Warrant Agreement




 




 


  
  
MILLER
INDUSTRIES, INC.


 






 



      WARRANT AGREEMENT

 



 


July 23, 2001

 

 

 

 



 


TABLE OF CONTENTS


 

	
    	
    	
    Page 
    
	
    	
    	
    
	
ARTICLE I 

    	
        CERTAIN
DEFINITIONS 

    	
1

    
	
    	
    	
    
	
ARTICLE II 

    	
        RIGHT
          TO PURCHASE WARRANT SHARES

    	
 5

    
	
    	
    	
    
	
        2.1

    	
         Form of
        Warrant Certificates 

    	
        5

    
	
    	
    	
    
	
        2.2 

    	
        Legend 

    	
        5

    
	
    	
    	
    
	
        2.3 

    	
        Warrant Tranches

    	
         6

    
	
    	
    	
    
	
        2.4

    	
         Delivery of
        the Warrant Certificates 

    	
        6

    
	
    	
    	
    
	
        ARTICLE III 

    	
                EXERCISE OF WARRANTS 

    	
        7

    
	
    	
    	
    
	
        3.1

    	
         Exercise Price 

    	
        7

    
	
    	
    	
    
	
        3.2 

    	
        Restrictions
        on Exercise; Expiration 

    	
        7

    
	
    	
    	
        
    

	
        3.3 

    	
        Method of
        Exercise; Payment of Exercise Price 

    	
        7

    
	
    	
    	
        
    

	
        3.4


    	
         Dividends and
        Distributions 


    	
        8


    
	
    	
    	
        
    

	

          ARTICLE IV 

    	

                  
          ADJUSTMENTS 

    	

           8

    
	
    	
    	
    
	
               4.1

    	
                Upon Stock
        Dividends, Subdivisions or Splits 
  
      

    	
                9
  
      

    
	
    	
    	
    
	
        4.2

    	
         Upon
        Combinations 
  
      

    	
         9
  
      

    
	
    	
    	
    
	
        4.3 

    	
         Upon
        Reclassifications, Reorganizations, Consolidations or Mergers 
  
      

    	
         9
  
      

    
	
    	
    	
    
	
        4.4

    	
         Deferral in
        Certain Circumstances
  
      

    	
         9
  
      

    
	
    	
    	
    
	
          ARTICLE V 

    	
                  
          RESERVATION AND AUTHORIZATION OF COMMON SHARES, ETC.
  
      

    	
           10
  
      

    
	
    	
    	
        
    

	
        5.1 

    	
         Reservation
        and Authorization
  
      

    	
         10
  
      

    
	
    	
    	
    
	
        5.2 

    	
         Covenant
        Regarding Common Stock 
  
      

    	
         10
  
      

    
	
    	
    	
    
	
          ARTICLE VI

    	
                  WARRANT TRANSFER BOOKS: RESTRICTIONS ON TRANSFER
  
      

    	
           10
  
      

    
	
    	
    	
    
	
        6.1 

    	
         Transfer and
        Exchange 
  
      

    	
         10
  
      

    
	
    	
    	
    
	
        6.2

    	
         Special
        Transfer Provisions 
  
      

    	
         11
  
      

    
	
    	
    	
    
	
        6.3

    	
         Surrender of a
        Warrant Certificate 
  
      

    	
         11
  
      

    
	
    	
    	
    
	
          ARTICLE VII 

    	
                  
          NOTICE TO HOLDERS 
  
      

    	
           11
  
      

    
	
    	
    	
    
	
        7.1

    	
         Notices of
        Corporate Actions 
  
      

    	
         11
  
      

    
	
    	
    	
    
	
        7.2 

    	
         Taking of
        Record
  
      

    	
         12
  
      

    
	
    	
    	
    
	
        7.3

    	
         Closing of
        Transfer Books
  
      

    	
         12
  
      

    
	
    	
    	
    
	
          ARTICLE VIII 

    	
                  
          REGISTRATION
  
      

    	
           13
  
      

    
	
    	
    	
    
	
        8.1

    	
         Corporation
        Covenants 
  
      

    	
         13
  
      

    
	
    	
    	
    
	
        8.2

    	
         Holder
        Covenants 
  
      

    	
         17
  
      

    
	
    	
    	
    
	
        8.3

    	
         Indemnification 
  
      

    	
         18
  
      

    
	
    	
    	
    
	
          ARTICLE IX

    	
                  	MISCELLANEOUS 
  
      

    	
           20
  
      

    
	
    	
    	
    
	
        9.1

    	
         Loss or
        Mutilation 
  
      

    	
         20
  
      

    
	
    	
    	
    
	
        9.2 

    	
         Payment of
        Taxes 
  
      

    	
         20
  
      

    
	
    	
    	
    
	
        9.3 

    	
         Notices 
  
      

    	
         21
  
      

    
	
    	
    	
    
	
        9.4 

    	
         Governing Law 
  
      

    	
        
        21
  
      

    
	
    	
    	
    
	
        9.5 

    	
         Assignment;
        Successors
  
      

    	
         21
  
      

    
	
    	
    	
    
	
        9.6

    	
         Counterparts
  
      

    	
         21
  
      

    
	
    	
    	
    
	
        9.7 

    	
         Amendments 
  
      

    	
         21
  
      

    
	
    	
    	
    
	
        9.8

    	
         Headings
  
      

    	
         22
  
      

    
	
    	
    	
    
	
        9.9 

    	
         Third Party
        Beneficiaries 
  
      

    	
         22
  
      

    
	
    	
    	
    
	
        9.10 

    	
         Severability 
  
      

    	
        
        22
  
      

    
	
    	
    	
        
    

	
        9.11 

    	
         No
        Inconsistent Agreements 
  
      

    	
         22
  
      

    
	
    	
    	
        
    

	
        9.12

    	
         Limitation on
        Holders’ Rights
  
      

    	
         22

    


 

i



 

  	
EXHIBIT A
  
      

    	
 Warrant
Certificate
  
      

    	
 A-1
  
      

    
	
    	
    	
    
	
ATTACHMENT-1
  
      

    	
 Notice of Intention to Exercise Warrant for Cash
        
  
      

    	
 B-1
  
      

    


 

 

 

 

ii



 

WARRANT
AGREEMENT

 

WARRANT
AGREEMENT, dated as of July 23, 2001 (this “Agreement”), among MILLER
INDUSTRIES, INC., a Tennessee corporation (the “Corporation”), and
each person attaching a signature page hereto and each other institution which
may hereafter execute and deliver an instrument of assignment pursuant to Schedule
11.1 that certain Amended and Restated Credit Agreement, dated July 23,
2001, by and among the Corporation, the Lenders party thereto and Bank of
America, N.A., as Agent for the Lenders (as amended, restated, supplemented, or
modified, the  “Credit Agreement”) (each an “Investor” and,
collectively the “Investors”).


 Pursuant to the terms of the Credit Agreement, the Corporation has agreed to
enter into this Agreement to issue to the Investors warrants (the “Warrants”) exercisable for shares of common stock, $0.01 par value
per share, of the Corporation (the “Common Stock”).

The
Corporation has authorized the issuance to the Investors and to their designated
Affiliates (which are, where applicable, referred to as Investors herein) of the
Warrants under the terms and conditions hereof, which number of shares is
subject to increase or decrease as provided herein.


 In consideration of the foregoing and of the representations, warranties and
agreements contained in the Credit Agreement, and for the purpose of defining
the terms and provisions of the Warrants and the Warrant Shares (as defined
herein) and the respective rights and obligations thereunder of the Corporation
and the Holders (as defined herein), the Corporation and the Investors hereby
agree as follows:


  ARTICLE I
  


  CERTAIN DEFINITIONS
  


  
  For all purposes of this Agreement, except as otherwise expressly provided:

  
  (a)     the terms defined in this Article 1 have the meanings assigned to  them in
  this Article, and include the plural as well as the singular;

  
  (b)     the words “herein,” “hereof” and “hereunder,” and
   other words of similar import, refer to this
  Agreement as a whole and not to any particular article, section or other
  subdivision; and

  
  (c)     any capitalized term otherwise not defined herein,  shall have the meaning
  ascribed to it under the Credit Agreement.

  
  “Affiliate” means, with respect to any person,
  any other person that directly or indirectly, through one or more
  intermediaries, controls, is controlled by or is under common control with the
  first mentioned person. A person shall be deemed
  to control another person if such first person possesses
  directly or indirectly the power to direct,
  or cause the direction of, the management and
  policies of the second person,
  whether through the  ownership of voting securities, by contract or otherwise.

  
  “Board” or “Board of Directors”means the
  board of directors of  the Corporation.

