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Exhibit 10.18
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WARRANT AGREEMENT
Dated August 24, 1999
by and between
WINSLOEW ESCROW CORP.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions.....................................................................1
Section 6. Appointment of Warrant Agent............................................................5
Section 3. Issuance of Warrants....................................................................5
3.1 Warrant Certificates...........................................................5
3.2 Temporary Global Warrants......................................................5
Section 4. Execution of Warrant Certificates.......................................................6
Section 5. Separation of Warrants..................................................................6
Section 6. Registration Rights.....................................................................6
6.1 Demand Registration After Public Equity Offering...............................6
6.2 Effective Registration.........................................................7
6.3 Restrictions on Sale by Holders................................................8
6.4 Underwritten Registrations.....................................................8
6.5 Expenses.......................................................................9
6.6 Priority in Demand Registration................................................9
6.7 Piggy-Back Registration........................................................9
6.8 Priority in Piggy-Back Registration...........................................10
6.9 Limitations, Conditions and Qualifications to Obligations Under Registration
Covenants.....................................................................11
6.10 Restrictions on Sale by the Company and Others................................12
6.11 Rule 144 and Rule 144A........................................................13
6.12 "Market Stand-Off" Agreement..................................................13
6.13 Registration Procedures.......................................................14
Section 7. Registration of Transfers and Exchanges................................................18
(a) Transfer and Exchange of Global Warrants......................................18
(b) Exchange of a Beneficial Interest in a Global Warrant for a Definitive
Warrant.......................................................................18
(c) Transfer and Exchange of Definitive Warrants..................................20
(d) Restrictions on Exchange or Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant..................................................21
(e) Restrictions on Transfer and Exchange of Global Warrants......................21
(f) Countersigning of Definitive Warrants in Absence of Depositary................21
(g) Legends.......................................................................22
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TABLE OF CONTENTS
(CONTINUED)
PAGE
(h) Cancellation of Global Warrant................................................23
(i) Obligations with Respect to Transfers and Exchanges of Warrants...............23
Section 8. Terms of Warrants; Exercise of Warrants................................................24
Section 9. Payment of Taxes.......................................................................26
Section 10. Mutilated or Missing Warrant Certificates..............................................26
Section 11. Reservation of Warrant Shares..........................................................26
Section 12. Obtaining Stock Exchange Listings......................................................27
Section 13. Adjustment of Exercise Price and Number of Warrant Shares Issuable.....................27
13.1 Stock Splits, Combinations, etc...............................................27
13.2 Reclassification, Combinations, Mergers, etc..................................27
(a) Issuance of Options or Convertible Securities.................................28
(b) Dividends and Distributions...................................................29
(c) Adjustment for Sale of Common Stock Below Current Market Price................29
(d) Current Market Price..........................................................30
(e) Certain Distributions.........................................................31
(f) Consideration Received........................................................31
(g) Deferral of Certain Adjustments...............................................31
(h) Changes in Options and Convertible Securities.................................32
(i) Expiration of Options and Convertible Securities..............................32
(j) Other Adjustments.............................................................32
(k) No Adjustment Required........................................................32
Section 14. Statement on Warrants..................................................................33
Section 15. Fractional Interest....................................................................33
Section 16. Notices to Warrant Holders.............................................................33
Section 17. Merger, Consolidation or Chance of Name of Warrant Agent...............................35
Section 18. Warrant Agent..........................................................................35
Section 19. Resignation and Removal of Warrant Agent; Appointment of Successor.....................37
Section 20. Registration...........................................................................37
Section 21. Reports................................................................................37
Section 22. Rule 144A..............................................................................38
Section 23. Notices to Company and Warrant Agent...................................................38
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 24. Supplements and Amendments.............................................................39
Section 25. Successors.............................................................................39
Section 26. Termination............................................................................39
Section 27. Governing Law..........................................................................39
Section 28. Benefits of This Agreement.............................................................39
Section 29. Counterparts...........................................................................40
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WARRANT AGREEMENT dated as of August 24, 1999 (this
"AGREEMENT") between WINSLOEW ESCROW CORP., a Florida corporation (together with
any and all successors thereto, the "COMPANY"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, a New York corporation, as warrant agent (together with any and
all successors appointed in accordance with this Agreement, the "WARRANT
AGENT"). Unless otherwise noted, capitalized terms have the meanings set forth
in Section 1 below.
WHEREAS, the Company proposes to issue 105,000 common stock
warrants, as hereinafter described (the "WARRANTS"), initially exercisable to
purchase an aggregate of 24,129 shares of Common Stock, in connection with an
offering of units (the "UNITS"), each Unit consisting of $1,000 principal amount
at maturity of the Company's 12 3/4% Senior Subordinated Notes due 2007 (thE
"NOtes") and one Warrant, each such Warrant entitling thE holder thereof to
purchase initially 0.2298 shares of Common Stock.
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance of Warrant Certificates and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, and for the purpose of defining the
respective rights and obligations of the Company, the Warrant Agent and the
Holders, the parties hereto agree as follows:
Section 1. Certain Definitions. (a) As used in this Agreement,
the following terms shall have the following respective meanings:
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"CONTROL" (including, with correlative meanings, the terms "CONTROLLING,"
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided,
however, that beneficial ownership of 10% or more of the Voting Equity Investors
(as defined in the Indenture) of a Person shall be deemed to be control.
