WARRANT AGREEMENT
Dated as of [●], 2025
by and between
ARDENT APEX HOLDINGS INC.
a Delaware corporation
("Company" or "Issuer")
and
CRESTLINE MEZZANINE PARTNERS II LP
a Delaware limited partnership
("Holder" or "Warrantholder")
Issued in connection with that certain Subordinated Note Purchase Agreement dated as of the date hereof, by and between Ardent Apex Holdings Inc. and Crestline Mezzanine Partners II LP, for $300,000,000 aggregate principal amount of subordinated notes
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RECITALS
WHEREAS, Ardent Apex Holdings Inc. (the "Company") is a corporation duly organized and existing under the laws of the State of Delaware, incorporated on March 5, 2025, with its principal office located at 399 Park Avenue, 42nd Floor, New York, New York 10022 (the address of its parent sponsor, Ardent Capital Partners III LP), the Company serving as the intermediate holding company formed for the purpose of effecting the Acquisition (as defined herein), and having been assigned Employer Identification Number 93-2178435;
WHEREAS, the Company is the direct parent of Ardent Apex Merger Sub Inc., a corporation duly organized and existing under the laws of the State of Delaware, incorporated on March 7, 2025 (Employer Identification Number 93-2178502), formed solely for the purpose of effecting a reverse triangular merger (the "Merger") with Luminex Systems Holdings Inc. (the "Target"), a corporation duly organized and existing under the laws of the State of Delaware (Employer Identification Number 86-2547193), pursuant to that certain Agreement and Plan of Merger dated as of March 24, 2025 (as the same may be amended, supplemented, or otherwise modified from time to time, the "Merger Agreement"), among the Company, Ardent Apex Merger Sub Inc. ("Merger Sub"), and the Target, whereby Merger Sub will merge with and into the Target, with the Target surviving as a wholly owned subsidiary of the Company;
WHEREAS, Crestline Mezzanine Partners II LP (the "Holder") is a limited partnership duly organized and existing under the laws of the State of Delaware, with its principal office located at 1345 Avenue of the Americas, 32nd Floor, New York, New York 10105, the general partner of the Holder being Crestline Mezzanine GP II LLC, a Delaware limited liability company;
WHEREAS, pursuant to that certain Subordinated Note Purchase Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Note Purchase Agreement"), by and between the Company and the Holder, the Holder has agreed to purchase from the Company Three Hundred Million Dollars ($300,000,000) in aggregate principal amount of subordinated notes of the Company (the "Subordinated Notes"), bearing interest at a rate of 11.5% per annum payable in kind (with a cash pay toggle), having a maturity date of eight (8) years from the date of issuance, and contractually subordinated to the Senior Secured Credit Facility (as defined below) provided by certain lenders under the administrative agency of Stonebridge Credit Partners LLC;
WHEREAS, as additional consideration for the Holder's commitment under the Note Purchase Agreement and the purchase of the Subordinated Notes, the Company has agreed to issue to the Holder warrants to purchase shares of Common Stock (as defined herein) of the Company representing two percent (2.0%) of the fully diluted equity of the Company as of the Closing Date (as defined in the Merger Agreement);
WHEREAS, the broader capital structure of the acquisition contemplated by the Merger Agreement consists of the following: (i) an equity contribution by Ardent Capital Partners III LP in the amount of Six Hundred Ninety-Five Million Nine Hundred Eighty Thousand Dollars ($695,980,000) pursuant to the Equity Commitment Letter (as defined herein); (ii) management rollover equity in the amount of Four Hundred Five Million Twenty Thousand Dollars ($405,020,000); (iii) co-investment equity from Northvale Sovereign Holdings Ltd. in the amount of Two Hundred Million Dollars ($200,000,000) and from Summit Ridge Capital Partners LP in the amount of One Hundred Million Dollars ($100,000,000); (iv) the Subordinated Notes in the aggregate principal amount of Three Hundred Million Dollars ($300,000,000); and (v) a Senior Secured Credit Facility in the aggregate amount of One Billion Four Hundred Million Dollars ($1,400,000,000), consisting of a Term Loan B facility in the amount of One Billion Two Hundred Million Dollars ($1,200,000,000) and a Revolving Credit Facility in the amount of Two Hundred Million Dollars ($200,000,000); and
WHEREAS, the Warrants (as defined herein) are being issued in a transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof, and the Holder is an "accredited investor" as defined in Regulation D promulgated under the Securities Act.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the foregoing, any Person that owns, directly or indirectly, more than fifty percent (50%) of the voting equity interests of another Person shall be deemed to "control" such other Person.
"Agreement" means this Warrant Agreement, including all Exhibits and Schedules hereto, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Black-Drubeck Value" means the value of the Warrants as determined in accordance with the Black-Drubeck option pricing model, using the following assumptions: (a) a volatility equal to the greater of (i) thirty-five percent (35%) and (ii) the implied equity volatility of comparable publicly traded companies as of the applicable determination date, as reasonably determined by the independent appraiser; (b) a risk-free rate equal to the yield on United States Treasury securities having a maturity closest to the remaining term of the Warrants as of the applicable determination date; (c) the remaining term of the Warrants as of the applicable determination date; and (d) the then-current Exercise Price and the then-current fair market value per share of Common Stock.