  
  “Business Day” means any day which is not a Saturday, Sunday
  
  or a day on which banking institutions in the State of New York are authorized
  or obligated by law, executive order, regulation or governmental decree to
  close.

  
  “Capital Stock” shall mean the Common Stock and preferred 
  stock of the Corporation.

   “Change
  of Control” means: (i) the consummation of a merger or consolidation
  of the Corporation with or 

   



   

   into another entity or any other corporate
  reorganization, or transfer of shares, in either case whereby any person or
  group acquires beneficial ownership of more than 50% of the combined voting
  power of all classes of the continuing or surviving entity’s capital stock
  outstanding immediately after such merger, consolidation or other
  reorganization, or transfer of shares, or (ii) the sale, transfer or other
  disposition of all or substantially all of the Corporation’s assets. A
  transaction shall not constitute a Change of Control if its sole purpose is to
  change the jurisdiction of the Corporation’s incorporation or organization
  or to create a holding Corporation, subsidiary or other affiliate that will be
  owned by the Corporation or by the persons who held the Corporation’s
  securities immediately before such transaction in substantially the same
  proportions  as before.

   “Closing”
  means either the Tranche I Closing or the Tranche II Closing, whichever is
  applicable for a particular Warrant.

  
  
   “Commission” means the Securities and Exchange Commission.

   “Common Stock” means the common stock, $0.01 par value per
  share, of  the Corporation.

   “Corporation” has the meaning set forth in the preamble hereto.

   “Credit
  Agreement” has the meaning set forth in  the preamble hereto.

   “Exchange Act” means  the Securities Exchange Act of 1934, as
  amended, and the rules and regulations of the Commission promulgated
  thereunder.

   “Exercise
  Price” shall mean either the  Tranche I Exercise Price or the Tranche
  II Exercise, whichever is applicable for a particular Warrant.

  “Expiration Date” means either  the
  Tranche I Expiration Date or the Tranche II Expiration Date, whichever is
  applicable for a particular Warrant.

   “Holders” means the holders from time to  time of the Warrants
  or the Warrant Shares issued upon exercise of the Warrants.

   “Independent
  Valuation Firm” means an independent, experienced appraisal firm
  which is a member of a recognized professional association of business
  appraisers acceptable to a
  majority of the Board of Directors of the Corporation and the
  applicable Holder and which has not been called upon to audit the financial
  statements of the Corporation or such Holder.

  “Market
  Price” shall mean on any date specified herein, with respect to
  Common Stock or to common stock (or equivalent equity interests) issued
  pursuant to a  Change of Control, the amount per share equal to (i) the
  average sale price of the last sale price of shares of Common Stock, regular
  way, or of shares of such common stock (or equivalent equity interests) for
  the immediately preceding twenty (20) Business Days (or such other period as
  may be specified in this Warrant) or, if no such sale takes place on any such
  date, the average of the closing bid and asked prices thereof on such date, in
  each case as officially reported on the principal national securities exchange
  on which the same are then listed or admitted to trading, or (ii) if no
  shares of Common Stock or no shares of such common stock (or equivalent equity
  interests), as the case may be, are then listed or admitted to trading on any
  national securities exchange, the average sale price of the last sale price of
  shares of Common Stock, regular way, or of shares of such common stock (or
  equivalent equity interests) for the immediately preceding twenty (20)
  Business Days (or such other period as may be specified in this Warrant), or,
  if no such sale takes place on any such date, the average of the
  reported closing bid and asked prices thereof on such date, in each case as
  quoted in the Nasdaq National Market or, if no shares of Common Stock or no
  shares of such common stock (or equivalent equity interest), as the case may
  be, are then quoted in the Nasdaq National Market or Nasdaq Smallcap Market,
  as published by the National Quotation Bureau, Incorporated or any similar
  successor organization, and in either case as reported by any member firm of
  the New York Stock Exchange selected by the Corporation, or (iii) if no shares
  of Common Stock or no shares of such common stock (or equivalent equity
  interests), as the case may be, are then 

   

  2



   

   listed or admitted to trading on any
  national securities exchange or quoted or published in the over-the-counter
  market, the higher of (x) the book value thereof as determined by any
  firm of independent public accountants of recognized standing selected by the
  Board of Directors of the Corporation, as of the last day of any month ending
  within sixty (60) days preceding the date as of which the determination is to
  be made or the price per Warrant Share determined
  in good faith by the Board of Directors as
  of the relevant Closing and notified
  to the Investors in accordance with Section 7.1 (the  “Initially
  Determined Price”); provided, however,
  if any Investor who is entitled to receive any Warrants
  with respect to the related Closing objects to the Board of Directors’
  determination of such Market
  Price pursuant to clause (iii) above within five Business Days’ of receipt
  of such notice by a written notice of objection delivered to the Corporation
  (an  “Objection Notice,” and each Investor who has delivered an
  Objection Notice an  “Objecting Investor”), the Market Price shall be
  such price per Warrant Share as of the relevant Closing as may be redetermined
  by the Board of Directors in consultation with and subject to the agreement of
  each Objecting Investor, each of whom shall be required to negotiate in good
  faith and use commercially reasonable efforts to reach agreement prior to the
  Referral Date (as defined herein) (and such price shall be final upon the
  agreement of each of the Objecting Investors); provided, further that if the
  Board of Directors and each Objecting Investor are
  not able to agree on the Market Price within ten (10)
  Business Days after the Corporation’s receipt of all timely Objection
  Notices (the  “Referral Date”), the Market
  Price shall be the price per Warrant Share as of the
  relevant Closing determined by an Independent
  Valuation Firm, not discounting value due to the fact that such securities
  constitute a minority interest, and lack liquidity but assuming that the sale
  would be between a willing buyer and a willing seller, neither of which is
  under any compulsion to sell or buy. The Board of Directors shall
  submit its valuations and
  any other relevant data, and any Investor may submit its own valuation and any other data,
  to the Independent Valuation Firm and the Corporation shall
  instruct, and shall use commercially reasonable efforts to cause
  the Independent Valuation Firm to make its own determination of the Market
  Price by not later than fifteen (15) Business Days after
  the Referral Date. If the Independent Valuation Firm fails to determine a
  price per share on or before the twentieth (20th) Business Day
  following the Referral Date, the Initially Determined Price shall be deemed
  final and binding.  If the
  Independent Valuation Firm determines a price per share on or before the
  twentieth (20th) Business Day following the Referral Date, whether
  such price is higher or lower than the Initially Determined Price, the
  determination of the final Market Price by such Independent Valuation Firm
  shall be final and binding upon the parties. The Corporation agrees
  to pay 50%, and the Objecting Investors jointly agree to pay 50%,
  of the fees and expenses of the Independent Valuation Firm.

  
  “Securities Act” means the  Securities Act of 1933, as
  amended, and the rules and regulations of the Commission promulgated
  thereunder.

  
  “Tranche I Closing” has the meaning set  forth in Section
  2.3(a) hereof.

   “Tranche
  II Closing” has the meaning set  forth in Section 2.3(b)
  hereof.

   “Tranche
  I Exercise Price” is equal to the Market Price as of the Tranche I
  Closing.

   “Tranche
  II Exercise Price” is equal  to the Market Price as of the Tranche II
  Closing.

 “Tranche I
  Expiration Date” for each Warrant issued pursuant to Section
  2.3(a) hereunder, is equal to the date that is seven years from the date
  hereof.

 “Tranche II
  Expiration Date” for each  Warrant issued pursuant to Section
  2.3(b) hereunder, is equal to the date that is eight years from the date
  hereof.

  
  “Tranche I Shares” means  the Warrant
  Shares (as adjusted in accordance with Section 4 herein) to be issued
  in accordance with Section 2.3(a) hereof.

  
  “Tranche II Shares” means the Warrant  Shares (as adjusted in
  accordance with Section 4 herein) to be issued in accordance with Section
  2.3(b) hereof.

  
  “Transfer Legend” means a legend in
  the  form required by Section 2.2 hereof.

   

  3



   

  
  “Warrants” have the meaning set forth in the preamble hereto.

  
  “Warrant Certificates” has the meaning set forth in Section
  2.1 hereof.

  
  “Warrant Shares” means shares of  Common Stock issuable upon
  exercise of a Warrant Certificate.

ARTICLE II


    RIGHT TO PURCHASE WARRANT SHARES

2.1    Form
        of Warrant Certificates.  Any certificate representing the Warrants (a “Warrant Certificate”),
      the form of which is attached hereto as Exhibit A, shall be detachable
      from this Agreement and the Credit Agreement and shall be dated the date
      on which it is signed by a duly authorized officer of the Corporation and
      shall have such insertions as are appropriate or required or permitted by
      this Agreement and may have such letters, numbers or other marks of
      identification as the Corporation may deem appropriate and as are not
      inconsistent with the provisions of this Agreement or the Credit
      Agreement.