"Board of Directors" means (1) in respect of a limited
liability company, the board of advisors of the Company; (2) in respect of a
corporation, the board of directors of the corporation, or any authorized
committee thereof; and (3) in respect of any other Person, the board or
committee of that Person serving a similar function.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (c) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (d) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cedel" means Cedel Bank, S.A.
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"Change of Control" means the occurrence of any of the
following: (a) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" or "group" (as such terms are used
in Section 13(d)(3) of the Exchange Act) (whether or not otherwise in compliance
with this Indenture) other than to a Permitted Holder; (b) the adoption of a
plan relating to the liquidation or dissolution of the Company; (c) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d)(3) of the Exchange Act), other than a Permitted
Holder or any underwriters in connection with an underwritten public offering,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), except that a person or group shall be deemed to
have "beneficial ownership" of all securities that the person or group has the
right to acquire, whether the right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition, directly or indirectly, of
more than 35% of the Voting Equity Interests of the Company (measured by voting
power rather than the number of shares); (d) the first day on which more than a
majority of the members of the Board of Directors of the Company are not
Continuing Directors; or (e) the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Equity Interests of such surviving or transferee Person
immediately after giving effect to such issuance.
"Common Stock" means the common stock, par value $.01 per
share, of the Company or its successors and any other class of series of common
equity equivalent shares of the Company or its successors.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors who (a) was a member of the Board of
Directors on the date of this Indenture or (b) was nominated for election to the
Board of Directors with the approval of a majority of the Continuing Directors
who were members of the Board of Directors at the time of such nomination or
election.
"Current Market Price" means the current price per share of
the Common Stock or the Warrant Shares, as applicable, as determined under
Section 15.6 hereof.
"Demand Registration" shall have the meaning ascribed in
Section 6.1(a).
"Drag Along Rights" shall have the meaning ascribed in Section
8.
"Drag Sale" shall have the meaning ascribed in Section 8.
"Effectiveness Date" means, with respect to any Registration
Statement, the 60th day after the filing date thereof.
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"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Escrow Agreement" means that certain Escrow, Control and
Security Agreement, dated as of August 24, 1999, by and among the Company and
American Stock Transfer & Trust Company, as Trustee, Escrow Agent and Securities
Intermediary.
"Escrowed Funds" means the $99,634,229 of net proceeds from
the sale of the Units and the $4,622,876 of additional proceeds from the Company
and its affiliates deposited into escrow with the Trustee under the Escrow
Agreement.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any successor act), and the rules and regulations thereunder.
"Excluded Securities" means shares of Common Stock or other
securities convertible or exchangeable into Common Stock issued (i) pursuant to
employee stock option ownership and/or other equity incentive plans, (ii) in
connection with mergers and acquisitions with non-affiliated third parties or
(iii) as compensation to directors in lieu of cash.
"Exercisability Date" means the date that is the earliest to
occur of (i) the Separation Date, (ii) the consummation of an underwritten
public offering of Capital Stock of the Company and (iii) the date that any
class of Capital Stock of the Company is listed on a national securities
exchange or authorized for quotation on the Nasdaq National Market or is
otherwise subject to registration under the Exchange Act.
"Exercise Event" means the earliest to occur of (i) the
completion of an underwritten public offering of Capital Stock of the Company,
(ii) a class of equity securities of the Company is listed on a national
securities exchange or authorized for quotation on the Nasdaq National Market or
is otherwise subject to registration under the Exchange Act, or (iii) the
Separation Date.
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be $.01 per share, subject to adjustment
from time to time pursuant to Section 15 hereof.
"Expiration Date" means August 15, 2007, unless extended
pursuant to Section 8 hereof.
"Holder" means a registered holder of Registrable Securities.
"Included Securities" has the meaning ascribed to such term in
Section 6.1(a) hereof.
"Indenture" means the indenture, dated as of August 24, 1999,
between the Company and American Stock Transfer & Trust Company, as trustee,
relating to the Notes.
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"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If any action
is required to be taken on a date that is a Legal Holiday, such action may be
taken on the next succeeding day that is not a Legal Holiday.
"Merger Agreement" means that certain Second Amended and
Restated Agreement and Plan of Merger, dated as of May 4, 1999, between Trivest
Furniture Corporation and WinsLoew Furniture, Inc.
"Notes" means the 12 3/4 Senior Subordinated Notes due 2007,
issued pursuant to the Indenture.
"Permitted Holder" means Trivest, Inc. and any Affiliate of
Trivest, Inc.
"Person" means any natural person, company, corporation,
partnership, government, agency or instrumentality of a government, or any other
entity.
"Piggy Back Registration" shall have the meaning ascribed in
Section 6.7.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means any of (i) the Warrant Shares
and (ii) any other securities issued or issuable with respect to any Registrable
Securities by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise, unless, in each case, such Warrant Shares have been
offered and sold to the Holder pursuant to an effective Registration Statement
under the Securities Act declared effective prior to the exercisability of the
Warrants and such securities may be sold to the public pursuant to Rule 144
without any restriction on the amount of securities which may be sold by such
Holder. As to any particular Registrable Securities held by a Holder, such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the offering of such securities by the Holder thereof
shall have been declared effective under the Securities Act and such securities
shall have been disposed of by such Holder pursuant to such Registration
Statement, (ii) such securities may at the time of determination be sold to the
public pursuant to Rule 144 without any restriction on the amount of securities
which may be sold by such Holder or Rule 144(k) (or any similar provision then
in force, but not Rule 144A) promulgated under the Securities Act without the
lapse of any further time or the satisfaction of any condition, (iii) such
securities shall have been otherwise transferred by such Holder and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(iv) such securities shall have ceased to be outstanding.
