Warrant

EXHIBIT 10.99


THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.


WARRANT


To Purchase Common Stock of Aris Industries, Inc.


a New York corporation


No. 001 New York, New York
584,345 Shares September 30, 1996


THIS IS TO CERTIFY that Heller Financial, Inc., a Delaware corporation having its principal place of business at 500 West Monroe Street, Chicago, Illinois 60661, or its registered assigns, is entitled upon the due exercise hereof at any time during the Exercise Period (as hereinafter defined) to purchase 584,345 shares of Common Stock, $.01 par value, of Aris Industries, Inc., a New York corporation (the "Company"), at an Exercise Price of $.01 per share and to exercise the other rights, powers and privileges hereinafter provided, all on the terms and subject to the conditions set forth herein. The foregoing Exercise Price and number of shares of Common Stock purchasable hereunder are subject to adjustment as hereinafter set forth.


ARTICLE I
DEFINITIONS


The terms defined in this Article I, whenever used in this Warrant, shall have the following respective meanings:


"Adjustment Transaction" shall mean any of (i) the declaration of a dividend upon, or distribution in respect of, any of the Company's capital stock, payable in Common Stock, Convertible Securities or Stock Purchase Rights, (ii) the subdivision or



combination by the Company of its outstanding Common Stock into a larger or smaller number of shares of Common Stock, as the case may be, (iii) a Dilutive Transaction, (iv) any capital reorganization or reclassification of the capital stock of the Company, (v) the consolidation or merger of the Company with or into another corporation, (vi) the sale or transfer of the property of the Company as (or substantially as) an entirety or (vi) any event as to which the foregoing clauses are not strictly applicable but the failure to make an adjustment in the Exercise Price hereunder would not fairly protect the purchase rights, without dilution, represented by this Warrant.


"Affiliate" shall mean, with respect to any Person (i) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the stock or other evidence of ownership having ordinary voting power in the election of directors of such Person, (ii) each Person that controls, is controlled by or is under common control with such Person or any Affiliate of such Person or (iii) each of such Person's officers, directors, joint ventures and partners. For the purpose of this definition, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.


"Closing Date" means September 30, 1996.


"Commission" means the Securities and Exchange Commission or another Federal agency from time to time administering the Securities Act.


"Common Stock" means the Company's Common Stock, $.01 par value, any stock into which such stock shall have been changed or any stock resulting from any reclassification of such stock and any class of capital stock of the Company now or hereafter authorized having the right to share in distributions either of earnings or assets of the Company without limit as to amount or percentage.


"Company" has the meaning set forth on the cover page of this Warrant and shall include any successor corporation.


"Convertible Securities" means evidences of indebtedness, shares of stock (other than Common Stock) or other securities which are convertible into or exchangeable for, with or without payment of additional consideration, additional shares



of Common Stock, either immediately or upon the arrival of a specified date or the happening of a specified event.


"Current Market Price" as to any security on any date specified herein means the average of the daily closing prices for the thirty (30) consecutive trading days before such date excluding any trades which are not bona fide arm's length transactions. The closing price for each day shall be (i) the mean between the closing high bid and low asked quotations of any such security in the over-the-counter market as shown by the National Association of Securities Dealers, Inc. Automated Quotation System, or any similar system of automated dissemination of quotations of securities prices then in common use, if so quoted, as reported by any member firm of the New York Stock Exchange selected by the Company, (ii) if not quoted as described in clause (i), the mean between the high bid and low asked quotations for any such security as reported by the National Quotation Bureau Incorporated or any similar successor organization, as reported by any member firm of the New York Stock Exchange selected by the Company, or (iii) if any such security is listed or admitted for trading on any national securities exchange, the last sale price of any such security, regular way, or the mean of the closing bid and asked prices thereof if no such sale occurred, in each case as officially reported on the principal securities exchange on which any such security is listed. If any such security is quoted on a national securities or central market system in lieu of a market or quotation system described above, the closing price shall be determined in the manner set forth in clause (i) of the preceding sentence if bid and asked quotations are reported but actual transactions are not, and in the manner set forth in clause (iii) of the preceding sentence if actual transactions are reported.


"Dilutive Transaction" shall mean any issuance by the Company after the Closing Date to employees, directors, officers or consultants of the Company or its subsidiaries, any Affiliate of the foregoing or any Affiliate of the Company of shares of Common Stock (or Stock Purchase Rights or Convertible Securities that would permit the purchase of Common Stock but other than Employee Benefit Shares or Stock Purchase Rights or Convertible Securities to purchase or convert into Employee Benefit Shares) for a consideration less than the greater of (i) the Exercise Price per share then in effect or (ii) the then Fair Value per share then in effect.