2.2     
 Legend.  
      Each Warrant Certificate shall bear on the face thereof a legend (the
      “Transfer Legend”) substantially in the following form:

      
    “This Warrant
    has not been registered under the Securities Act of 1933, as amended (the
    “Act”), and may not be transferred in the absence of such
    registration or an exemption therefrom under such Act.”

    

        

     Except as otherwise
    permitted by this Section  2.2, (a) each certificate for Common
    Stock (or other security) issued upon the exercise of any Warrant, and
    (b) each certificate issued upon the direct or indirect transfer of any
    such Common Stock (or other security) shall be stamped or otherwise
    imprinted with a legend in substantially the following form:


  
 “The shares
    represented by this certificate  have not been registered under the
    Securities Act of 1933, as amended (the “Act”), and may not be
    transferred in the absence of such registration or an exemption therefrom
    under such Act.”

  



  The holder of any
  Warrant or Warrant Share shall be entitled to receive from the Corporation,
  without expense, new securities of like tenor not bearing the applicable
  legend set forth above in this Section 2.2 when such securities shall
  have been (a) effectively registered under the Securities Act and
  disposed of in accordance with the registration statement covering such
  securities, (b) sold to the public pursuant to Rule 144 or any
  comparable rule under the Securities Act, or (c) when, in the opinion of
  independent counsel for the holder thereof experienced in Securities Act
  matters, such restrictions are no longer required in order to insure
  compliance with the Securities Act.


  2.3     Warrant Tranches.
  
The
  Warrants 
 shall be issuable to the Investors in accordance with the provisions
  of this Section 2.3.

  
  
  
  (a)      Tranche I.  
  On 

 the earliest practicable date following the One-Year Anniversary (as
  defined in the Credit Agreement) (the 

   “Tranche I Closing”), the
  Corporation shall issue to the Investors then a party to this Agreement
  Warrants exercisable for a number of Warrant Shares equal to (i) a fraction,
  the numerator of which shall be be the aggregate outstanding principal balance
  of the Term Loans as of the One-Year Anniversary and the denominator of which
  shall be the aggregate outstanding principal balance of the Term Loans as of
  the date hereof, multiplied by (ii) the product of 0.5% times
  the number of outstanding shares of Common Stock of the Corporation as of the
  One-Year Anniversary (the  “Tranche I




   

  4

  

   



  Shares”). Each Investor a party
  to this Agreement on the One-Year Anniversary shall receive that number of the
  Tranche I Shares that is equal to such Investor’s Applicable Commitment
  Percentage multiplied by the aggregate number of Tranche I Shares issuable by
  the Corporation pursuant to this clause (a).


  
  (b)     Tranche II.  On the earliest practicable date following the Two-Year Anniversary (as
  defined in the Credit Agreement) (the “Tranche II Closing”), the
  Corporation shall issue to the Investors then a party to this Agreement
  Warrants exercisable for a number of Warrant Shares equal to (i) a fraction,
  the numerator of which shall be be the aggregate outstanding principal balance
  of the Term Loans as of the Two-Year Anniversary and the denominator of which
  shall be the aggregate outstanding principal balance of the Term Loans as of
  the date hereof, multiplied by (ii) the product of 1.5% times
  the number of outstanding shares of Common Stock of the Corporation as of the
  Two-Year Anniversary (the “Tranche II Shares”). Each Investor a
  party to this Agreement on the Two-Year Anniversary shall receive that number
  of the Tranche II Shares that is equal to such Investor’s Applicable
  Commitment Percentage multiplied by the aggregate number of Tranche II Shares
  issuable by the Corporation pursuant to this clause (b).

  

  
  2.4      Delivery
    of the Warrant Certificates.  Within ten (10) days
    of any Closing, the Corporation shall issue to any Investor who is entitled
    to receive Warrants in accordance with Section 2.3 above, a Warrant
    Certificate for Warrants to purchase said number of Warrant Shares, which
    number of Warrant Shares is subject to increase and decrease as provided in
    Article 4 below.  In the event a Holder exercises its
    right to acquire Warrant Shares granted under any Warrant Certificate,
    certificates for the shares of Common Stock so purchased shall be issued in
    the name of, or as directed by, the Holder and delivered to Holder, or its
    transferee (as provided in Article 6 herein), within a reasonable time and,
    unless such Warrant Certificate has been fully exercised or has expired, a
    new Warrant Certificate representing the shares with respect to which such
    Warrant Certificate shall not have been exercised shall also be issued to
    Holder, or its transferee, within such time.


ARTICLE III

EXERCISE OF WARRANTS

  
  
3.1     Exercise
  Price.  The Warrant Certificates shall


 entitle the
  Holders thereof, subject to the provisions of this Agreement, to purchase, as
  applicable: (a) the Tranche I Warrant Shares at the Tranche I Exercise Price
  and (b) the Tranche II Warrant Shares at the Tranche II Exercise Price.

3.2     Restrictions
    on Exercise; Expiration.  Subject


  to the terms and
    conditions of this Agreement, on or before the applicable Expiration Date,
    the Warrants may be exercised on any Business Day as to all or any portion
    of the Warrant Shares. If any of the Warrants are not exercised by 5:00
    p.m., New York City time, on the applicable Expiration Date, this Agreement
    and unexercised Warrants and Warrant Certificates shall expire and all
    rights of the Holders hereunder and thereunder shall terminate unless
    otherwise provided herein or therein.

3.3     
Method of Exercise; Payment of Exercise Price.


  (a)     
  In order to exercise all or any of the Warrants, a Holder thereof shall
  provide written notice in substantially the form of Attachment-1 to Exhibit
  A to the Corporation at its address set forth in Section 9.3 hereof
  specifying the number of Warrants being exercised. Such notice shall be
  accompanied by one or more Warrant Certificates representing not less than the
  number of Warrants being exercised, together with payment in full of the
  applicable per share Exercise Price multiplied by the number of Warrant Shares
  to be purchased pursuant to the exercise. The Exercise Price shall be payable,
  at the option of such Holder by wire transfer, certified check, official bank
  check or bank cashier’s check payable to the order of the Corporation. 
  If the number of Warrants being exercised is less than the number of Warrants
  represented by the Warrant Certificate(s) tendered in connection with the
  exercise, the Corporation shall issue new Warrant Certificate(s) for the
  unexercised Warrants in accordance with instructions contained in the notice
  of exercise and this Agreement.

  (b)     In lieu of
  exercising this Warrant pursuant to Section 3.2(a) above, Holder may
  elect to  




   

  5

  

   




    receive shares based on the value of this Warrant (or  the portion
  thereof being canceled) by surrender of this Warrant at the principal office
  of the Corporation together with notice of such election, in which event the
  Corporation shall issue to Holder a number of shares of Common Stock computed
  using the following formula:




  X = Y
  (A-B)
             A


  
Where:

  X=         the number of shares
  of Common Stock to be issued to Holder;

  Y=
          the number of shares
  of Common Stock purchasable under this Warrant (at the date of such
  calculation);

  A=
          the Market Value of
  one share of the Corporation’s Common Stock (at the date of such
  calculation); and

  B=
           Exercise Price as of
  the date of issuance of the Warrant (adjusted to the date of such
  calculation).

  Upon
  exercise of any Warrant in conformity with the foregoing provisions, the
  Corporation shall (i) transfer promptly to, or upon the written order of,
  the Holder of such Warrant, appropriate evidence of ownership of any
  Warrant Shares or other securities or property (including money) to which it
  is entitled, registered or otherwise placed in such name or names as may be
  directed in writing by the Holder thereof, (ii) deliver such evidence of
  ownership and any other securities or property (including money) to the person
  or persons entitled to receive the same, and (iii) reissue, as the case may
  be, a Warrant Certificate for any unexercised Warrants. A Warrant shall be
  deemed to have been exercised immediately prior to the close of business on
  the date of the surrender for exercise of the Warrant Certificate representing
  such Warrant being exercised and the payment of or surrender of Warrants
  representing the Exercise Price thereof, and, for all purposes of this
  Agreement, the person entitled to receive any Warrant Shares or other
  securities or property deliverable upon such exercise shall, as between such
  person and the Corporation, be deemed to be the Holder of such Warrant Shares
  or other securities or property of record as of the close of business on such
  date and shall be entitled to receive any Warrant Shares or other securities
  or property (including money) to which such person would have been entitled
  had such person been the record holder of such Warrant Shares or other
  securities or property on such date.