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"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all SEC and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees and expenses, fees and expenses of
compliance with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of counsel
for the Company and all independent certified public accountants and the fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities (but not including any underwriting discounts or commissions or
transfer taxes, if any, attributable to the sale of Registrable Securities by
Holders of such Registrable Securities). Registration Expenses shall not include
the fees and expenses of counsel for the Holders.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 24, 1999, by and among the Company and Bear,
Xxxxxxx & Co. Inc., First Union Capital Markets Corp. and BancBoston Xxxxxxxxx
Xxxxxxxx Inc., as such agreement may be amended, modified or supplemented from
time to time.
"Regulation S" means Regulation S under the Securities Act, as
such rules may be from time to time amended, revised or supplemented by the
Commission.
"Requisite Securities" means a number of Registrable
Securities equal to not less than 25% of the Registrable Securities then
outstanding held in the aggregate by all Holders; provided, however, that with
respect to any action to be taken at the request of the Holders of the
Registrable Securities prior to such time as the Warrants have expired pursuant
to the terms thereof and of the Warrant Agreement, each Warrant outstanding
shall be deemed to represent that number of Registrable Securities for which
such Warrant would be then exercisable.
"Regulation S Global Warrant" means a permanent global Warrant
in substantially the form of Exhibit A hereto, appropriately completed, and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in replacement for the Regulation S Global Warrant upon
expiration of the Restricted Period.
"Restricted Period" means the one year period after the date
of issuance of the Units.
"SEC" means the Securities and Exchange Commission, or any
successor agency or body performing substantially similar functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable
Securities in accordance with the provisions of Section 6.1 or 6.7.
"Separation Date" means earliest to occur of (i) February 21,
1999, (ii) the occurrence of an "Event of Default" under the Notes; (iii) an
Exercise Event, (iv) the date the Exchange Offer Registration Statement or the
Shelf Registration Statement is declared effective by the Commission (as
defined) or (v) such other date as Bear, Xxxxxxx & Co. Inc. shall determine in
its sole discretion.
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"Shelf Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Subsidiary" means, with respect to a Person, (a) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (b) any partnership (i) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person
or (ii) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Tag Along Notice" shall have the meaning ascribed in Section
7.
"Tag Along Rights" shall have the meaning ascribed in Section
7.
"Trivest, Inc." means Trivest, Inc., a Florida corporation.
"Trustee" means the trustee under the Indenture.
"Voting Equity Interest" of any Person as of any date means
the Equity Interests of such Person that is at the time entitled to vote in the
election of the Board of Directors or other governing body of such Person.
"Warrant Agent" means American Stock Transfer & Trust Company
or the successor or successors of such Warrant Agent appointed in accordance
with the terms hereof.
"Warrant Certificates" mean the registered certificates
(including without limitation, the global certificates) issued by the Company
under this Agreement representing the Warrants.
"Warrant Registration Statement" means any appropriate
registration statement of the Company filed with the SEC pursuant to the
Securities Act which covers any of the Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Warrant Shares" means the shares of Common Stock issued or
issuable upon the exercise of the Warrants.
(b) Other terms are defined in the respective sections set
forth below.
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Term Defined in Section
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Advice.......................................................................................6.13
Blackout Period...............................................................................6.2
Convertible Securities.......................................................................15.3
Definitive Warrants...........................................................................3.1
Depository....................................................................................3.1
Distribution.................................................................................15.3
DTC..........................................................................................6.13
Effectiveness Period..........................................................................6.2
Global Warrants...............................................................................3.1
Options..................................................................................... 15.3
SEC Reports....................................................................................22
Time of Determination....................................................................... 15.6
Transfer Agent.................................................................................13
Section 2. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
Section 3. Issuance of Warrants.
3.1 Warrant Certificates. The Warrants will be issued in the form
of one or more global certificates (the "GLOBAL WARRANTS"), substantially in the
form of Exhibit A (including footnotes 1, 2 and 3 thereto). The Global Warrants
shall be deposited on the Issue Date with, or with the Warrant Agent as
custodian for, The Depository Trust Company (the "DEPOSITARY") and registered in
the name of Cede & Co., as the Depositary's nominee. Each Global Warrant shall
represent such of the outstanding Warrants as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Warrants from time to time endorsed thereon and that the aggregate amount of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate. Upon request, except as otherwise provided in Section
7(b)(iii) hereof, a Holder may receive from the Depositary and the Warrant Agent
Warrants in definitive form (the "DEFINITIVE WARRANTS"), substantially in the
form of Exhibit A (not including footnotes 1 and 2 thereto) as set forth in
Section 7 below.
3.2 Regulation S Global Warrant. Warrants offered and sold in
reliance on Regulation S shall be issued in the form of the Regulation S Global
Warrant, which shall be deposited on behalf of the purchasers of the Warrants
represented thereby with the Warrant Agent, at its New York office, as custodian
for the Depositary, and registered in the name of the Depositary or the nominee
of the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate number of Warrants evidenced by
the Regulation S Global Warrant may from time to time be increased or decreased
by adjustments made on the records of the Warrant Agent and the Depositary or
its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
3.3 Registration and Countersignature. The Warrant Agent, on
behalf of the Company, shall number and register the Warrant Certificates in a
register as they are issued by the Company.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written
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instructions of the Chairman of the Board, the President. a Vice President, the
Treasurer or the Controller of the Company, initially countersign, issue and
deliver Warrants entitling the Holders thereof to purchase not more than the
aggregate number of Warrant Shares referred to above in the first recital hereof
and shall countersign and deliver Warrants as otherwise provided in this
Agreement.