"Board" or "Board of Directors" means the board of directors of the Company, as constituted from time to time.
"Business Day" means any day other than a Saturday, Sunday, or a day on which banking institutions in New York, New York are authorized or required by law, regulation, or executive order to close.
"Call Notice" has the meaning set forth in Section 8.2.
"Call Price" has the meaning set forth in Section 8.2.
"Closing Date" means the date of the closing of the transactions contemplated by the Merger Agreement, which date is estimated to occur during the period of July through August 2025.
"Common Stock" means the shares of common stock, par value $0.01 per share, of the Company, and any securities into which such shares may hereafter be reclassified, changed, converted, or exchanged.
"Company" means Ardent Apex Holdings Inc., a Delaware corporation (Employer Identification Number 93-2178435), and any successor thereto that assumes the obligations of the Company under this Agreement in accordance with Article V hereof.
"Dilutive Issuance" has the meaning set forth in Section 5.2.
"Equity Commitment Letter" means the equity commitment letter, dated as of March 24, 2025, from Ardent Capital Partners III LP to the Company, pursuant to which Ardent Capital Partners III LP has committed to contribute Six Hundred Ninety-Five Million Nine Hundred Eighty Thousand Dollars ($695,980,000) in cash equity to the Company on the Closing Date.
"Exempt Issuances" has the meaning set forth in Section 5.2.
"Exercise Notice" means a notice of exercise in the form attached hereto as Exhibit B.
"Exercise Price" means the per-share price at which Warrant Shares may be purchased upon exercise of the Warrants, as initially set forth in Section 2.2 and as adjusted from time to time in accordance with Article V.
"Expiration Date" means the tenth (10th) anniversary of the Issue Date; provided that if such date is not a Business Day, then the Expiration Date shall be the immediately preceding Business Day.
"FMV" or "Fair Market Value" means, (a) with respect to a share of Common Stock, the fair market value of one share of Common Stock as of the applicable date of determination, as determined by the Board in good faith, or, if disputed by the Holder, as determined by an independent appraiser mutually selected by the Company and the Holder in accordance with the procedures set forth in Section 3.2, and (b) with respect to the Warrants, the fair market value of the Warrants as of the applicable date of determination, determined in accordance with Article VIII.
"Fully Diluted Basis" means, as of any date of determination, all issued and outstanding shares of Common Stock, plus all shares of Common Stock issuable upon the exercise, conversion, or exchange of all outstanding options, warrants (including the Warrants issued hereunder), convertible securities, and other rights to acquire shares of Common Stock, in each case without regard to whether such options, warrants, convertible securities, or other rights are then vested, exercisable, or subject to any conditions to exercise or conversion. For the avoidance of doubt, shares of Common Stock issuable under the Management Equity Incentive Plan (whether or not granted, vested, or exercisable) shall be included in the calculation of "Fully Diluted Basis" to the extent constituting part of the Reserved Pool.
"Fundamental Transaction" has the meaning set forth in Section 5.3.
"Holder" means Crestline Mezzanine Partners II LP, a Delaware limited partnership, or any Permitted Transferee to whom the Warrants have been duly transferred in accordance with Article IV.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of the Closing Date, by and between Stonebridge Credit Partners LLC (as senior representative on behalf of the lenders under the Senior Secured Credit Facility) and Crestline Mezzanine Partners II LP (as subordinated representative on behalf of the holders of the Subordinated Notes), as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"IPO" means the initial underwritten public offering of shares of Common Stock (or equity securities of a successor entity) pursuant to an effective registration statement under the Securities Act, resulting in the listing of such shares on a national securities exchange.
"Issue Date" means the Closing Date.
"Management Equity Incentive Plan" means the equity incentive plan adopted or to be adopted by the Board for the benefit of officers, directors, employees, and consultants of the Company and its subsidiaries, as the same may be amended from time to time.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of March 24, 2025, among Ardent Apex Holdings Inc., Ardent Apex Merger Sub Inc., and Luminex Systems Holdings Inc., as the same may be amended, supplemented, or otherwise modified from time to time.
"Merger Sub" means Ardent Apex Merger Sub Inc., a Delaware corporation (Employer Identification Number 93-2178502), a wholly owned subsidiary of the Company formed for the purpose of effecting the Merger.
"Net Exercise" has the meaning set forth in Section 3.2.
"Note Purchase Agreement" means the Subordinated Note Purchase Agreement, dated as of the date hereof, by and between the Company and the Holder, providing for the issuance and sale by the Company, and the purchase by the Holder, of Three Hundred Million Dollars ($300,000,000) aggregate principal amount of Subordinated Notes, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Permitted Transferee" means (a) any Affiliate of the Holder, (b) any fund, account, or investment vehicle that is managed, advised, or sub-advised by Crestline Mezzanine GP II LLC or any of its Affiliates, (c) any successor fund or parallel fund managed by the same general partner as the Holder or any Affiliate of such general partner, and (d) any limited partner of the Holder to which Warrants are distributed in connection with the dissolution or winding up of the Holder, in each case that agrees in writing to be bound by the terms of this Agreement.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, governmental authority, or any other entity or body.
"Put Event" has the meaning set forth in Section 8.1.
"Put Notice" has the meaning set forth in Section 8.1.
"Put Price" has the meaning set forth in Section 8.1.