"Employee Benefit Shares" mean shares of Common Stock issued to and held by a person upon exercise of such person's rights, or upon the grant to such person, (i) under a stock incentive,


stock option, stock bonus, stock purchase or other benefit plan, program or contract of the Company for, or (ii) as a component of compensation to, employees, directors, officers and/or consultants of the Company or its subsidiaries, which is approved by the Board of Directors of the Company.


"Exercise Period" means the period commencing on the Closing Date and terminating on the tenth anniversary of the Closing Date.


"Exercise Price" means the price per share of Common Stock set forth on the cover page of this Warrant, as such price may be adjusted pursuant to Article IV.


"Fair Value" means the fair value of the appropriate security, property, assets, business or entity (taking into account the value to such business or entity of any covenant not to compete in favor thereof) as determined by an opinion of an independent investment banking firm of national reputation (which may be the firm regularly retained by the Company) selected by the Company and reasonably acceptable to the holder(s) of this Warrant or, if Fair Value is being determined other than for purposes of Article IV, the holders of Issued Warrant Shares (who, if more than one, shall agree among themselves by a two-thirds majority). In the case of any event which gives rise to a requirement to determine "Fair Value" pursuant to this Warrant, the Company shall be responsible for initiating the process by which Fair Value shall be determined as promptly as practicable, but in any event within thirty (30) days, following such event. Such investment banking firm shall determine the fair value of the security, property, assets, business or entity, as the case may be, in question and deliver its opinion in writing to the Company and to each such holder. The determination so made shall be conclusive and binding on the Company and such holders. The fees and expenses of any such determination made by such investment banking firm shall be borne by the Company. In determining Fair Value, no discount shall be imposed by reason of a minority ownership interest or the illiquidity of the stock interest being valued. The Fair Value of the Warrant Shares shall be determined without regard to the fact that the Warrant Shares may constitute a minority ownership interest in a closely held corporation. Notwithstanding the foregoing, if the Common Stock is traded on a public market, Fair Value means, with reference to the Warrant Shares, the Current Market Price of the Common Stock as of any date of determination.


"Initial Holder" means Heller Financial, Inc.


"Issuable Warrant Shares" means the number of shares of Common Stock issuable from time to time upon exercise of this Warrant.


"Issued Warrant Shares" means (a) the cumulative total of shares of Common Stock issued from time to time upon exercise of this Warrant plus (b) any shares of Common Stock issued as a stock dividend with respect to any shares of the type described in (a) or as part of a stock split affecting such shares.


"Notice of Exercise" means the form of Notice of Exercise set forth on Exhibit 1.


"Permitted Payment Methods" means either of (a) wire transfer of immediately available funds to an account in a bank located in the United States designated by the payee for such purpose or (b) delivery of a certified or official bank check.


"Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether federal, state, country, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).


"Securities Act" means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.


"Stock Purchase Rights" means any warrants, options or other rights to subscribe for, purchase or otherwise acquire any shares of Common Stock or any Convertible Securities.


"Warrant" means this Warrant dated as of Closing Date issued to the Initial Holder and all warrants issued upon the partial exercise, transfer or division of, or in substitution for, any warrant.


"Warrant Shares" means the Issuable Warrant Shares plus the Issued Warrant Shares.


The following terms have the meanings given to them in the indicated Sections of this Warrant:


Term Section
---- -------
"Distribution" 6.1
"Piggy-Back Shares" 5.1
"Rule 144" 5.8
"Rule 144A" 5.8


Whenever used in this Warrant, any noun or pronoun shall be deemed to include both the singular and plural and to cover all genders, and the words "herein," "hereof," and "hereunder" and words of similar import shall refer to this instrument as a whole, including any amendments hereto. Unless specified otherwise, all Article, Section and Exhibit references shall be to the Articles, Sections and Exhibits of or to this Warrant.


ARTICLE II
EXERCISE OF WARRANT


2.1 Right to Exercise. On the terms and subject to the conditions of this Article II, the holder hereof shall have the right, at its option, to exercise this Warrant in whole or in part at any time during the Exercise Period.