3.4     Dividends
    and Distributions.   For so long as any of the
    Warrants remain outstanding and unexercised, the Corporation will, upon the
    declaration of a cash dividend upon its Common Stock or other distribution
    to the holders of its Common Stock (other than a dividend to holders of its
    Common Stock payable in shares of the Corporation’s Common Stock) and at
    least 10 days prior to the record date, notify the Holders of such
    declaration, which notice will contain, at a minimum, the following
    information: (i) the anticipated date of the declaration of the dividend or
    distribution, (ii) the amount of such dividend or distribution, (iii) the
    record date of such dividend or distribution, (iv) the payment date or
    distribution date of such dividend or distribution, and (v) the Corporation’s
    best estimate of the frequency and amount of cash dividends or other
    distributions to be paid or made in each of the succeeding three years.
  
  
ARTICLE IV
  
ADJUSTMENTS
  
The
  number of Warrant Shares for 
  

 which 
  
   any Warrant is exercisable and the
  applicable Exercise Price for such Warrant shall be subject to adjustment from
  time to time as set forth in this Section 4.

  


4.1     Upon
      Stock Dividends, Subdivisions or Splits.  If, at
      any time after the date hereof, the number of shares of Common Stock
      outstanding is increased by a stock dividend payable in shares of Common
      Stock or by a subdivision or split-up of shares of Common Stock then, the
      number of shares of Common Stock purchasable on exercise of a Warrant
      shall be increased in proportion to such increase in outstanding shares of
      Common Stock, and
  
 

  6



   

the applicable Exercise Price per
      share for such Warrant Shares shall
      be decreased in proportion to such increase in outstanding shares of
      Common Stock.




4.2     Upon
     Combinations.   If, at any time  after the date
      hereof, the number of shares of Common Stock outstanding is decreased by any
      combination of the outstanding shares of Common Stock into a smaller
      number of shares of Common Stock, then the number of shares of Common
      Stock purchasable on exercise of a Warrant shall be decreased in
      proportion to such decrease in outstanding shares of Common Stock, and the
      applicable Exercise Price per share
      for such Warrant Shares shall be increased in proportion to such decrease
      in outstanding shares of Common Stock.
 

4.3     Upon
      Reclassifications, Reorganizations, Consolidations or Mergers.  
      In the event of any capital reorganization of the Corporation, any
      reclassification of the Common Stock of the Corporation (other than a
      change in par value or from par value to no par value or from no par value
      to par value or as a result of a stock dividend or subdivision, split-up
      or combination of shares), or any Change of Control transaction, all
      Warrants issuable hereunder shall after such reorganization,
      reclassification, consolidation, or merger be exercisable for the kind and
      number of shares of stock or other securities or property of the
      Corporation or of the successor corporation resulting from such
      consolidation or surviving such merger, if any, to which the holder of the
      number of shares of Common Stock deliverable upon exercise of a Warrant
      issuable hereunder (immediately prior to the time of such reorganization,
      reclassification, consolidation or merger) would have been entitled upon
      such reorganization, reclassification, consolidation or merger. The
      provisions of this clause shall similarly apply to successive
      reorganizations, reclassifications, consolidations, or mergers.
      Furthermore, the Corporation will not merge into or consolidate with any
      other person, or sell or otherwise transfer its property, assets and
      business substantially as an entirety to a successor of the Corporation,
      unless prior to the consummation of such reorganization, reclassification,
      consolidation or merger, the successor corporation (if other than the
      Corporation) resulting from such reorganization, reclassification,
      consolidation, assumes, by written instrument, the obligation to deliver
      to the Holder of a Warrant issuable hereunder, such shares of stock,
      securities or assets, which, in accordance with the foregoing provisions,
      such Holders shall be entitled to receive upon exercise. 

4.4     Deferral
      in Certain Circumstances.   In any case in which the
      provisions of this Section 4 shall require that an adjustment shall become
      effective immediately after a record date of an event, the Corporation may
      defer until the occurrence of such event issuing to the Holder of any
      Warrant exercised after such record date and before the occurrence of such
      event the shares of Common Stock issuable upon such exercise by reason of
      the adjustment required by such event and issuing
      to such Holder only the shares of Common Stock issuable upon such exercise
      before giving effect to such adjustments; provided, however,
      that the Corporation shall deliver to such Holder an appropriate
      instrument or due bills evidencing such Holder’s right to receive such
      additional shares.

ARTICLE V

RESERVATION AND AUTHORIZATION OF COMMON SHARES, ETC.



        5.1     Reservation
        and Authorization.  The Corporation hereby represents and warrants that it has reserved, and
      shall at all times hereafter reserve and keep available, for issuance upon
      exercise of the Warrants such number of its duly authorized but unissued
      shares of Common Stock as will be sufficient to permit the exercise in
      full of all outstanding Warrants and will cause appropriate evidence of
      ownership of such Warrant Shares or other securities to be delivered to
      the Holders of the Warrants upon their request for delivery of such, and
      shall take such action as shall be necessary so that all such shares of
      Common Stock, shall to the extent such shares are eligible for listing on
      a securities exchange, at all times, be duly approved for listing, subject
      to official notice of issuance, on each securities exchange, if any, on
      which such shares of Common Stock or other securities are then listed.
      
5.2     Covenant
      Regarding Common Stock.  The Corporation
      covenants that, except as contemplated by the Agreements, all shares of
      Common Stock will, upon issuance, be (a) duly authorized, validly issued,
      fully paid and nonassessable, (b) free from preemptive and any other
      similar rights and (c) free from any taxes, liens, charges or security
      interest with respect thereto.

ARTICLE VI


    WARRANT TRANSFER BOOKS: RESTRICTIONS ON TRANSFER


6.1     Transfer
      and  

 Exchange.
  
 

  7



   


    (a)     The Corporation shall keep and maintain a register in which, subject to such
    reasonable regulations as it may prescribe, the Corporation shall provide
    for the registration of the Warrant Certificates on the Corporation’s
    records and transfers or exchanges of the Warrant Certificates as herein
    provided.

    (b)     
    Subject to the provisions of this Article 6, a Holder may transfer a
    Warrant Certificate and the Warrants represented thereby in whole or in part
    by written notice to the Corporation stating the name of the proposed
    transferee and otherwise complying with the terms of this Agreement. Any
    transferee shall agree in writing to be subject to the terms and conditions
    of this Agreement and the Agreements.

    (c)     
   Subject to Section 6.2(b) hereof, when a Warrant Certificate is
    presented to the Corporation with a request to register the transfer of such
    Warrant Certificate, the Corporation shall register the transfer or make the
    exchange as requested if its requirements for such transactions and any
    applicable requirements hereunder are satisfied. To permit registrations of
    transfers and exchanges, the Corporation shall execute and deliver such
    Warrant Certificate in accordance with the provisions hereof. No service
    charge shall be made for any registration of transfer or exchange of the
    Warrants.




6.2     Special
Transfer Provisions.


    (a)     By its acceptance of the Warrants represented by a Warrant Certificate
    bearing the Transfer Legend, each Holder of the Warrants acknowledges the
    restrictions on transfer of the Warrants and Warrant Shares and agrees that
    it will transfer the Warrants and Warrant Shares only in accordance with
    those restrictions.

    (b)     Upon the transfer, exchange or replacement of a Warrant Certificate or
    certificate representing Warrant Shares not bearing the Transfer Legend, the
    Corporation shall deliver a Warrant Certificate or stock certificate that
    does not bear the Transfer Legend. Upon the transfer, exchange or
    replacement of a Warrant Certificate or certificate representing Warrant
    Shares bearing the Transfer Legend, the Corporation shall deliver such
    Warrant Certificate or stock certificate bearing the Transfer Legend, unless
    such legend may be removed from a Warrant Certificate or stock certificate
    as provided in the next sentence. The Transfer Legend may be removed from a
    Warrant Certificate or stock certificate if there is delivered to the
    Corporation an opinion of legal counsel satisfactory to the Corporation to
    confirm that neither such legend nor the restrictions on transfer set forth
    therein are required to ensure that transfers of such security will not
    violate the registration and prospectus delivery requirements of the
    Securities Act or applicable law; provided, however, that the Corporation
    shall not be required to determine the sufficiency of any such evidence.




6.3     Surrender
      of a Warrant Certificate.   Any Warrant
      Certificate surrendered for registration of transfer, exchange or exercise
      of the Warrants represented thereby shall be promptly canceled by the
      Corporation and shall not be reissued by the Corporation and, except in
      case of mutilation or partial exercise of the Warrants represented by such
      Warrant Certificate, no Warrant Certificate shall be issued hereunder in
      lieu thereof.