The Company and the Warrant Agent may deem and treat the Holder(s) of
the Warrant Certificates as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for all
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary. Prior to the Separation Date, the registered holder of a
Unit shall be deemed the registered Holder of the related Warrants for all
purposes hereunder.
Section 4. Execution of Warrant Certificates. Certificates
(the "WARRANT CERTIFICATES") evidencing Global Warrants or Definitive Warrants
to be delivered pursuant hereto shall be signed on behalf of the Company by its
Chairman of the Board, President, Chief Executive Officer, Chief Financial
Officer, a Vice President, Secretary, an Assistant Secretary, Treasurer or an
Assistant Treasurer. Each such signature upon the Warrant Certificates may be in
the form of a facsimile signature of the present or any future Chairman of the
Board, President, Chief Executive Officer, Chief Financial Officer, a Vice
President, Secretary, an Assistant Secretary, Treasurer or an Assistant
Treasurer and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Chief Executive Officer, Chief Financial Officer, a Vice President, Secretary,
an Assistant Secretary, Treasurer or an Assistant Treasurer, notwithstanding the
fact that at the time the Warrant Certificates shall be countersigned and
delivered or disposed of such person shall have ceased to hold such office.
In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Agreement any
such person was not such officer.
Warrant Certificates shall be dated the date of
countersignature.
Section 5. Separation of Warrants. The Notes and Warrants
shall not be separately transferable prior to the Separation Date and shall be
automatically separated on the Separation Date.
Section 6. Registration Rights.
6.1 Demand Registration After Underwritten Public Equity Offering
Subject to the other provisions of this Section 6, commencing 180 days after an
initial underwritten public offering of the Company's Capital Stock, Holders
owning, individually or in the aggregate, not less than the Requisite Securities
may make a written request for one registration under the Securities Act of
their Registrable Securities (a "DEMAND REGISTRATION"). Within 120 days of the
receipt of
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such written request for a Demand Registration, the Company shall file with the
SEC and use its best efforts to cause to become effective under the Securities
Act a Registration Statement with respect to such Registrable Securities. Any
such request will specify the number of Registrable Securities proposed to be
sold and will also specify the intended method of disposition thereof. The
Company shall give written notice of such registration request to all other
Holders of Registrable Securities within 20 days after the receipt thereof.
Within 30 days after the date of such notice from the Company, any Holder may
request in writing that such Holder's Registrable Securities be included in such
Registration Statement and the Company shall include in such Registration
Statement the Registrable Securities of any such Holder requested to be so
included (the "INCLUDED SECURITIES"). Each such request by such other Holders
shall specify the number of Included Securities proposed to be sold and the
intended method of disposition thereof. Subject to Sections 6.2 and 6.6 hereof,
the Company shall be required to register Registrable Securities pursuant to
this Section 6.1 only once.
Subject to Section 6.6 hereof, no other securities of the
Company except (i) Registrable Securities held by any Holder, (ii) equity
securities to be offered and sold for the account of the Company and (iii) any
equity securities of the Company held by any Person having "piggy-back"
registration rights pursuant to any contractual obligation of the Company shall
be included in a Demand Registration; provided, however, that no such securities
for the account of the Company or any other Person (other than the parties to
the Stockholder Rights Agreement) shall be so included unless, in connection
with any underwritten offering, the managing underwriter or underwriters confirm
to the Holders of Registrable Securities to be included in such Demand
Registration that the inclusion of such other securities will not be likely to
affect the price at which the Registrable Securities may be sold. The inclusion
of any such securities for the account of the Company or any other Person shall
be on the same terms as that of the Registrable Securities.
6.2 Effective Registration. A Registration Statement will not be
deemed to have been effected as a Demand Registration unless it has been
declared effective by the SEC and the Company has complied in a timely manner
and in all material respects with all of its obligations under this Agreement
with respect thereto; provided, however, that if, after such Registration
Statement has become effective, the offering of Registrable Securities pursuant
to such Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the SEC or any other governmental or
administrative agency or court that prevents, restrains or otherwise limits the
sale of Registrable Securities pursuant to such Registration Statement for any
reason not attributable to any Holder participating in such registration and
such Registration Statement has not become effective within a reasonable time
period thereafter (not to exceed 45 days), such Registration Statement will be
deemed not to have been effected. The Company shall keep any Demand Registration
continuously effective under the Securities Act for the shorter of (A) an
aggregate of 180 days after the effective date thereof (such 180 day period
being referred to herein as the "EFFECTIVENESS PERIOD") or (B) such period of
time as all of the Warrant Shares included in such registration statement shall
have been sold thereunder, provided, however, that the Company may postpone the
filing period, suspend the effectiveness of any registration statement, suspend
the use of any prospectus and shall not be required to amend or supplement the
registration statement any related prospectus or any document incorporated
therein by reference (other than an effective registration statement being used
for an underwritten offering) in the event that, and for a period (a "BLACK OUT
PERIOD") not to exceed an aggregate of 45 days with respect to a Demand
Registration:
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(i) an event or circumstance occurs and is continuing as is
continuing as a result of which the registration statement, any related
prospectus or any document incorporated therein by reference as then amended or
supplemented would, in the Company's good faith judgment, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and
(ii) either
(A) the Company determines in its good faith judgment
that the disclosure of such an event at such time would have a material adverse
effect on the business, operations or prospects of the Company, or
(B) the disclosure otherwise relates to a material
business transaction which has not yet been publicly disclosed; provided,
further, that the Effectiveness Period shall be extended by the number of days
in any Black Out Period.