"Registration Rights Agreement" means the Registration Rights Agreement among the Company and its equity holders, as the same may be executed and delivered on or about the Closing Date.
"Reserved Pool" has the meaning set forth in Section 5.2.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Senior Secured Credit Facility" means the credit facility in the aggregate amount of One Billion Four Hundred Million Dollars ($1,400,000,000), consisting of (a) a Term Loan B facility in the principal amount of One Billion Two Hundred Million Dollars ($1,200,000,000), bearing interest at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR") plus four hundred seventy-five (475) basis points, with a maturity of seven (7) years from the Closing Date, and (b) a Revolving Credit Facility in the aggregate commitment amount of Two Hundred Million Dollars ($200,000,000), bearing interest at a rate per annum equal to SOFR plus four hundred twenty-five (425) basis points, with a maturity of five (5) years from the Closing Date, in each case among the Target (as the surviving corporation of the Merger and as borrower), the Company (as holdings), the lenders party thereto (including Stonebridge Credit Partners LLC, Birchwood Capital Finance LLC, and Ironvale Credit Fund III LP), and Stonebridge Credit Partners LLC (as administrative agent), as the same may be amended, restated, supplemented, refinanced, replaced, or otherwise modified from time to time.
"Stockholders Agreement" means the Stockholders Agreement of Ardent Apex Holdings Inc., dated as of the Closing Date, among Ardent Capital Partners III LP, the management rollover participants (including Dr. Stefan Kessler, Annelise Gruber, Dr. Markus Vogt, and other management and employee participants), Northvale Sovereign Holdings Ltd., Summit Ridge Capital Partners LP, and Crestline Mezzanine Partners II LP (upon exercise of the Warrants and issuance of Warrant Shares), as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Subordinated Notes" means the subordinated notes of the Company in the aggregate principal amount of Three Hundred Million Dollars ($300,000,000), bearing interest at a rate of 11.5% per annum (payable in kind, with a cash pay toggle), having a maturity date of eight (8) years from the date of issuance, and issued pursuant to the Note Purchase Agreement.
"Target" means Luminex Systems Holdings Inc., a Delaware corporation (Employer Identification Number 86-2547193).
"Warrant Certificate" means a certificate evidencing the Warrants issued to the Holder or any Permitted Transferee, substantially in the form attached hereto as Exhibit A.
"Warrant Shares" means the shares of Common Stock issuable upon exercise of the Warrants (as adjusted from time to time pursuant to Article V).
"Warrants" means warrants to purchase shares of Common Stock representing two percent (2.0%) of the fully diluted equity of the Company on the Closing Date, as issued pursuant to this Agreement and evidenced by the Warrant Certificate, and as may be adjusted from time to time pursuant to Article V.
Section 1.2 — Rules of Construction
(a) The headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(b) Whenever the context requires, the gender of all words used in this Agreement shall include the masculine, feminine, and neuter, and the singular form of words shall include the plural, and vice versa.
(c) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement that they follow to the specific or similar items or matters immediately following them.
(d) All references herein to "Articles," "Sections," "Exhibits," and "Schedules" shall be deemed to refer to Articles, Sections, Exhibits, and Schedules of or to this Agreement, unless the context otherwise requires.
(e) All references to statutes and related regulations shall include any amendments thereof and any successor provisions thereto, unless the context otherwise requires.
(f) All references to "dollars" or "$" shall mean the lawful currency of the United States of America.
(g) The words "hereof," "herein," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(h) Any action required to be taken on a day that is not a Business Day shall be taken on the next succeeding Business Day, and if the last day of any period for the giving of any notice or the performance of any act required under this Agreement is not a Business Day, the period shall be extended to the next succeeding Business Day.
(i) The parties hereto have participated jointly in the negotiation and drafting of this Agreement, and in the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
Section 1.3 — Relationship to Other Agreements
This Agreement is entered into in connection with, and shall be read together with, the Note Purchase Agreement, the Intercreditor Agreement, and the Stockholders Agreement. To the extent that any provision of this Agreement conflicts with or is inconsistent with any provision of the Note Purchase Agreement with respect to the terms, conditions, exercise, adjustment, or other matters relating to the Warrants, the provisions of this Agreement shall control and prevail. To the extent that any provision of this Agreement conflicts with or is inconsistent with any provision of the Intercreditor Agreement with respect to lien priority, payment subordination, standstill, or enforcement rights, the provisions of the Intercreditor Agreement shall control and prevail, as further set forth in Article X. Upon exercise of the Warrants and issuance of Warrant Shares, the Holder's rights as a stockholder of the Company shall be further governed by the Stockholders Agreement, to which the Holder shall execute a joinder in accordance with Section 4.4.
ARTICLE II — ISSUANCE OF WARRANTS
Section 2.1 — Issuance
On the Issue Date, the Company shall issue to the Holder Warrants to purchase that number of shares of Common Stock equal to two percent (2.0%) of the Common Stock of the Company on a Fully Diluted Basis as of the Closing Date, after giving effect to the consummation of the Merger, the equity contributions by Ardent Capital Partners III LP, the management rollover, the co-investments by Northvale Sovereign Holdings Ltd. and Summit Ridge Capital Partners LP, and the reservation of shares under the Management Equity Incentive Plan. The specific number of Warrant Shares shall be as set forth in the Warrant Certificate delivered on the Issue Date, calculated in accordance with the capitalization table set forth on Schedule 1 attached hereto.
