) and (ii) being
referred herein as a "Cash-Out Transaction"), then upon the effective date of
the Cash-Out Transaction , each Warrant shall, unless it has been previously
exercised, expire and instead shall represent the right of each Warrant holder
to receive (and the Company shall pay to such Warrant holder) the sum of (A) (i)
the product of the number of shares of Common Stock issuable upon exercise of
such Warrant on the day preceding the consummation of the Cash-Out Transaction,
multiplied by (ii) the excess of (x) the closing price for a share of Common
Stock, as reported by the principal national securities exchange or quotation
system on which the Common Stock is then traded over (y) the Exercise Price
therefor, on the day preceding the consummation of the Cash-Out Transaction and
(B) in the event that the effective date of the consummation of the Cash-Out
Transaction is on or prior to the second anniversary of the date hereof, the
Make-Up Amount (as defined below), if any. For purposes of this Section 3.6, the
Make-Up Amount shall mean, with respect to each Warrant, the excess, if any, of
$5.90 over the amount payable with respect to such Warrant under clause (A)
above.
3.7 Reclassifications. In case of reclassification or change of
the shares of Common Stock issuable upon exercise of the Warrants (other than a
change in par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), or in case of any consolidation or merger of another corporation into
the Company in which the Company is the continuing corporation and in which
there is a reclassification or change (including a change to the right to
receive cash or other property) of the shares of Common Stock (other than a
change in par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the holders of the Warrants shall have the right thereafter to receive
upon exercise of the Warrants solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such reclassification, change, consolidation or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Article III. The above
provisions of this Section 3.7 shall similarly apply to successive
reclassifications and changes of shares of Common Stock.
<PAGE> 7
6
3.8 Notice of Adjustments. Whenever any adjustment is made
pursuant to this Article III, the Company shall cause written notice of such
adjustment to be sent to the registered holders of the Warrants within 15 days
thereafter, such notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any adjustments, and (iii)
the Exercise Price, the number of shares or the securities or other property
purchasable upon exercise of each Warrant after giving effect to such
adjustment.
3.9 Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Article III, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced but certificates thereafter
issued shall bear an appropriate legend or other notice of any adjustments.
3.10 Fractional Shares. The Company shall not be required upon
the exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Article III to the Exercise
Price or number of shares of Common Stock purchasable under each Warrant. If
more than one Warrant is exercised at one time by the same registered holder,
the number of full shares of Common Stock which shall be deliverable shall be
computed based on the number of shares deliverable in exchange for the aggregate
number of Warrants exercised. With respect to any final fraction of a share
called for upon the exercise of any Warrant or Warrants, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price of a share of Common Stock calculated in
accordance with Section 3.2.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF REGISTERED HOLDERS
OF WARRANT CERTIFICATES
4.1 Rights of Warrant Holders. No Warrant Certificate shall,
prior to exercise of the Warrant in accordance with the terms of this Agreement,
entitle the registered holder thereof to any of the rights of a shareholder of
the Company, including, without limitation, the right to vote, to receive
dividends and other distributions, or to receive any notice of, or to attend,
meetings of shareholders or any other proceedings of the Company.
4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant Certificate, or in lieu of or in
substitution for a lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Warrant Certificate, and of the ownership
thereof, and indemnity, if requested. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone.
ARTICLE V
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
5.1 Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of this Article V, may be split up, combined or exchanged for
other Warrant Certificates representing a like aggregate number of Warrants or
may be transferred in whole or in part. Any holder desiring to split up,
combine or exchange a Warrant Certificate or Warrant Certificates shall make
such request in writing delivered to the Company at its Principal Office and
<PAGE> 8
7
shall surrender the Warrant Certificate or Warrant Certificates so to be split
up, combined or exchanged at said office. Subject to any applicable laws, rules
or regulations restricting transferability, transfer of outstanding Warrant
Certificates shall be reflected from time to time upon the books of the Company
to be maintained for that purpose, upon a surrender of the Warrant Certificate
to the Company at its Principal Office, with the assignment form set forth in
the Warrant Certificate duly executed. Upon any such surrender for split up,
combination, exchange or transfer, the Company shall execute and deliver to the
person entitled thereto a Warrant Certificate or Warrant Certificates, as the
case may be, as so requested. The Company may require the holder to pay a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any split up, combination, exchange or transfer of Warrant
Certificates prior to the issuance of any new Warrant Certificate.