In the event of any "lock up" or "black out" period in any underwriting or
purchase agreement, the Company will so notify the holders of Warrants and
Warrant Shares.
If (i) a registration requested pursuant to this Section 6.2
is deemed not to have been effected or (ii) a Demand Registration does not
remain effective under the Securities Act in accordance with the immediately
preceding sentence, then such registration shall not count towards determining
if the Company has satisfied its obligation to effect one Demand Registration
pursuant to this Section 6.2.
6.3 Restrictions on Sale by Holders. Each Holder of Registrable
Securities whose Registrable Securities are covered by a Registration Statement
filed pursuant to this Section 6 and are to be sold thereunder agrees, if and to
the extent reasonably requested by the managing underwriter or underwriters in
an underwritten offering, not to effect any public sale or distribution of
Registrable Securities or of securities of the Company of the same class as any
securities included in such Registration Statement, including a sale pursuant to
Rule 144 (except as part of such underwritten offering), during the 180 day
period beginning on the closing date of each underwritten offering made pursuant
to such Registration Statement, to the extent timely notified in writing by the
Company or such managing underwriter or underwriters.
The foregoing provisions of this Section 6.3 shall not apply
to any Holder of Registrable Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
provided, however, that any such Holder shall undertake, in its request to
participate in any such underwritten offering, not to effect any public sale or
distribution of any Registrable Securities commencing on the date of sale of
such Registrable Securities unless it has provided 45 days' prior written notice
of such sale or distribution to the underwriter or underwriters.
6.4 Underwritten Registrations. If any of the Registrable
Securities covered by a Demand Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Company.
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No Holder of Registrable Securities may participate in any
underwritten registration pursuant to a Registration Statement filed under this
Agreement unless such Holder (a) agrees to (i) sell such Holder's Registrable
Securities on the basis provided in and in compliance with any underwriting
arrangements approved by the Holders of not less than a majority of the
Registrable Securities to be sold thereunder and (ii) comply with Regulation M
under the Exchange Act and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
6.5 Expenses. The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to Section 6.1 hereof. Each
Holder of Registrable Securities shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to a Registration Statement
requested pursuant to this Section 6.
6.6 Priority in Demand Registration. In a registration pursuant to
Section 6.1 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders who have requested such Demand
Registration or who have sought inclusion therein that in such underwriter's or
underwriters' opinion the total number of securities which the Selling Holders
and any other Person desiring to participate in such registration intend to
include in such offering is such as to affect adversely the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration. In
such event, securities shall be registered in such registration in the following
order of priority: (i) first, the securities which have been requested to be
included in such registration by the Holders of Registrable Securities pursuant
to this Agreement, (ii) second. provided that no securities sought to be
included by the Holders of Registrable Securities have been excluded from such
registration, the securities to be offered and sold for the account of the
Company, and (iii) third, provided that no securities sought to be included by
the Company have been excluded from such registration, the securities of other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Company (pro rata based on the amount of
securities sought to be registered by such Persons).
If any securities of a Holder have been excluded from a
registration statement pursuant to the provisions of the foregoing paragraph,
then such registration shall not count towards determining whether the Company
has satisfied its obligation to effect one Demand Registration pursuant to
Section 6.1 hereof.
6.7 Piggy-Back Registration. Subject to the other provisions of
this Section 6.7 and to the provisions of Sections 6.8 and 6.9, if at any time
the Company proposes to file a Registration Statement under the Securities Act
with respect to an offering by the Company for its own account or for the
account of any of its security holders of Common Stock (other than (i) a
Registration Statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC), (ii) a Registration Statement filed in connection with an
offering of securities solely to the Company's existing security holders or any
offer of debt securities or convertible debt securities or (iii) a Demand
Registration), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event fewer than 5 days after the filing date or 10 days if the Company is
subject to filing reports under the Exchange Act and able
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to use Form S-3 under the Securities Act), and such notice shall offer such
Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request in writing not later than 20 days
prior to the anticipated effective date of the Registration Statement (or eight
days after the notice of the proposed filing if the Company is subject to filing
reports under the Exchange Act and able to use Form S-3 under the Securities
Act) after receipt of such written notice from the Company (which request shall
specify the Registrable Securities intended to be disposed of by such Selling
Holder and the intended method of distribution thereof) (a "PIGGY-BACK
REGISTRATION"). The Company shall use its best efforts to keep such Piggy-Back
Registration continuously effective under the Securities Act until at least the
earlier of (A) 90 days after the effective date thereof or (B) the consummation
of the distribution by the Holders of all of the Registrable Securities covered
thereby. The Company shall use its best efforts to cause the managing
underwriter or underwriters, if any, of such proposed offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration to
be included on the same terms and conditions as any similar securities of the
Company or any other security holder included therein and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Selling Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 6.7 by giving written notice to
the Company of its request to withdraw at any time prior to the time it becomes
effective. The Company may withdraw a Piggy-Back Registration at any time prior
to the time it becomes effective or the Company may elect to delay the
registration; provided, however, that the Company shall give prompt written
notice thereof to participating Selling Holders. The Piggy-Back Registration
right of holders of Warrants and Warrant Shares shall not apply to any
underwritten public offering of Capital Stock of the Company that is the initial
underwritten public offering of the Capital Stock of the Company unless the
securities of other Selling Holders are to be included therein. The Company will
pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 6.7, and each Holder
of Registrable Securities shall pay all underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a Registration Statement effected pursuant to
this Section 6.7.