The Warrants are issued as additional consideration for the Holder's purchase of the Subordinated Notes pursuant to the Note Purchase Agreement. The parties acknowledge that the Warrants constitute an integral part of the consideration bargained for and received by the Holder in connection with the Holder's commitment to purchase, and purchase of, the Subordinated Notes.
The Warrants shall be evidenced by a Warrant Certificate in the form of Exhibit A, registered in the name of Crestline Mezzanine Partners II LP (or, if applicable, any Permitted Transferee to whom the Warrants have been duly transferred in accordance with Article IV). The Company shall deliver the original Warrant Certificate to the Holder on the Issue Date concurrently with the closing of the transactions contemplated by the Note Purchase Agreement and the Merger Agreement.
Section 2.2 — Exercise Price
The Exercise Price per Warrant Share shall be $[●] per share, which amount shall be equal to the fair market value per share of Common Stock on the Closing Date, as determined by the Board in good faith. Such determination shall be calculated based on the implied equity value of the Company at closing, taking into account the total equity capitalization contributed to or rolled into the Company in connection with the Merger, including without limitation: (a) the equity contribution by Ardent Capital Partners III LP in the amount of $695,980,000; (b) the management rollover equity in the amount of $405,020,000; (c) the co-investment equity from Northvale Sovereign Holdings Ltd. in the amount of $200,000,000 and from Summit Ridge Capital Partners LP in the amount of $100,000,000, resulting in an aggregate equity capitalization of $1,401,000,000; and (d) such additional amounts, if any, as may be attributable to the value of the Subordinated Notes and the Warrants. The aggregate equity value of the Target implied by the Merger Agreement is $2,800,000,000 on the basis of 140,000,000 fully diluted shares of the Target.
The Exercise Price is subject to adjustment from time to time as set forth in Article V of this Agreement.
Section 2.3 — Term
The Warrants shall be exercisable at any time and from time to time on or after the Issue Date and prior to 5:00 p.m., New York City time, on the Expiration Date (the tenth (10th) anniversary of the Issue Date), subject to the terms and conditions set forth in this Agreement. The Warrants may be exercised in whole or in part at any time during such exercise period, subject to the provisions of Article III.
Any Warrants that are not exercised, repurchased pursuant to Article VIII, or otherwise terminated prior to 5:00 p.m., New York City time, on the Expiration Date shall automatically expire and become null and void, and neither the Company nor the Holder shall have any further rights or obligations with respect to such expired Warrants, except as expressly provided in Section 11.2.
Section 2.4 — No Fractional Shares
No fractional Warrant Shares shall be issued upon the exercise of any Warrants. If the exercise of Warrants would result in the issuance of a fractional share of Common Stock, the Company shall, in lieu of issuing such fractional share, pay to the Holder an amount in cash (rounded to the nearest cent) equal to (a) such fraction, multiplied by (b) the Fair Market Value per Warrant Share as of the date of exercise. Such cash payment shall be made concurrently with the delivery of the Warrant Shares issuable upon such exercise and shall be subject to the subordination provisions of Article X.
ARTICLE III — EXERCISE OF WARRANTS
Section 3.1 — Method of Exercise
The Holder may exercise the Warrants, in whole or in part, at any time and from time to time during the exercise period set forth in Section 2.3, by delivering to the Company at its principal office (or such other address as the Company may designate in writing to the Holder):
(a) a duly executed Exercise Notice, substantially in the form of Exhibit B attached hereto, specifying the number of Warrants to be exercised and the number of Warrant Shares to be purchased;
(b) the Warrant Certificate representing the Warrants being exercised (or, in the case of a lost, stolen, mutilated, or destroyed Warrant Certificate, an affidavit and indemnity or indemnity bond as provided in Section 7.5); and
(c) payment of the aggregate Exercise Price for the number of Warrant Shares being purchased, payable by one or more of the following methods:
(i) wire transfer of immediately available funds in United States dollars to an account designated by the Company in writing;
(ii) certified or official bank check payable to the order of the Company; or
(iii) Net Exercise (cashless exercise) as provided in Section 3.2 of this Agreement.
A Warrant shall be deemed to have been exercised, and the Warrant Shares issuable upon such exercise shall be deemed to have been issued, as of the close of business on the date on which the Company shall have received all of the items specified in clauses (a) through (c) above (the "Exercise Date"). The Holder shall be treated for all purposes as the record holder of the applicable Warrant Shares as of the close of business on the Exercise Date.
Section 3.2 — Net Exercise (Cashless Exercise)
In lieu of making cash payment of the aggregate Exercise Price pursuant to Section 3.1(c)(i) or (ii), the Holder may elect a cashless exercise (a "Net Exercise") by so indicating on the Exercise Notice delivered to the Company. Upon a valid election of Net Exercise, the Company shall issue to the Holder a net number of Warrant Shares determined in accordance with the following formula:
Net Shares = (Warrant Shares × (FMV − Exercise Price)) ÷ FMV
Where:
"Net Shares" means the number of shares of Common Stock to be issued to the Holder upon such Net Exercise;
"Warrant Shares" means the total number of shares of Common Stock for which the Warrants are being exercised (as set forth in the Exercise Notice);
"FMV" means the Fair Market Value per share of Common Stock as of the Exercise Date, as determined by the Board in good faith; and
"Exercise Price" means the then-current Exercise Price per Warrant Share (as adjusted pursuant to Article V).