ARTICLE VII

NOTICE TO HOLDERS


7.1     Notices
        of Corporate Actions.
    
In
    case:



    
    (a)
         the
    Corporation shall grant to the holders of its Capital
    Stock as a  class any rights or
    warrants to subscribe for or purchase any shares of Capital Stock of any
    class; or

    
    (b)     
    of any reclassification of the Capital Stock, or
    of any consolidation, merger or share  exchange to which the Corporation is a
    party and for which approval of any stockholders of the Corporation is
    required, or of the sale or transfer of all or substantially all of the
    assets of the Corporation, or of a Change of Control; or

    

   

  8



   

    
    (c)     
    of the voluntary or involuntary dissolution,
    liquidation or winding up of  the Corporation; or

    (d)      the
    Corporation or any subsidiary shall commence a tender offer for all or
 a
    portion of the outstanding shares of Capital Stock (or shall amend any such
    tender offer to change the maximum number of shares being sought or the
    amount or type of consideration being offered therefor); or


    (e)     
    the Corporation shall take an action or an event shall  occur that would
    require a Warrant Share and/or Exercise Price adjustment pursuant to Section
    4; or

    (f)     the Board of Directors shall determine the Market Price with
     respect to any
    Closing, any Referral Date shall occur or the Market Price shall be
    redetermined in accordance with the definition thereof;

    

    then
    the Corporation shall cause to be mailed to each Investor at its last
    address as such address appears in the stock register, (i) in the case of
    any action covered by clauses (a) through (d) above at least 20 days prior
    to the record date for determining holders of the Common Stock for purposes
    of such action, and (ii) in the case of any other such action, as soon as
    practicable, a notice stating (1) the date on which a record is to be
    taken for the purpose of such dividend, distribution or granting of rights
    or warrants, or, if a record is not to be taken, the date as of which the
    holders of the Common Stock of record who will be entitled to such dividend,
    distribution, rights or warrants are to be determined, (2) the date on
    which such reclassification, consolidation, merger, share exchange, sale,
    transfer, dissolution, liquidation or winding up is expected to become
    effective, and the date as of which it is expected that holders of the
    Common Stock of record shall be entitled to exchange their shares of the
    Common Stock for securities, cash or other property deliverable upon such
    reclassification, consolidation, merger, share exchange, sale, transfer,
    dissolution, liquidation or winding up, or (3) the date on which such
    tender offer commenced, the date on which such tender offer is scheduled to
    expire unless extended, the consideration offered and the other material
    terms thereof (or the material terms of the amendment thereto). Such notice
    shall also set forth such facts with respect thereto as shall be reasonably
    necessary to indicate the effect of such action on the applicable Exercise
    Price, the Warrant Shares issuable hereunder and the kind or class of shares
    or other securities or property which shall be deliverable or purchasable
    upon the occurrence of such action or deliverable upon exercise of the
    Warrants. Neither the failure to give any such notice nor any defect therein
    shall affect the legality or validity of any action described in clauses (a)
    through (f) of this Section 7.1.

7.2     Taking
      of Record.  In  the case of all dividends or
      other distributions by the Corporation to the holders of its Common Stock
      with respect to which any provision of any Section hereof refers to the
      taking of a record of such holders, the Corporation will in each such case
      take such a record and will take such record as of the close of business
      on a Business Day.

7.3     Closing
      of Transfer Books.  The
  Corporation shall not at any time, except upon dissolution, liquidation or
  winding up of the Corporation, close its stock transfer books or Warrant
  transfer books so as to result in preventing or delaying the exercise or
  transfer of any Warrant.

ARTICLE VIII

REGISTRATION


  
  8.1     Corporation
      Covenants.


  (a)     Registrable
  Securities.  As used herein,“Registrable Securities”
  shall mean (i) the Warrant Shares and (ii) any Common Stock issued or issuable
  at any time or from time to time in respect of the Warrant Shares upon a
  conversion, stock split, stock dividend, recapitalization or other similar
  event involving the Corporation; provided, however, that no shares shall be
  included in any registration under this Agreement unless such shares shall
  have been first converted to Common Stock; and provided further that shares
  shall cease to be Registrable Securities at




   

  9



   


  such time as they become eligible
  for sale pursuant to Rule 144 under the Securities Act, and provided further
  that shares shall cease to be Registrable Securities at such time as they are
  sold by a person in a transaction in which his rights under this Agreement are
  not properly assigned.

  (b)     Registration Upon
  Request.  At any time after the date hereof, the Holder or Holders of
  Registrable Securities constituting at least a majority of the total number of
  shares of Registrable Securities then outstanding or issuable upon exercise of
  then outstanding Warrants may request the Corporation to register under the
  Securities Act, for sale in accordance with the method of disposition
  specified in such notice, all or any portion of the Registrable Securities
  held by such requesting Holder or Holders; provided, however, that the
  aggregate offering price of the shares of Registrable Securities to be
  registered (if they constitute less than all of the Registrable Securities
  held by the requesting Holder or Holders) must be reasonably likely to equal
  or exceed $500,000; and provided further, that the Corporation shall have no
  obligation to (i) effect more than two (2) registration under this Section
  8.1(b) during any period of twelve (12) consecutive months; or (ii) to
  effect any registration under this Section 8.1(b) within 180 days after
  the effective date of any registered offering of the Corporation’s
  securities to the general public in which such Holder or Holders shall have
  been able to register all Registrable Securities as to which registration
  shall have been requested pursuant to Section 8.1(c).

    
  (c)     Incidental
  Registration.  If the Corporation at any time proposes to register any of
  its Common Stock under the Securities Act for sale to the public, whether for
  its own account or for the account of other security holders or both (except
  with respect to registration statements on Form S-8 or S-4 or another form not
  available for registering the Registrable Securities for sale to the public),
  each such time it will give written notice to the Holders of its intention to
  do so. Upon the written request of any Holder, given within ten (10) days
  after receipt of any such notice, to register any of such Holder’s
  Registrable Securities (which request must state the intended method of
  disposition thereof), the Corporation will use its commercially reasonable
  efforts (as set forth in Section 8.1(d)) to cause the Registrable
  Securities as to which registration has been so requested to be included in
  the securities to be covered by the registration statement proposed to be
  filed by the Corporation, all to the extent requisite to permit the sale or
  other disposition by such Holder (in accordance with its written request) of
  such Registrable Securities so registered. If any registration pursuant to
  this Section 8.1(c) is, in whole or in part, an underwritten public
  offering of Common Stock, any request by a Holder pursuant to this Section
  8.1(c) to register Registrable Securities must specify that such
  Registrable Securities are to be included in the underwriting on the same
  terms and conditions as the shares of Common Stock otherwise being sold
  through underwriters under such registration. Notwithstanding anything to the
  contrary contained in this Section 8.1(c), if there is a firm
  commitment underwritten offering of securities of the Corporation pursuant to
  a registration statement covering Registrable Securities and such Holder does
  not elect to sell its Registrable Securities to the underwriters of securities
  in connection with such offering, such Holder will refrain from selling such
  Registrable Securities during the period of distribution of the Corporation’s
  securities by such underwriters and the period in which the underwriting
  syndicate participates in the after market; provided, however, that the
  Holder, in any event, shall be entitled to sell its Registrable Securities
  commencing on the 180th day after the effective date of such registration
  statement.

  (d)     Obligations of
  the Corporation.  If and whenever the Corporation is required by the
  provisions of Section 8.1(b) or (c) hereof to use its
  commercially reasonable efforts to effect the registration of any of
  Registrable Securities under the Securities Act, the Corporation will, as
  expeditiously as possible:

  
  (i)     prepare and file
  with the Securities and Exchange Commission (the “SEC”) a
  registration statement on the appropriate form and in compliance in all
  material respects with the Securities Act (the “Registration
  Statement”) covering such Registrable Securities, and use its reasonable
  best efforts to have the Registration Statement declared effective as promptly
  as practicable;

  (ii)     prepare and file
  with the SEC such amendments and supplements to the Registration Statement as
  may be necessary to keep the Registration Statement effective (including,
  without limitation, any amendments or supplements which may be required as a
  result of any changes in any Holder’s plan of distribution) until the
  earlier of (1) such time as all the

  

   


    



   

  10






    
   


  
  Registrable Securities have been sold by
  the Holders or (2) such time as the Registrable Securities will no longer be
  required to be registered for the resale thereof by any Holder by reason of
  Rule 144 of the SEC under the Securities Act or any other rule of similar
  effect; provided, however, that the Corporation in good faith, may delay the
  filing of any amendment or supplement to the Registration Statement for a
  reasonable period of time, not to exceed 90 days, in order to permit the
  Corporation (A) to effect disclosure or disposition or consummation of any
  transaction requiring confidential treatment which is being actively pursued
  at such time and which would require disclosure in the Registration Statement
  or (B) to negotiate, effect or complete any transaction which the Corporation
  reasonably believes might be jeopardized, delayed or made more costly to the
  Corporation by disclosure in the Registration Statement;