No registration effected under this Section 6.7, and no
failure to effect a registration under this Section 6.7, shall relieve the
Company of its obligation to effect a registration upon the request of Holders
of Registrable Securities pursuant to Section 6.1 hereof, and no failure to
effect a registration under this Section 6.7 and to complete the sale of
securities registered thereunder in connection therewith shall relieve the
Company of any other obligation under this Agreement.
6.8 Priority in Piggy-Back Registration. In a registration
pursuant to Section 6.2 hereof involving an underwritten offering, if the
managing underwriter or underwriters of such underwritten offering have
informed, in writing, the Company and the Selling Holders requesting inclusion
in such offering that in such underwriter's or underwriters' opinion the total
number of securities which the Company, the Selling Holders and any other
Persons desiring to participate in such registration intend to include in such
offering is such as to materially and adversely affect the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration. In
such event: (x) in cases only involving the registration for sale of securities
for the Company's own account (other than pursuant to the exercise of
"piggy-back" rights herein and in other contractual commitments of the Company),
securities shall be registered in such offering in the following order of
priority: (i) first, the
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securities which the Company proposes to register, (ii) second, provided that no
securities sought to be included by the Company have been excluded from such
registration, the securities of other Persons entitled to exercise "piggy-back"
registration rights pursuant to contractual commitments of the Company existing
as of the date hereof (the "Investors") (pro rata based on the amount of
securities sought to be registered by such Investors); and (iii) third, provided
that no securities sought to be included by the Company or the Investors have
been excluded from such registration, the securities that have been requested to
be included in such registration by the Holders of the Registrable Securities
pursuant to this Agreement and the securities of other Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments of
the Company (pro rata based on the amount of securities sought to be registered
by such Persons), and (y) in cases involving the registration for sale of
securities for the account of any Investors or any other Person (other than the
Holders pursuant to Section 6.1 hereof), securities shall be registered in such
offering in the following order of priority: (i) first, the securities of any
Investor shall be included pro rata based on the amount of securities sought to
be registered by such Persons, (ii) provided that no securities of such Investor
referred to in the immediately preceding clause (i) have been excluded from such
registration, the securities which have been requested to be included in such
registration by the Holders of Registrable Securities pursuant to this Agreement
pro rata based upon the aggregate amount of securities held and (iii) third,
provided that no securities of the Investors or of the Holders have been
excluded from such registrations, securities of other Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments
(pro rata based on the amount of securities sought to be registered by such
Persons) and (iv) fifth, provided that no securities of any other Person have
been excluded from such registration, the securities which the Company proposes
to register.
If, as a result of the provisions of this Section 6.8, any
Selling Holder shall not be entitled to include all Registrable Securities in a
Piggy-Back Registration that such Selling Holder has requested to be included,
such Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration at any time prior to the effectiveness thereof.
6.9 Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants. The obligations of the Company set forth in
Section 6 hereof are subject to each of the following limitations, conditions
and qualifications:
(i) Subject to the next sentence of this paragraph, the
Company shall be entitled to postpone, for a reasonable period of time, the
filing or effectiveness of, or suspend the rights of any Holders to make sales
pursuant to, any Registration Statement otherwise required to be prepared, filed
and made and kept effective by it hereunder; provided, however, that the
duration of such postponement or suspension may not exceed the earlier to occur
of (A) 15 days after the cessation of the circumstances described in the next
sentence of this paragraph on which such postponement or suspension is based or
(B) 90 days after the date of the determination of the Board of Directors
referred to in the next sentence, and the duration of such postponement or
suspension shall be excluded from the calculation of the 180-day period
described in Section 6.2 hereof. Such postponement or suspension may be effected
only if the Board of Directors of the Company determines reasonably and in good
faith that the filing or effectiveness of, or sales pursuant to, such
Registration Statement would materially impede, delay or interfere with any
financing, offer or sale of securities, acquisition, corporate reorganization or
other significant transaction involving the Company or any of its Affiliates or
require disclosure of material information which the Company has a bona fide
business purpose for preserving as confidential, which financing, offer or sale
of securities, acquisition, corporate reorganization or other
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significant transaction had been initiated at the time of the filing of such
Registration Statement; provided, however, that the Company shall not be
entitled to such postponement or suspension more than twice in any twelve-month
period. If the Company shall so postpone the filing of a Registration Statement
it shall, as promptly as possible, deliver a certificate signed by the Chief
Executive Officer of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (y) have the right, in the case of
a postponement of the filing or effectiveness of a Registration Statement, upon
the affirmative vote of the Holders of not less than a majority of the
Registrable Securities to be included in such Registration Statement, to
withdraw the request for registration by giving written notice to the Company
within 10 days after receipt of such notice or (z) in the case of a suspension
of the right to make sales, receive an extension of the registration period
equal to the number of days of the suspension. Any Demand Registration as to
which the withdrawal election referred to in the preceding sentence has been
effected shall not be counted for purposes of the single Demand Registration the
Company may be required to effect pursuant to Section 6.1 hereof.
(ii) The Company shall not be required by this Agreement to
effect a Demand Registration within 90 days immediately following the effective
date of any registration statement pertaining to a firmly underwritten offering
of equity securities of the Company for its own account; provided, however, that
this clause (ii) shall not apply if the underwriter of such offering consents to
the request for such Demand Registration pursuant to Section 6.1.