If the Holder disputes the Board's determination of FMV for purposes of a Net Exercise, the Fair Market Value shall be determined by an independent appraiser of national reputation mutually agreed upon by the Company and the Holder. If the Company and the Holder are unable to agree upon an independent appraiser within ten (10) Business Days following the Holder's written notice of dispute, each of the Company and the Holder shall, within five (5) Business Days thereafter, select one independent appraiser, and the two appraisers so selected shall, within ten (10) Business Days of their selection, mutually select a third independent appraiser, whose determination of Fair Market Value shall be final, conclusive, and binding upon the parties. The costs of any such independent appraisal shall be borne equally by the Company and the Holder.
In the event of a Net Exercise, the Holder shall surrender to the Company the Warrant Certificate representing the Warrants being exercised, and the Company shall, within the time period specified in Section 3.3, deliver to the Holder (a) a stock certificate or evidence of book-entry credit representing the Net Shares and (b) if fewer than all Warrants are exercised, a new Warrant Certificate for the unexercised balance. No cash payment shall be required from the Holder in connection with a Net Exercise, and the portion of the Warrant Shares not delivered to the Holder in a Net Exercise shall be deemed to have been retained by the Company in satisfaction of the aggregate Exercise Price.
Section 3.3 — Issuance of Warrant Shares
Within five (5) Business Days following receipt of a valid Exercise Notice and the related Warrant Certificate (or affidavit and indemnity in lieu thereof) and payment of the aggregate Exercise Price (or valid election of Net Exercise), the Company shall:
(a) cause to be delivered to the Holder a stock certificate or certificates, or evidence of book-entry credit, representing the number of Warrant Shares (or Net Shares, as applicable) to be issued upon such exercise, registered in the name of the Holder or the Holder's designee as specified in the Exercise Notice; and
(b) if fewer than all of the Warrants evidenced by the surrendered Warrant Certificate are being exercised, cause to be delivered to the Holder a new Warrant Certificate representing the number of Warrants that remain unexercised, which new Warrant Certificate shall in all other respects be identical to the surrendered Warrant Certificate.
All Warrant Shares issued upon the exercise of Warrants in accordance with this Article III shall be duly authorized, validly issued, fully paid, and nonassessable, and free and clear of all taxes, liens, charges, and encumbrances with respect to the issuance thereof (other than restrictions imposed by this Agreement, the Stockholders Agreement, and applicable securities laws). The Company shall pay all documentary, stamp, transfer, or other transactional taxes attributable to the issuance or delivery of the Warrant Shares; provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer of the Warrants or the Warrant Shares to any Person other than the Holder.
Section 3.4 — No Rights as Stockholder Until Exercise
The Holder shall not, by virtue of holding the Warrants, be deemed a stockholder of the Company, and shall not have any rights of a stockholder of the Company (including, without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights) with respect to the Warrant Shares until such time as the Warrants are validly exercised and Warrant Shares are issued to the Holder in accordance with the terms of this Agreement. Notwithstanding the foregoing, nothing in this Section 3.4 shall limit or affect the Holder's rights under this Agreement to receive anti-dilution adjustments pursuant to Article V, information rights pursuant to Section 7.1, board observer rights pursuant to Section 7.2, preemptive rights pursuant to Section 7.3, or any other rights expressly granted to the Holder hereunder.
Section 3.5 — Reservation of Shares
The Company shall at all times reserve and keep available, out of its authorized but unissued shares of Common Stock (or out of shares of Common Stock held in treasury), a sufficient number of shares of Common Stock to permit the full exercise of all outstanding Warrants (as adjusted from time to time pursuant to Article V). If at any time the number of authorized but unissued shares of Common Stock (together with any shares of Common Stock held in treasury) shall be insufficient to permit the full exercise of all outstanding Warrants, the Company shall promptly take all corporate action necessary to increase the number of authorized shares of Common Stock to a number sufficient to permit such exercise, including, without limitation, using its commercially reasonable efforts to obtain the requisite stockholder approval to amend the Company's Amended and Restated Certificate of Incorporation to increase the authorized number of shares of Common Stock.
The Company covenants that all Warrant Shares that may be issued upon exercise of the Warrants shall, upon issuance and receipt of the Exercise Price therefor, be duly authorized, validly issued, fully paid, and nonassessable. The Company further covenants that the issuance of the Warrants shall constitute full authority to the Company's officers responsible for the issuance of shares of Common Stock to issue such shares upon proper exercise of the Warrants.
ARTICLE IV — TRANSFER AND ASSIGNMENT
Section 4.1 — Restrictions on Transfer
The Warrants and Warrant Shares have not been registered under the Securities Act or any state securities laws and may not be offered, sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of except in compliance with the Securities Act and all applicable state securities laws. No transfer of the Warrants or Warrant Shares shall be effective unless and until such transfer is made:
(a) to a Permitted Transferee in accordance with Section 4.2;
(b) in a transaction exempt from the registration requirements of the Securities Act, as evidenced by an opinion of counsel to the transferor reasonably satisfactory to the Company (unless transferred to a Permitted Transferee); or
(c) pursuant to an effective registration statement under the Securities Act.