  

  
  (iii)     advise the
  Holders, promptly after it shall receive notice or obtain knowledge thereof,
  of the issuance by the SEC of any stop order suspending the effectiveness of
  the Registration Statement, of the suspension of the qualification of the
  Registrable Securities for offering or sale in any jurisdiction, or of the
  initiation or threatening of any proceeding for any such purpose if such stop
  order, suspension or proceeding would prohibit the resale of the Registrable
  Securities by any Holder; and it will promptly use its reasonable best efforts
  to prevent the issuance of any stop order or to obtain its withdrawal if such
  a stop order should be issued;

  


  
  (iv)
       use its reasonable
  best efforts to furnish to the Holders with respect to the Registrable
  Securities registered on the Registration Statement (and to each underwriter,
  if any, of such Registrable Securities) such number of copies of the
  prospectus included in the Registration Statement (the “Prospectus”)
  in conformity with the requirements of the Securities Act and such other
  documents as the Holders may reasonably request, in order to facilitate the
  resale of all or any of the Registrable Securities by the Holders, it being
  understood and agreed that the Holders will comply with the provisions of the
  Securities Act and of such other securities or state securities laws
  (“Blue Sky”) as may be applicable to selling stockholders in
  connection with any use of the Prospectus;
  


  
  (v)      within the time
  during which a Prospectus is required to be delivered under the Securities
  Act, comply as far as it is able with all requirements imposed upon it by the
  Securities Act, as now and hereafter amended, and by the rules and
  regulations, as from time to time in force, so far as necessary to permit the
  continuance of sales of the Registrable Securities as contemplated by the
  provisions hereof and the Prospectus. If during such period any event occurs
  as a result of which the Prospectus as then amended or supplemented would
  include an untrue statement of a material fact or omit to state a material
  fact necessary to make the statements therein, in the light of the
  circumstances then existing, not misleading, or if during such period it is
  necessary to amend the Registration Statement or supplement the Prospectus to
  comply with the Securities Act, the Corporation will promptly notify the
  Holders and will, subject to the proviso in clause (ii) above, amend the
  Registration Statement or supplement the Prospectus so as to correct such
  statement or omission or effect such compliance and will immediately notify
  the Holders of the filing and effectiveness of each amendment to the
  Registration Statement and the filing of each supplement to the Prospectus;

  


  
  (vi)     use
 its reasonable best efforts to register and qualify the Registrable Securities under the
  securities laws of such jurisdictions as any of the Holders may reasonably
  request and to continue such qualifications in effect so long as the
  Registration Statement is kept effective pursuant to this Section 8.1,
  except that the Corporation shall not be required in connection therewith to
  qualify as a foreign corporation or to execute a general consent to service of
  process in any such jurisdiction;

    


  
(vii)     if the Registrable
  Securities are to be sold in an underwritten offering, the Corporation will
  furnish, at the request of the selling Holder(s), on the date that such
  Registrable Securities are delivered to the underwriters for sale in an
  underwritten public offering (1) an opinion, dated as of such date, of counsel
  for the Corporation for the purposes of such registration, 

    




  

   

  11

    



   

  
  

  
  
  addressed to the
  underwriters, in a customary form and covering maters of the type customarily
  covered in opinions of issuer’s counsel delivered to the underwriters in
  underwritten public offerings, and such other legal matters as such
  underwriter may reasonably request, and (2) a  “comfort” letter,
  dated as of such date, signed by the independent public accountants of the
  Corporation who have certified the Corporation’s financial statements
  included in such registration statement, addressed to the underwriters, in a
  customary form and covering matters of the type customarily covered in
  accountants’  “comfort” letters delivered to the underwriters in
  underwritten public offerings and such other financial information (including
  information as to the period ending not more than five (5) business days prior
  to the date of such letter) as such underwriter may reasonably request; and,
  with each Holder, enter into customary agreements (including an underwriting
  agreement in customary form) and take such other actins as are reasonably
  required in order to expedite or facilitate the disposition of Registrable
  Securities in an underwritten offering; and


  (viii)     bear all expenses
  in connection with the procedures in this Section 8.1 (including
  without limitation all federal and state registration, qualification and
  filing fees, printing expenses, fees and disbursements of counsel for the
  Corporation, blue sky fees and expenses and the expense of any special audit
  incident to or required by any such registration), other than underwriting
  discounts, selling commissions, and fees and the expenses, if any, of counsel
  or other advisers to any of the Holders, which shall be borne by the Holders.

  


  (e)     The Corporation
  shall be entitled to require that the parties refrain from effecting any
  public sales or distributions 



 of the Registrable Securities pursuant to a
  Registration Statement that has been declared effective by the SEC or
  otherwise, if the board of directors of the Corporation reasonably determines
  that such, public sales, or distributions would interfere in any material
  respect with any transaction involving the Corporation that the board of
  directors reasonably determines to be material to the Corporation. The board
  of directors shall, as promptly as practicable, give the holders of the
  Registrable Securities written notice of any such development. In the event of
  a request by the board of directors of the Corporation that the holders of
  Registrable Securities refrain from effecting any public sales or
  distributions of the Registrable Securities, the Corporation shall be required
  to lift such restrictions regarding effecting public sales or distributions of
  the Registrable Securities as soon as reasonably practicable after the board
  of directors shall reasonably determine public sales or distributions by the
  holders of the Registrable Securities shall not interfere with such
  transaction, provided, that in no event shall any requirement that the
  holders of Registrable Securities refrain from effecting public sales or
  distributions in the Registrable Securities extend for more than 180 days.

  (f)     If any Registration
  Statement relates to an underwritten public offering, the right of any Holder
  to participate in such registration pursuant shall be conditioned upon such
  Holder participating in such reasonable underwriting arrangements as the
  Corporation shall make regarding the offering, and the inclusion of
  Registrable Securities in the underwriting shall be limited to the extent
  provided herein. The participating Holders and all other shareholders
  proposing to distribute their securities through such underwriting shall
  (together with the Corporation and the other shareholders distributing their
  securities through such underwriting) enter into an underwriting agreement in
  customary form with the managing underwriter selected for such underwriting by
  the Corporation. Notwithstanding any other provision of this Agreement, if the
  managing underwriter concludes in its reasonable judgment that the number of
  shares to be registered for selling shareholders (including the Holders) would
  materially adversely effect such offering, the number of Registrable
  Securities to be registered, together with the number of shares of Common
  Stock or other securities held by other shareholders proposed to be registered
  in such offering, shall be reduced on a pro rata basis based on the number of
  Registrable Securities proposed to be sold by each Holder as compared to the
  number of shares proposed to be sold by all shareholders. If any Holder
  disapproves of the terms of any such underwriting, it may elect to withdraw
  therefrom by written notice to the Corporation and the managing underwriter,
  delivered not less than 10 days before the effective date. The Registrable
  Securities excluded by the managing underwriter or withdrawn from such
  underwriting shall be withdrawn from such registration, and shall not be
  transferred in a public distribution prior to 180 days after the effective
  date of the registration statement relating thereto, or such other shorter
  period of


  



  

   

  12



   

  

   time as the underwriters may require.

  (g)     The Corporation
  shall have the right to terminate or withdraw any Registration Statement
  initiated by it under Section 8.1(c) of this Agreement prior to the
  effectiveness of such Registration Statement whether or not any Holder has
  elected to include securities in such registration.

    

8.2     Holder
    Covenants.
    

  
  (a)     Each Holder shall
  furnish the Corporation such information regarding such Holder and the
  distribution of such Registrable Securities as the Corporation may from time
  to time reasonably request in writing.

  (b)     Each Holder of the
  Registrable Securities agrees by acquisition of such Registrable Securities to
  give at least three (3) business hours prior written notice to the Corporation
  of any proposed sale of Registrable Securities pursuant to an effective
  Registration Statement, specifying the proposed date of such sale, and not to
  make such sale (1) unless such three (3) business hours elapse without
  response from the Corporation, or (2) in the event the Corporation responds by
  stating that an amendment to such Registration Statement or supplement to the
  Prospectus must be filed in accordance with Section 8.1(d)(v), until
  the Corporation notifies the Holder that the Registration Statement has been
  amended or the Prospectus supplemented as required. Each Holder further agrees
  that if the Registrable Securities are not sold within 24 hours of the time
  such notice is delivered to the Corporation, it will not sell any Registrable
  Securities without again complying with the notice provisions of this Section
  8.2(b). For purposes hereof, “business hours” means the hours of
  9:00 a.m. to 6:00 p.m. on any day when the New York Stock Exchange is open for
  trading.