(iii) The Company shall not be required by this Agreement to
effect a Demand Registration within 60 days immediately following the effective
date of any registration statement pertaining to a firmly underwritten offering
of equity securities of the Company for the account of any security holder of
the Company; provided, however, that this clause (ii) shall not apply if the
underwriter of such offering consents to the request for such Demand
Registration pursuant to Section 6.1.
(iv) The Company's obligations shall be subject to the
obligations of the Selling Holders, which the Selling Holders acknowledge, to
furnish all information and materials and to take any and all actions as may be
required under applicable federal and state securities laws and regulations to
permit the Company to comply with all applicable requirements of the SEC and to
obtain any acceleration of the effective date of such Registration Statement.
(v) The Company shall not be obligated to cause any special
audit to be undertaken in connection with any registration pursuant to this
Agreement unless such audit is required by the SEC or requested by the
underwriters with respect to such registration.
6.10 Restrictions on Sale by the Company and Others. The Company
will not, and the Company will not cause or permit any subsidiary of the Company
to, after the date hereof, enter into any agreement or contract that conflicts
with or limits or prohibits the full and timely exercise by the Holders of
Registrable Securities of the rights herein to request a Demand Registration or
to join in any Piggy-Back Registration subject to the other terms and provisions
hereof.
6.11 Rule 144 and Rule 144A. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder or beneficial owner of
Registrable Securities, make available such information necessary to permit
sales pursuant to Rule
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144A under the Securities Act. The Company further covenants that it will take
such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144(k) and Rule 144A under
the Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC (it being expressly
understood that the foregoing shall not create any obligation on the part of the
Company to file periodic reports or other reports under the Exchange Act at any
time that it is not then required to file such reports pursuant to the Exchange
Act). Upon the request of any Holder of Registrable Securities, the Company will
in a timely manner deliver to such Holder a written statement as to whether it
has complied with such information requirements.
6.12 "Market Stand-Off" Agreement.
(a) If the Company has complied with all its obligations with
respect to a Demand Registration or a Piggy-Back Registration relating to an
underwritten public offering, all holders of Warrants and Warrant Shares, upon
request of the lead managing underwriter with respect to such underwritten
public offering, will be required to not sell or otherwise dispose of any
Warrants and Warrant Shares owned by them for a period not to exceed 180 days
from the consummation of such underwritten public offering; provided, however,
that except for the initial underwritten public offering of Capital Stock of the
Company, such requirement shall apply to Warrant Shares not sold in a Demand
Registration or Piggy-Back Registration due to a reduction pursuant to Section
6.6 or 6.8 hereof for a period not to exceed 90 days from such date of
consummation.
(b) In order to enforce the foregoing covenant, the Company
shall have the right to place restrictive legends on the certificates
representing the shares subject to this Section 6 and to impose stop transfer
instructions with respect to the Registrable Securities and such other shares of
stock of each Holder (and the shares or securities of every other Person subject
to the foregoing restriction) until the end of such period. The provisions of
this Section 6.12 shall be binding upon any transferee of any Registrable
Securities.
6.13 Registration Procedures. In connection with the obligations of
the Company with respect to any Registration Statement pursuant to Section 6
hereof, the Company shall, except as otherwise provided:
(a) Prepare and file with the SEC as soon as practicable each
such Registration Statement (but in any event on or prior to the date of filing
thereof required under this Agreement) and cause such Registration Statement to
become effective and remain effective as provided herein; provided, however,
that before filing any such Registration Statement or any Prospectus pursuant to
Section 6.1 hereof or any amendments or supplements thereto (including documents
that would be incorporated or deemed to be incorporated therein by reference,
including such documents filed under the Exchange Act that would be incorporated
therein by reference), the Company shall, upon request, afford promptly to the
Holders of the Registrable Securities covered by such Registration Statement,
their counsel and the managing underwriter or underwriters, if any, an
opportunity to review copies of all such documents proposed to be filed a
reasonable time prior to the proposed filing thereof. The Company shall not file
any Registration Statement or Prospectus pursuant to Section 6.1 or any
amendments or supplements thereto if the Holders of a majority of the
Registrable Securities covered by such Registration Statement, their counsel, or
the managing
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underwriter or underwriters, if any, shall reasonably object in writing unless
failure to file any such amendment or supplement would involve a violation of
the Securities Act or other applicable law.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the time periods
prescribed hereby; cause the related Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to it with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such prospectus as so
supplemented.
(c) Notify the Holders of Registrable Securities, their
counsel and the managing underwriter or underwriters, if any, promptly (but in
any event within two (2) Business Days), and confirm such notice in writing, (i)
when a Prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules and exhibits), (ii) of the issuance
by the SEC of any stop order suspending the effectiveness of such Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation or threatening of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Securities the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 6.13(1) below, to
the knowledge of the Company, cease to be true and correct in any material
respect, (iv) of the receipt by the Company of any notification with respect to
(A) the suspension of the qualification or exemption from qualification of the
Registration Statement or any of the Registrable Securities covered thereby for
offer or sale in any jurisdiction, or (B) the initiation of any proceeding for
such purpose, (v) of the happening of any event, the existence of any condition
or information becoming known that requires the making of any changes in such
Registration Statement, Prospectus or documents so that, in the case of such
Registration Statement, it will conform in all material respects with the
requirements of the Securities Act and it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will conform in all material respects with the
requirements of the Securities Act and it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (vi) of the
Company's reasonable determination that a post-effective amendment to such
Registration Statement would be appropriate.