Each Warrant Certificate and each stock certificate (or book-entry record) representing Warrant Shares shall bear the following legend (or a legend substantially similar thereto), until such time as such securities have been registered under the Securities Act or transferred in a transaction in which such legend is no longer required under applicable law:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) IN A TRANSACTION EXEMPT FROM SUCH REGISTRATION REQUIREMENTS. THE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE WARRANT AGREEMENT DATED AS OF [●], 2025, AND THE STOCKHOLDERS AGREEMENT DATED AS OF [●], 2025, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY."
Section 4.2 — Permitted Transfers
Notwithstanding the restrictions set forth in Section 4.1, the Holder may transfer all or any portion of the Warrants to any Permitted Transferee without the prior written consent of the Company, subject to satisfaction of each of the following conditions:
(a) the Holder shall deliver written notice to the Company at least five (5) Business Days prior to such transfer, identifying the Permitted Transferee and the number of Warrants to be transferred;
(b) the Permitted Transferee shall execute and deliver to the Company a joinder agreement to this Agreement, pursuant to which such Permitted Transferee shall agree to be bound by all of the terms and conditions of this Agreement as a "Holder" hereunder;
(c) the transfer shall comply with all applicable securities laws; and
(d) the Holder shall deliver to the Company a written instrument of assignment, substantially in the form of Exhibit C attached hereto, duly executed by the Holder and the Permitted Transferee.
Upon satisfaction of all of the foregoing conditions, the Company shall register the transfer on its books and records and shall issue a new Warrant Certificate in the name of the Permitted Transferee for the number of Warrants transferred and, if applicable, a new Warrant Certificate in the name of the Holder for any Warrants retained by the Holder.
Section 4.3 — Conditions to Transfer
As a condition to any transfer of the Warrants (whether to a Permitted Transferee or otherwise), the transferor shall deliver to the Company:
(a) a written instrument of assignment, substantially in the form of Exhibit C attached hereto, duly executed by the transferor and the proposed transferee; and
(b) unless the transfer is to a Permitted Transferee, an opinion of counsel to the transferor, which counsel and opinion shall be reasonably satisfactory to the Company, to the effect that such transfer is exempt from the registration requirements of the Securities Act and any applicable state securities laws.
The Company may refuse to register any transfer that does not comply with the foregoing requirements and the other applicable provisions of this Article IV. The Company shall not be required to recognize any transfer of the Warrants unless and until the conditions set forth in this Section 4.3 and, if applicable, Section 4.2 have been satisfied.
Section 4.4 — Joinder to Stockholders Agreement
Upon exercise of any Warrants and issuance of Warrant Shares, the Holder (or any Permitted Transferee that has received Warrants pursuant to Section 4.2 and subsequently exercises such Warrants) shall, as a condition to the issuance of Warrant Shares, execute and deliver a joinder agreement to the Stockholders Agreement of Ardent Apex Holdings Inc., and shall thereafter be bound by all of the terms and conditions thereof applicable to the Holder as a stockholder of the Company, including, without limitation, transfer restrictions, tag-along rights, drag-along rights, information rights, and such other rights and obligations as are set forth in the Stockholders Agreement. The Company shall deliver a form of joinder agreement to the Holder concurrently with the issuance of Warrant Shares.
ARTICLE V — ANTI-DILUTION ADJUSTMENTS
Section 5.1 — Stock Dividends, Splits, and Combinations
If the Company at any time after the Issue Date effects any of the following events with respect to the Common Stock:
(a) pays or makes a dividend or other distribution payable in additional shares of Common Stock;
(b) subdivides (by stock split, recapitalization, or otherwise) the outstanding shares of Common Stock into a greater number of shares;
(c) combines (by reverse stock split, consolidation, or otherwise) the outstanding shares of Common Stock into a smaller number of shares; or
(d) issues shares of Common Stock by reclassification of Common Stock (including any such reclassification in connection with a merger or consolidation in which the Company is the surviving corporation),
then, in each such case, the number of Warrant Shares issuable upon exercise of the Warrants shall be proportionally adjusted such that the Holder's economic interest in the Company as represented by the Warrants is preserved at two percent (2.0%) of the Fully Diluted Basis of the Company as of the original Issue Date (subject to subsequent dilution events described in this Article V), and the Exercise Price shall be proportionally adjusted (increased or decreased, as the case may be) so that the aggregate Exercise Price payable upon full exercise of the Warrants remains unchanged. Any adjustment made pursuant to this Section 5.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution or immediately after the effective date of such subdivision, combination, or reclassification, as the case may be.
Section 5.2 — Issuance of Additional Common Stock Below Fair Market Value (Weighted Average Anti-Dilution)
If the Company issues or sells additional shares of Common Stock (or securities convertible into, exercisable for, or exchangeable for Common Stock) at a price per share (or at an effective conversion, exercise, or exchange price per share) less than the then-current Fair Market Value per share of Common Stock immediately prior to such issuance or sale (a "Dilutive Issuance"), then the Exercise Price shall be adjusted downward in accordance with the following broad-based weighted average formula:
Adjusted Exercise Price = EP × (OS + (C ÷ EP)) ÷ (OS + AS)
Where:
"EP" means the Exercise Price in effect immediately prior to the Dilutive Issuance;
"OS" means the number of shares of Common Stock outstanding on a Fully Diluted Basis immediately prior to the Dilutive Issuance;
"C" means the aggregate consideration received (or deemed received) by the Company in connection with the Dilutive Issuance; and
"AS" means the number of additional shares of Common Stock issued (or issuable upon conversion, exercise, or exchange of such securities) in the Dilutive Issuance.