  (c)     Each Holder of the
  Registrable Securities agrees by acquisition of such Registrable Securities
  that upon receipt of any notice from the Corporation of the happening of any
  event of the kind described in the second sentence of subdivision (v) of Section
  8.1(d) or pursuant to Section 8.1(e), such Holder will forthwith
  discontinue such Holder’s disposition of Registrable Securities pursuant to
  the Registration Statement relating to such Registrable Securities until such
  Holder’s receipt of the copies of the supplemented or amended prospectus
  contemplated by subdivision (v) of Section 8.1(a) or of notice from the
  Corporation pursuant to Section 8.1(e), and, if so directed by the
  Corporation, will deliver to the Corporation (at the Corporation’s expense)
  all copies, other than permanent file copies, then in such Holder’s
  possession of the Prospectus relating to such Registrable Securities at the
  time of receipt of such notice.

  8.3     Indemnification.
  
  (a)     The Corporation will
  indemnify each Holder, each of its officers, directors and constituent
  partners, legal counsel for the Holder, and each person controlling such
  Holder, with respect to which registration, qualification or compliance of
  Registrable Securities has been effected pursuant to this Agreement, and each
  underwriter, if any, and each of its officers, directors, constituent
  partners, legal counsel for such underwriter and each person who controls any
  underwriter against all claims, losses, damages or liabilities (or actions in
  respect thereof) to the extent such claims, losses, damages or liabilities
  arise out of or are based upon any untrue statement (or alleged untrue
  statement) of a material fact contained in any Prospectus or other document
  (including any related Registration Statement) incident to any such
  registration, qualification or compliance, or any omission (or alleged
  omission) to state therein a material fact required to be stated therein or
  necessary to make the statements therein not misleading, or any violation by
  the Corporation of any rule or regulation promulgated under the Securities Act
  applicable to the Corporation and relating to action or inaction required of
  the Corporation in connection with any such registration, qualification or
  compliance; and the Corporation will reimburse each such Holder, each such
  underwriter and each person who controls any such Holder or underwriter, for
  any legal and any other expenses reasonably incurred in connection with
  investigating or defending any such claim, loss, damage,

  



   

  13



   

  


  
  liability or action;
  provided, however, that the indemnity contained in this Section 8.3(a)
  shall not apply to amounts paid in settlement of any claim, loss, damage,
  liability or action if settlement is effected without the consent of the
  Corporation (which consent shall not unreasonably be withheld); and provided,
  further, that the Corporation will not be liable in any such case to the
  extent that any such claim, loss, damage, liability or expense arises out of
  or is based upon any untrue statement or omission based upon written
  information furnished to the Corporation by such Holder, underwriter or
  controlling person and stated to be for use in connection with the offering of
  Registrable Securities. Notwithstanding the above, the foregoing indemnity
  agreement is subject to the condition that, insofar as it relates to any such
  untrue statement, alleged untrue statement, omission or alleged omission made
  in a preliminary prospectus on file with the SEC at the time the Registration
  Statement becomes effective or the amended prospectus filed with the SEC
  pursuant to Rule 424(b) (the “Final Prospectus”), such indemnity
  agreement shall not inure to the benefit of any underwriter or any Holder, if
  there is no underwriter, if a copy of the Final Prospectus was not furnished
  to the person asserting the loss, liability, claim or damage at or prior to
  the time such action is required by the Securities Act.

  (b)     Each Holder will indemnify the Corporation, each of its directors and officers, each legal
  counsel and independent accountant of the Corporation, each underwriter, if
  any, of the Corporation’s securities covered by such a Registration
  Statement, each person who controls the Corporation or such underwriter within
  the meaning of the Securities Act, and each other such Holder, each of its
  officers, directors and constituent partners and each person controlling such
  other Holder, against all claims, losses, damages and liabilities (or actions
  in respect thereof) arising out of or based upon any untrue statement (or
  alleged untrue statement) of a material fact contained in any such
  Registration Statement, prospectus, offering circular or other document, or
  any omission (or alleged omission) to state therein a material fact required
  to be stated therein or necessary to make the statements therein not
  misleading, or any violation by such Holder of any rule or regulation
  promulgated under the Securities Act applicable to such Holder and relating to
  action or inaction required of such Holder in connection with any such
  registration, qualification or compliance, and will reimburse the Corporation,
  such Holder, such directors, officers, partners, persons, law and accounting
  firms, underwriters or control persons for any legal and any other expenses
  reasonably incurred in connection with investigating or defending any such
  claim, loss, damage, liability or action, in each case to the extent, but only
  to the extent, that such untrue statement (or alleged untrue statement) or
  omission (or alleged omission) is made in such Registration Statement,
  prospectus, offering circular or other document in reliance upon and in
  conformity with written information furnished to the Corporation by such
  Holder and stated to be specifically for use in connection with the offering
  of Registrable Securities; provided, however, that each Holder’s liability
  under this Section 8.3(b) shall not exceed such Holder’s proceeds
  from the offering of Registrable Securities made in connection with such
  registration.

  (c)     Promptly after
  receipt by an indemnified party under this Section 8.3 of notice of the
  commencement of any action, such indemnified party will, if a claim in respect
  thereof is to be made against an indemnifying party under this Section 8.3(c),
  notify the indemnifying party in writing of the commencement thereof and
  generally summarize such action. The indemnifying party shall have the right
  to participate in and to assume the defense of such claim; provided, however,
  that the indemnifying party shall be entitled to select counsel for the
  defense of such claim with the approval of any parties entitled to
  indemnification, which approval shall not be unreasonably withheld; provided
  further, however, that if either party reasonably determines that there may be
  a conflict between the position of the Corporation and the Holders in
  conducting the defense of such action, suit or proceeding by reason of
  recognized claims for indemnity under this Section 8.3, then counsel
  for such party shall be entitled to conduct the defense to the extent
  reasonably determined by such counsel to be necessary to protect the interest
  of such party, and the reasonable fees and expenses of such counsel shall be
  paid by the indemnifying party.

  (d)     If
the indemnification provided for in this Section 8.3 from an indemnifying
  party is unavailable to an indemnified party hereunder in respect to any
  losses, claims, damages, liabilities or expenses referred to herein, 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, liabilities or expenses in such proportion as
  is appropriate to reflect the relative fault of the indemnifying party and
  indemnified party in connection with the statements or omissions which result
  in such losses, claims, damages, liabilities or expenses, as well as any other
  relevant equitable considerations. The relative fault of such indemnifying
  party and indemnified party shall be determined by reference to, among other
  things, whether the untrue or alleged untrue statement of a material fact or
  the omission or alleged omission to state a material fact relates to
  information supplied by such indemnifying party or indemnified party and the
  parties’ relative intent, knowledge, access to information supplied by such
  indemnifying party or

  


   

  14

  

   


  
  indemnified party and the parties’ relative intent,
  knowledge, access to information and opportunity to correct or prevent such
  statement or omission. The amount paid or payable by a party as a result of
  the losses, claims, damages, liabilities and expenses referred to above shall
  be deemed to include any legal or other fees or expenses reasonably incurred
  by such party in connection with investigating or defending any action, suit,
  proceeding or claim.

  ARTICLE IX
  
MISCELLANEOUS



      9.1     Loss
  
      or Mutilation.  Upon receipt by the Corporation from any Holder of evidence reasonably
    satisfactory to the Corporation of the ownership of and the loss, theft,
    destruction or mutilation of a Warrant Certificate and an indemnity
    reasonably satisfactory to it (it being understood that the written
    indemnification agreement of Holder shall be a sufficient indemnity) and, in
    case of mutilation, upon surrender and cancellation hereof, the Corporation
    will execute and deliver in lieu hereof a new Warrant Certificate of like
    tenor to such Holder; provided, however, that,
    in the case of mutilation, no indemnity shall be required if such Warrant in
    identifiable form is surrendered to the Corporation for cancellation.
    
9.2     Payment
    of Taxes.  The Corporation shall pay any taxes
    and other governmental charges that may be imposed under the laws of the
    United States of America or any political subdivision or taxing authority
    thereof or therein in respect of the issue or delivery of Warrant Shares or
    of other securities or property deliverable upon exercise of the Warrants
    (other than income taxes imposed on the Holders). The Corporation shall not
    be required, however, to pay any tax or other charge imposed in connection
    with any transfer involved in the issue of any certificate for Warrant
    Shares or other securities or property issuable upon the exercise of the
    Warrants or payment of cash to any person other than the Holder of a Warrant
    Certificate surrendered upon exercise of the Warrants, and in case of such
    transfer or payment, the Corporation shall not be required to issue any
    stock certificate or pay any cash until such tax or charge has been paid or
    it has been established to the Corporation’s satisfaction that no such tax
    or charge is due.
    