2.2 Manner of Exercise; Issuance of Common Stock. To exercise this Warrant, the holder hereof shall deliver to the Company (a) a Notice of Exercise duly executed by such holder specifying the number of shares of Common Stock to be purchased, (b) an amount equal to the aggregate Exercise Price for all shares of Common Stock to be purchased pursuant to this Warrant and (c) this Warrant. At the option of such holder, payment of the Exercise Price may be made by (A) either of the Permitted Payment Methods, (B) deduction from the number of shares delivered upon exercise of the Warrant of a number of shares which has an aggregate Current Market Price on the date of exercise equal to the aggregate Exercise Price for all shares to be purchased pursuant to this Warrant (or in the event that the Current Market Price is not then ascertainable, then at such price per share as the Company and the holder hereof may mutually agree upon or, if the Company and the holder hereof are unable so to agree, then at the Fair Value determined according to the procedures set forth within the definition of such term) or (C) by any combination of the foregoing methods.


Upon receipt of the required deliveries, the Company shall, as promptly as practicable but in any event within five Business Days thereafter, cause to be issued and delivered to the holder hereof (or its nominee) or, subject to Article V, the transferee designated in the Notice of Exercise, a certificate or certificates representing shares of Common Stock equal to the aggregate number of shares of Common Stock specified in the Notice of Exercise (less any shares in payment of a cashless exercise pursuant to Section 2.2(B)). Such certificate or certificates shall be registered in the name of the holder hereof (or its nominee) or in the name of such transferee, as the case may be. If this Warrant is exercised in part, the Company shall, at the time of delivery of such certificate or certificates, unless the Exercise Period has then expired, issue and deliver to the holder hereof or, subject to Article V, the transferee so designated in the Notice of Exercise, a new Warrant evidencing the right of the holder hereof or such transferee to purchase the aggregate number of shares of Common Stock for which this Warrant shall not have been exercised, and this Warrant shall be canceled.


2.3 Effectiveness of Exercise. Unless otherwise requested by the holder hereof, this Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the holder or transferee so designated in the Notice of Exercise shall be deemed to have become the holder of record of such shares for all purposes, as of the close of business on the date on which each of the Notice of Exercise, payment of the Exercise Price (unless a cashless exercise is being effected pursuant to Section 2.2(B)) and this Warrant are received by the Company.


2.4 Fractional Shares. The Company shall not issue fractional shares of Common Stock upon any exercise of this Warrant. As to any fractional share of Common Stock which the holder hereof would otherwise be entitled to purchase from the Company, the Company shall purchase from the holder such fractional share at a price equal to an amount calculated by multiplying such fractional share (calculated to the nearest .001 of a share) by the Fair Value thereof calculated as of the date of the Notice of Exercise. Payment of such amount shall be made at the time of delivery of any certificate or certificates deliverable upon such exercise in cash or by check payable to the order of the holder hereof or, subject to Article V, the transferee designated in the Notice of Exercise, as the case may be.


2.5 Continued Validity. A holder of shares of Common Stock issued upon the whole or partial exercise of this Warrant shall continue to be entitled to all rights to which a holder of this Warrant is entitled pursuant to the provisions hereof except such rights as by their terms apply solely to the holder of a Warrant. The Company agrees and acknowledges that each such holder of shares of Common Stock shall be and is hereby deemed to be a third party beneficiary of this Warrant.


ARTICLE III
REGISTRATION, TRANSFER AND EXCHANGE


The Company shall keep at its principal office an open register in which it shall provide for the registration, transfer and exchange of this Warrant. The holder hereof and the Company shall take such actions as may be necessary from time to time (or as may be reasonably requested by the other party) to effect the proper registration of this Warrant or portions hereof and in connection with any transfer or exchange of this Warrant or portions hereof. All Warrants issued upon any registration of transfer or exchange of Warrants shall be the valid obligations of the Company, evidencing the same rights, and entitled to the same benefits, as the Warrants surrendered upon such registration of transfer or exchange.


Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, the Company will execute and deliver, in lieu thereof, a new Warrant. The Company and any agent of the Company may treat the Person in whose name this Warrant is registered on the register kept at the principal office of the Company as the owner and holder thereof for all purposes.


ARTICLE IV
ANTIDILUTION PROVISIONS


4.1 General Statements of Intent; Adjustment of Number of Shares Purchasable. The Company hereby acknowledges that the initial number of shares issuable upon exercise of this Warrant was calculated based upon the representation of the Company that the number of shares of Common Stock outstanding as of the Closing Date (excluding the Issuable Warrant Shares) was 11,925,416 shares. If for any reason it shall hereafter be determined by the holder of this Warrant that the actual number of shares of Common Stock outstanding as of the Closing Date was different from the foregoing, such holder may notify the Company of such determination and if ...