Upon any adjustment to the Exercise Price pursuant to this Section 5.2, the number of Warrant Shares issuable upon exercise of the Warrants shall be correspondingly adjusted so that the aggregate Exercise Price payable upon full exercise of the Warrants remains unchanged (i.e., the number of Warrant Shares shall equal the aggregate Exercise Price prior to such adjustment divided by the adjusted Exercise Price, rounded down to the nearest whole share, with cash paid in lieu of any fractional share pursuant to Section 2.4).
Notwithstanding the foregoing, no adjustment to the Exercise Price or the number of Warrant Shares shall be made in connection with any of the following issuances (each, an "Exempt Issuance"):
(a) shares of Common Stock (or options, restricted stock units, or other equity awards) issued or issuable under the Management Equity Incentive Plan, up to an aggregate number of shares not to exceed [●]% of the Fully Diluted Equity of the Company as of the Closing Date (the "Reserved Pool"); provided that any issuances in excess of the Reserved Pool shall be subject to adjustment under this Section 5.2;
(b) shares of Common Stock issued upon the exercise, conversion, or exchange of options, warrants (including the Warrants issued hereunder), convertible securities, or other rights to acquire Common Stock that are outstanding as of the Issue Date and listed on Schedule 1 hereto;
(c) shares of Common Stock issued in connection with a bona fide arm's-length acquisition of a business or assets approved by the Board, including acquisitions structured as mergers, consolidations, or asset purchases; and
(d) shares of Common Stock issued in connection with an IPO.
For purposes of determining the consideration received in any Dilutive Issuance: (i) in the case of cash consideration, the amount of cash received by the Company; (ii) in the case of non-cash consideration, the Fair Market Value thereof as determined by the Board in good faith; and (iii) in the case of convertible or exercisable securities, the aggregate consideration received for such securities plus the additional consideration, if any, receivable upon conversion, exercise, or exchange thereof.
Section 5.3 — Reorganization, Merger, Consolidation, or Sale
If, at any time while the Warrants are outstanding, the Company is a party to or is the subject of any merger, consolidation, recapitalization, sale of all or substantially all of the Company's assets, statutory share exchange, tender offer, or any other similar fundamental transaction (each, a "Fundamental Transaction"), then, in connection with such Fundamental Transaction:
(a) the Holder shall be entitled to receive, upon exercise of the Warrants at any time after the consummation of such Fundamental Transaction, the kind and amount of consideration (whether cash, securities, or other property) that the Holder would have been entitled to receive had the Holder exercised the Warrants in full immediately prior to the effective time of such Fundamental Transaction, taking into account any anti-dilution adjustments to the Exercise Price and the number of Warrant Shares that would have been in effect immediately prior thereto; and
(b) the Company shall not consummate or permit to be consummated any Fundamental Transaction unless (i) the successor entity resulting from such Fundamental Transaction (if other than the Company) shall assume in writing all of the obligations of the Company under this Agreement, in form and substance reasonably satisfactory to the Holder, prior to the consummation of such Fundamental Transaction, and (ii) the Holder shall receive, at or prior to the effective time of such Fundamental Transaction, written notice of the terms and conditions of such Fundamental Transaction and the manner in which the Holder's rights under this Agreement will be treated therein.
The provisions of this Section 5.3 shall apply equally to successive Fundamental Transactions and shall be applied after any adjustment required by Sections 5.1, 5.2, or 5.4 hereof.
Section 5.4 — Distributions and Special Dividends
If, at any time while the Warrants are outstanding, the Company declares or pays to the holders of Common Stock a cash dividend or distribution (other than regular cash dividends paid from operating income in the ordinary course of the Company's business as approved by the Board), the Exercise Price shall be reduced (but not below zero) by the per-share amount of such dividend or distribution. For the avoidance of doubt, "regular cash dividends paid from operating income in the ordinary course" shall not include any special dividends, liquidating distributions, return-of-capital distributions, or recapitalization dividends. Any adjustment made pursuant to this Section 5.4 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution.
Section 5.5 — Notices of Adjustment
Whenever the Exercise Price or the number of Warrant Shares issuable upon exercise of the Warrants is adjusted pursuant to this Article V, the Company shall, within ten (10) Business Days after the occurrence of the event giving rise to such adjustment, deliver to the Holder a certificate, signed by the Chief Financial Officer of the Company (or, if no Chief Financial Officer has been appointed, by the President or any other senior officer of the Company authorized by the Board), setting forth in reasonable detail:
(a) the adjusted Exercise Price and the adjusted number of Warrant Shares issuable upon exercise of the Warrants;
(b) the facts requiring such adjustment and the basis upon which such adjustment was calculated; and
(c) the computation of the adjusted Exercise Price and the adjusted number of Warrant Shares, with reasonable supporting detail.
The Company shall, upon the written request of the Holder, furnish to the Holder, at any time and from time to time, a statement setting forth the Exercise Price then in effect and the number of Warrant Shares issuable upon exercise of the Warrants.