9.3     Notices.  Any notice, demand or delivery authorized by this Agreement shall be in
    writing and shall be delivered (a) by hand or overnight courier service or
    (b) mailed or sent by electronic transmission or
    transmission by telecopier or confirmed facsimile, in each case properly
    addressed to the party to be notified at the addresses set forth in the Credit Agreement or
    such other address or telecopy number as shall have been furnished to the
    party giving or making such notice, demand or delivery. Any notice that is
    sent in a manner provided herein shall have been duly given when sent.

    
9.4     Governing
    Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
    CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA WITHOUT
    GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF.
    
9.5     Assignment;
    Successors.  Subject to Section 6.2(a)
    hereof, this Agreement may be assigned by the Investors to any Affiliate  at
    any time upon written notice. This Agreement shall be binding upon and inure
    to the benefit of the Corporation and the Investors and their respective
    successors and assigns, and the Holders from time to time of the Warrants.
    Nothing in this Agreement is intended or shall be construed to confer upon
    any person, other than the Corporation, and the Investors, any right, remedy
    or claim under or by reason of this Agreement or any part hereof. The
    parties acknowledge, that upon the assignment of an Investor’s rights
    under the Credit Agreement as provided in Section 11.1 of the Credit
    Agreement, the assignee of said rights shall become a party hereto as an  “Investor”, with all rights, obligations and benefits of an
    Investor hereunder; provided, however, that any Investor who receives a
    Warrant Certificate hereunder prior to any such assignment, shall after such
    assignment, continue to have all rights under this Agreement with respect to
    said Warrant Certificate and the Warrant Shares issuable thereunder.
9.6     Counterparts.  This Agreement may be executed manually or by facsimile in any number of
    counterparts, each of which shall be deemed an original, but all of which
    together shall constitute one and the same instrument.
9.7     Amendments.  Any provision of this Agreement or the Warrant Certificates may be amended
    or waived if, but only if, such amendment or waiver is in writing and is
    signed by the Corporation and the Investors holding a majority in interest
    of the issued or issuable Warrant Shares; provided, however, if any
    amendment
 
15
 



 
adversely affects any Investor materially differently than it
    affects all other Investors hereunder, said amendment shall not be effective
    against such Investor without the written consent of such Investor.
    
9.8     Headings.  The descriptive headings of the several 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.
    
9.9     Third
    Party Beneficiaries.  Each Holder shall be a
    third party beneficiary to the agreements made hereunder 



 between the
    Corporation, on the one hand, and the Investors, on the other hand, and each
    such Holder shall have the right to enforce such agreements directly to the
    extent it deems such enforcement necessary or advisable to protect its
    rights.
9.10     Severability.  In the event that any one or more of the provisions contained herein, or the
    application thereof in any circumstances 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 or affected
    thereby, it being intended that all of the rights and privileges of the
    parties shall be enforceable to the fullest extent permitted by law.
    
9.11     No Inconsistent Agreements.  The Corporation has
    not, as of the date hereof, entered into, nor shall it, on or after the date
    hereof, enter into, any agreement that is inconsistent with the rights
    granted to the Investors herein or that otherwise conflicts with the
    provisions hereof.

    9.12     Limitation
    on Holders’ Rights.  Prior to the exercise of any Warrant, the
    Holder thereof shall not be entitled to any rights of a shareholder,
    including, without limitation, the right to vote or receive dividends or
    other distributions, or any notice of any proceedings of the Company except
    as expressly provided in this Agreement.



 




16



 



IN WITNESS WHEREOF,
the parties have caused this Warrant Agreement to be duly executed, as of the
date first above written

 

		MILLER INDUSTRIES, INC.
		 
		 
		By:        /s/
      Frank Madonia
      

    
		Name:  Frank
      Madonia
    
		Title:    Executive
      Vice President
    


 



 

		BANK OF AMERICA, N.A.
		 
		 
		By:       /s/
      John P. McDuffie
      

    
		Name:  John
      P. McDuffie
    
		Title:    Vice
      President
    


 

		WACHOVIA BANK, N.A.
		 
		 
		By:       /s/
      William W. Teegarden
      

    
		Name:   William
      W. Teegarden
    
		Title:     Senior
      Vice President
    


 

		AMSOUTH BANK, N.A.
		 
		 
		By:       /s/
      M. Rex Hamilton
      

    
		Name:  M.
      Rex Hamilton
    
		Title:    Commercial
      Banking Officer
    


 

		SUNTRUST BANK
		 
		 
		By:       /s/
      Samuel Ballesteros
      

    
		Name:  Samuel
      Ballesteros
    
		Title:    Director
    



 



 

EXHIBIT
A

FORM OF WARRANT
CERTIFICATE


 


THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.

THE SECURITIES EVIDENCED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE ACT OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS REGISTERED OR QUALIFIED UNDER THE ACT
AND APPLICABLE SECURITIES LAWS OR OTHER JURISDICTIONS, OR THE CORPORATION
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION AND
QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE LAW.


 

No.
______ Warrants to purchase an aggregate


 of
__________ Shares of Common Stock



 

WARRANT
TO PURCHASE COMMON STOCK

This certifies that, for value received, _______________________ (the “Holder”) or its assigns, is entitled to purchase [__] shares of
common stock (“Common Stock”) (as adjusted for any stock splits, stock
dividends, combinations, recapitalizations and similar events), of Miller
Industries, Inc. (the “Corporation”). This Warrant entitles the holder
thereof (the “Holder”) to purchase from the Corporation the shares of
Common Stock issuable hereunder at the purchase price (the “Exercise
Price”) of [$__] per share subject to the terms and conditions hereof and
of that certain Warrant Agreement, dated July 23, 2001, among the Corporation
and the Investors thereto (the “Agreement”). All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement. The number of shares purchasable upon exercise of this Warrant
Certificate and the Exercise Price per share are subject to adjustment from time
to time as set forth in the Agreement. In order to exercise this Warrant
Certificate, the registered Holder hereof must surrender this Warrant
Certificate and pay the appropriate Exercise Price at the office of Corporation
as set forth in the Agreement or to its successor.

This Warrant Certificate is one of a duly authorized issue of warrants
evidencing the right to purchase shares of Common Stock of the Corporation  and



is issued under and in accordance with the Agreement, and is subject to the
terms and provisions contained therein, to all of which terms and provisions the
Holder of this Warrant Certificate consents by acceptance hereof. The Agreement
is hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Agreement for a full description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Corporation and
the Holder of the Warrants. The summary of the terms of the Agreement contained
in this Warrant Certificate is qualified in its entirety by express reference to
the Agreement.

Copies of  the


 Agreement are on file at the office of the Corporation and may be
obtained by writing to the Corporation requesting the same.

 All shares of Common Stock issuable by the Corporation upon the exercise of this
Warrant Certificate shall be validly issued, fully paid and nonassessable.

Subject
to the requirements set forth in the Agreement and the restrictions on
transfer set forth above, this Warrant Certificate and all rights hereunder
shall be transferable by the registered Holder hereof on the register of the
Corporation maintained by the Corporation for such purpose at its office upon
surrender of this Warrant Certificate duly endorsed, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation duly executed, by
the registered Holder hereof or such Holder’s attorney duly authorized in
writing and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any partial transfer the Corporation
will issue and deliver to such Holder a new Warrant Certificate with respect to
any portion not so transferred.

 

A-1



 


 This Warrant Certificate


 shall be void and all exercise rights evidenced hereby
shall cease on [_________ __, ____].

 

 

A-2



 

This Warrant Certificate
and the Agreement  are


 subject to amendment as provided in the Agreement.

 

Dated:
________ ___, _____.

 



		MILLER INDUSTRIES,
INC.
      

    
		 
		 
		By:
      

    
		Name:
      
      

    
		Title:
      

    


 

A-3

 



 

ATTACHMENT-1







Notice
of Intention to Exercise Warrant for Cash

 


The undersigned holder of the attached Warrant Certificate hereby exercises the
right to exchange the attached Warrant Certificate for the number of shares of
Common Stock of Miller Industries, Inc. shown below in accordance with the terms
thereof and directs that (i) such shares be issued and delivered to the
undersigned as provided by the terms of the attached Warrant Certificate, and
(ii) a certificate representing the number of shares covered by the attached
Warrant Certificate which shall thereafter remain unexercised, if any, also be
delivered to the undersigned. This notice is accompanied by the aggregate
purchase price shown below.

1.     
Number of shares as to which exercised: ________________________________

         AND

2.     
Aggregate Purchase Price: ___________________________________________

 

		
      

     
		(Signature of Holder)


 

 

 

B-1