5.2 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered upon the exercise of Warrants or for split up,
combination, exchange or transfer, or purchased or otherwise acquired by the
Company, shall be canceled and shall not be reissued by the Company; and, except
as provided (i) in Section 2.5, in case of the exercise of fewer than all of the
Warrants evidenced by a Warrant Certificate, or (ii) in Section 5.1, in case of
a split up, combination, exchange or transfer of the Warrants evidenced by a
Warrant Certificate, no Warrant Certificate shall be issued hereunder in lieu of
such cancelled Warrant Certificate.
5.3 Agreement of Warrant Certificate Holders. Every holder of a
Warrant Certificate, by accepting the same, consents and agrees with the Company
and with every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be
registered on the books of the Company maintained for that purpose by the
Company only if surrendered at the Principal Office of the Company, duly
endorsed or accompanied by a proper instrument of transfer; and
(b) it will not transfer (and the Company shall not be
required to register the transfer of) Warrants representing the right to acquire
fewer than 100,000 shares of Common Stock (or, if less, the total number of
Warrants held by such Warrant holder), except that (i) Odyssey, as the initial
holder of the Warrants, may distribute (but the Company shall not be required to
register the transfer resulting from such distribution) all or a portion of the
Warrants to some or all of its partners and to those employees of Odyssey having
an interest in the Warrants (and such partners and employees may transfer all,
but not less than all of such Warrants to a third party, and so on) and (ii) as
to any Warrants distributed pursuant to the foregoing clause (i), notice by the
Company to Odyssey shall be deemed for all purposes hereof to be notice to the
ultimate holder of such Warrant, and Odyssey shall satisfy such further notice
obligations, if any, that it may have to such holder;
(c) in the event that the number of shares of Common
Stock issuable upon exercise in full of all outstanding Warrants shall be fewer
than 25,000, then within 90 days of such date (unless during such 90-day period
such Warrants are exercised), the Company shall be entitled to redeem all, but
not less than all, of the outstanding Warrants by payment to each holder of a
Warrant of an amount in respect of such Warrant equal to the product of (A) the
number of shares of Common Stock issuable upon exercise of such Warrants,
multiplied by (B) an amount equal to the excess of (x) the Current Market Price
for a share of Common Stock on the day preceding the date on which the Company
shall give notice of redemption over (y) the Exercise Price for such share
(whereupon such Warrants shall be deemed for all purposes hereof to cease to be
outstanding); and
(d) prior to due presentment for registration of
transfer, the Company may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company) for all purposes
whatsoever.
<PAGE> 9
8
ARTICLE VI
MISCELLANEOUS
6.1 Books and Records. The Company shall maintain books and
records for registration and registration of transfer of the Warrant
Certificates issued hereunder. Such books and records shall show the names and
addresses of the respective holder of the Warrant Certificates, the number of
Warrants evidenced on its face by each Warrant Certificate and the date of each
Warrant Certificate.
6.2 Amendments and Waivers.
(a) No amendment, modification, termination or waiver
of any provision of this Agreement, the Warrant Certificates or the Registration
Rights Agreement, or consent to any departure by the Company therefrom, shall in
any event be effective without the written concurrence of the registered holders
of two-thirds of the then-outstanding Warrants (the "Requisite Holders"). After
an amendment, modification, termination or waiver under this Section 6.2 becomes
effective, the Company shall mail to the registered holders affected thereby a
notice briefly describing such amendment, modification, termination or waiver.
(b) The Company will not effect any proposed
amendment, modification, termination or waiver of any of the provisions of this
Agreement or the Warrant Certificates unless each Holder (irrespective of the
number of Warrants or Warrant Shares then owned by it) shall be informed thereof
by the Company prior to the effectuation thereof and shall be afforded the
opportunity of considering the same and shall be supplied by the Company with
sufficient information to enable it to make an informed decision with respect
thereto.
(c) Until an amendment, modification, termination or
waiver becomes effective, a consent to it by a holder is a continuing consent by
the holder and every subsequent holder of a Warrant or Warrant Shares, even if
notation of the consent is not made on any Warrant Certificate or stock
certificate. However, any such holder or subsequent holder may revoke any such
consent by notice to the Company received before the date on which the Requisite
Holders have consented (and not heretofore revoked such consent) to such
amendment, modification, termination or waiver.
(d) The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the registered holders entitled
to consent to any amendment, modification, termination or waiver, which record
date shall be at least 30 days prior to the first solicitation of such consent.
If a record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those persons who were registered holders at
such record date (or their duly designated proxies), and only those persons,
shall be entitled to revoke any consent previously given, whether or not such
persons continue to be registered holders after such record date. No such
consent shall be valid or effective for more than 90 days after such record
date.
6.3 Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS WARRANT AGREEMENT AND THE WARRANT CERTIFICATES.