Section 5.6 — No Impairment
The Company shall not, by amendment to its Amended and Restated Certificate of Incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it under this Article V. The Company shall at all times in good faith assist in the carrying out of all of the provisions of this Article V and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder under this Article V against impairment.
ARTICLE VI — REGISTRATION RIGHTS
Section 6.1 — Piggyback Registration Rights
If at any time after the Issue Date the Company proposes to register any shares of Common Stock under the Securities Act (whether for its own account or for the account of one or more stockholders of the Company), including, without limitation, in connection with an IPO or any subsequent public offering (other than registrations on Form S-4 or Form S-8 or any successor or similar forms), the Company shall:
(a) give the Holder written notice of its intention to effect such registration at least twenty (20) Business Days prior to the anticipated filing date of such registration statement, which notice shall specify the number of shares proposed to be registered, the proposed offering price (if then determined), and the intended method of distribution;
(b) include in such registration (and any related qualification under applicable state securities laws and any underwritten offering), at the Holder's written election delivered to the Company within ten (10) Business Days following receipt of such notice, all or such portion of the Warrant Shares (to the extent then issued upon exercise of the Warrants) as the Holder may request, subject to the limitations set forth in this Section 6.1.
Notwithstanding the foregoing, if the managing underwriter of any underwritten offering advises the Company in writing that the number of shares to be included in such registration exceeds the number that can be sold in such offering without materially and adversely affecting the price, timing, or distribution of the shares offered, the number of shares to be included in such registration shall be reduced in the following priority: (i) first, the shares proposed to be sold by the Company; (ii) second, the shares proposed to be sold by stockholders exercising demand registration rights (pro rata among such stockholders); and (iii) third, the shares proposed to be sold by all other holders exercising piggyback registration rights (including the Holder), allocated pro rata among such holders based on the number of shares each such holder has requested to include.
The Holder's rights under this Section 6.1 are in addition to, and not in limitation of, any rights the Holder may have under the Registration Rights Agreement.
Section 6.2 — Demand Registration Rights
At any time after the earlier of (a) the fifth (5th) anniversary of the Issue Date and (b) one hundred eighty (180) days following the consummation of an IPO, the Holder shall have the right, by delivery of written notice to the Company (a "Demand Notice"), to require the Company to file a registration statement under the Securities Act covering the resale of all or a portion of the Warrant Shares then held by the Holder, subject to the following limitations:
(a) Minimum Offering Size. The Holder may not exercise its demand registration right unless the aggregate anticipated gross proceeds of such offering (based on the then-current Fair Market Value of the Warrant Shares to be included) would equal or exceed Fifty Million Dollars ($50,000,000).
(b) Maximum Number of Demands. The Holder shall be entitled to a maximum of two (2) demand registrations in the aggregate under this Section 6.2. A request shall not count as a demand registration if (i) the registration statement relating thereto does not become effective, (ii) the offering is not consummated due to market conditions, or (iii) the Holder's Warrant Shares are cut back by the managing underwriter to less than seventy-five percent (75%) of the number of shares requested by the Holder.
(c) Timing. The Company shall use its commercially reasonable efforts to file such registration statement within sixty (60) days following receipt of a Demand Notice and to cause such registration statement to become effective as promptly as practicable thereafter. The Company shall keep such registration statement effective for a period of not less than one hundred eighty (180) days (or such shorter period as may be necessary to complete the distribution of the Warrant Shares covered thereby).
Section 6.3 — Registration Expenses
The Company shall bear all expenses incurred in connection with any registration pursuant to Sections 6.1 or 6.2, including, without limitation, all registration and filing fees, listing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and disbursements of the Company's counsel and the Company's independent public accountants (the "Registration Expenses"). Notwithstanding the foregoing, the Company shall not be responsible for (a) any underwriting discounts, selling commissions, or similar fees attributable to the sale of the Warrant Shares by the Holder, (b) the fees and disbursements of legal counsel retained by the Holder in connection with such registration, or (c) any transfer taxes applicable to the sale of the Warrant Shares by the Holder.
Section 6.4 — Indemnification in Connection with Registration
In connection with any registration statement filed pursuant to this Article VI:
(a) Company Indemnification. The Company shall indemnify and hold harmless the Holder, its Affiliates, and each of their respective officers, directors, partners, members, managers, employees, agents, and representatives, and each Person who controls any of the foregoing within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended, from and against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees and expenses) arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement (or any amendment or supplement thereto) or any prospectus (or any amendment or supplement thereto), or (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Company shall not be liable to the extent that such untrue statement or omission is based upon information furnished in writing by the Holder specifically for inclusion in such registration statement.
(b) Holder Indemnification. The Holder shall indemnify and hold harmless the Company, its officers, directors, and each Person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended, from and against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees and expenses) arising out of or based upon any untrue statement or alleged untrue statement of a material fact, or any omission or alleged omission of a material fact, in each case contained in such registration statement (or any amendment or supplement thereto) or any prospectus (or any amendment or supplement thereto) that was furnished in writing by the Holder specifically for inclusion therein; provided that the Holder's aggregate liability under this Section 6.4(b) shall not exceed the net proceeds received by the Holder from the sale of the Warrant Shares pursuant to such registration statement.