6.4 Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
6.5 Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
6.6 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally (by hand
delivery or overnight courier) to the following address (or
<PAGE> 10
9
at such other address as shall be specified by like notice, provided that notice
of a change of address shall be effective only upon receipt thereof):
(a) If to the Company:
Paxar Corporation
105 Corporate Park Drive
White Plains, N. Y. 10604
Attention: Arthur Hershaft, Chairman and CEO
(b) If to the Holder:
As set forth on the books and records of the Company.
All notices shall be deemed to have been received by the
recipient thereof if received during normal business hours on a business day;
otherwise, such notices shall be deemed received on the next following business
day.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
PAXAR CORPORATION ODYSSEY PARTNERS, L.P.
By: /s/ Jacke Plaxe By: /s/ Stephen Berger
----------------------- -----------------------
Jacke Plaxe Stephen Berger
Chief Financial Officer A General Partner
<PAGE> 1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT"), AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF THE ACT.
"B" WARRANT
No. 1
Certificate for 200,000 Warrants
PAXAR CORPORATION
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that: ODYSSEY PARTNERS, L.P.
or registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which represents the right to
purchase one fully paid and nonassessable share of Common Stock, par value $.10
per share (the "Common Stock"), of Paxar Corporation, a New York corporation
(the "Company"), at the initial exercise price of $21.875, at any time before
the Expiration Date (as defined herein), in accordance with and subject to a
Warrant Agreement, dated March 3, 1997, between the Company and Odyssey
Partners, L.P. (the "Warrant Agreement").
No Warrant may be exercised after 5:00 P.M., New York City
time, on the expiration date (the "Expiration Date") set forth in the Warrant
Agreement. All warrants evidenced hereby shall thereafter become void.
Prior to the Expiration Date, subject to any applicable laws,
rules or regulations restricting transferability (subject to the limitations on
transfer contained in the Warrant Agreement), the Registered Holder shall be
entitled to transfer this Warrant Certificate, in whole or in part, upon
surrender of this Warrant Certificate at the office of the Company maintained
for that purpose with the form of assignment set forth hereon duly executed.
Upon any such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants shall be issued in accordance
with instructions in the form of assignment.
Upon certain events provided for in the Warrant Agreement, the
Exercise Price, the number of shares of Common Stock issuable or the other
consideration payable upon the exercise of each Warrant is required to be
adjusted.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement and is subject to the terms and provisions contained
in said Warrant Agreement, to all of which terms and provisions the Registered
Holder consents by acceptance hereof.
Prior to exercise thereof, this Warrant Certificate shall not
entitle the Registered Holder to any of the rights of a shareholder of the
Company, including, without limitation, the right to vote, to receive cash
dividends and other distributions, or to attend or receive any notice of
meetings of shareholders or any other proceedings of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly
A-1
<PAGE> 2
executed under its facsimile Corporate Seal.
Date: March 3, 1997
By: /s/Jack Plaxe
------------------------------
Name: Jack Plaxe
Title: Chief Financial Officer
Seal Attest: /s/ Eric Honick
A-2
<PAGE> 3
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise
__________ of the Warrants represented by this Warrant Certificate and to
purchase the shares of Common Stock or other securities issuable upon the
exercise of said Warrants, and requests that certificates for such shares be
issued and delivered as follows:
ISSUE TO:
________________________________________________________________________________
(Name)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER TO:
________________________________________________________________________________
(Name)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all
the Warrants represented by this Warrant Certificate, the undersigned request
that a new Warrant certificate representing the number of full Warrants not
exercised be issued and delivered as set forth above.
Dated: _______________
(Insert Social Security or other identifying number(s) of holder(s)
________________________________________________________________________________
(Signature of registered holder)
________________________________________________________________________________
(signature of registered holder, if co-owned)
NOTE: Signature must conform in all respects to name of holder as specified
on the face of the Warrant certificate.
[FORM OF
ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
warrants set forth below:
A-2
<PAGE> 4
Name of Assignee Address No. of Warrants
________________________________________________________________________________
________________________________________________________________________________
and does hereby irrevocably constitute and appoint _______________ to make such
transfer on the books of Paxar Corporation maintained for that purpose, with
full power of substitution in the premises.
Dated: ____________, 19__
________________________________
(Insert Social Security or other identifying number(s) of holder(s)
________________________________________________________________________________
(Signature of Assignee)
________________________________________________________________________________
(Signature of Assignee if co-owned)
NOTE: Signature must conform in all respects to name of Signature(s)
Guaranteed: holder as specified on the face of the Warrant Certificate.
Signature(s) Guaranteed:_____________________________
A-3