(d) Use every reasonable effort to prevent the issuance of any
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities covered
thereby for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order as soon as practicable.
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(e) Subject to Sections 6.2 and 6.9 hereof, if requested by
the managing underwriter or underwriters, if any, or the Holders of a majority
of the Registrable Securities being sold in connection with an underwriting
offering (only for registrations pursuant to Section 6.1 hereof), (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters, if any, or such Holders
reasonably request to be included therein to comply with applicable law, (ii)
make all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such Registration
Statement if required in connection therewith.
(f) Furnish to each Holder of Registrable Securities who so
requests and to counsel for the Holders of Registrable Securities and each
managing underwriter, if any, without charge, upon request, one conformed copy
of the Registration Statement and each post-effective amendment thereto,
including financial statements and schedules, and of all documents incorporated
or deemed to be incorporated therein by reference and all exhibits (including
exhibits incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their
counsel and each underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request; and, subject to Sections 6.2 and
6.9 and the last paragraph of this Section 6.13, the Company hereby consents to
the use of such prospectus and each amendment or supplement thereto by each of
the Holders of Registrable Securities and the underwriter or underwriters or
agents, if any, in connection with the offering and sale of the registrable
Securities covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, to
register or qualify, and cooperate with the Holders of Registrable Securities,
the underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of, such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions within the
United States as the managing underwriter or underwriters reasonably request in
writing, or, in the event of a non-underwritten offering, as the Holders of a
majority of the Registrable Securities may reasonably request; provided,
however, that where Registrable Securities are offered other than through an
underwritten offering, the Company agrees to cause its counsel to perform blue
sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 6.13 (h); keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the securities covered thereby; provided,
however, that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it is not then so qualified, (B) take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (C) become subject to taxation
in any jurisdiction where it is not then so subject.
(i) Cooperate with the Holders of Registrable Securities and
the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold, which certificates shall not bear any restrictive legends whatsoever
and shall be in a form eligible for deposit with The Depository Trust Company
("DTC"); and enable such Registrable Securities to be in such denominations and
registered in
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such names as the managing underwriter or underwriters, if any, or Holders may
reasonably request at least two Business Days prior to any sale of Registrable
Securities in a firm commitment underwritten public offering.
(j) Subject to Sections 6.2 and 6.9 hereof, upon the
occurrence of any event contemplated by Section 6.13(c)(v) or 6.13(c)(vi) above,
as promptly as practicable prepare a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and,
subject to Section 6.13(a) hereof, file such with the SEC so that, as thereafter
delivered to the purchasers of Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state 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.
(k) Prior to the effective date of a Registration Statement,
(i) provide the registrar for the Registrable Securities with certificates for
such securities in a form eligible for deposit with DTC and (ii) provide a CUSIP
number for such securities.
(l) In connection with any registration hereunder that may be
an underwritten offering enter into an underwriting agreement in form, scope and
substance as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing underwriter or underwriters
in order to expedite or facilitate the registration or disposition of such
Registrable Securities in any underwritten offering to be made of the
Registrable Securities in accordance with this Agreement, and in such
connection, (i) make such representations and warranties to the underwriter or
underwriters, with respect to the business of the Company and the subsidiaries
of the Company, and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested; (ii) use reasonable efforts to obtain opinions of counsel to the
Company and updates thereof, addressed to the underwriter or underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by underwriters;
(iii) use reasonable efforts to obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Company (and,
if applicable, the subsidiaries of the Company) and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement, addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and such other
matters as reasonably requested by the managing underwriter or underwriters and
as permitted by the Statement of Auditing Standards No. 72; and (iv) if an
underwriting agreement is entered into, the same shall contain customary
indemnification provisions and procedures (or such other provisions and
procedures reasonably acceptable to Holders of a majority of Registrable
Securities covered by such Registration Statement and the managing underwriter
or underwriters or agents) with respect to all parties to be indemnified
pursuant to such agreement. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
(m) Make available for inspection by a representative of the
Holders of Registrable Securities being sold, any underwriter participating in
any such disposition of
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Registrable Securities, if any, and any attorney or accountant retained by such
representative of the Holders or underwriter, at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and the subsidiaries
of the Company, and cause the officers, directors and employees of the Company
and the subsidiaries of the Company to supply all information in each case
reasonably requested by any such Person in connection with such Registration
Statement; provided, however, that all material non-public information shall be
kept confidential by such Person, except to the extent that (i) subject to
Sections 6.2 and 6.9 hereof, the disclosure of such information is necessary or
advisable to avoid or correct a misstatement or omission in the Registration
Statement or in any Prospectus; provided, however, that prior notice is given to
the Company, and the Company's legal counsel and such Holder's legal counsel
concur that disclosure is required, (ii) the release of such information is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is necessary in connection
with any action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Person and arising out of, based upon, relating to or
involving this Agreement or any of the transactions contemplated hereby or
arising hereunder; provided, however, that prior notice shall be provided as
soon as practicable to the Company of the potential disclosure of any
information by such Person pursuant to clauses (ii) or (iii) of this sentence to
permit the Company to obtain a protective order (or waive the provisions of this
paragraph (m)) and that such Person shall take all actions as are reasonably
necessary to protect the confidentiality of such information (if practicable) to
the extent such action is otherwise not inconsistent with, an impairment of or
in derogation of the rights and interests of the Holder or any such Person, or
(iv) such information has been made generally available to the public.
(n) Comply with all applicable rules and regulations of the
SEC and make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than forty-five (45) days after the end of any 12-month period (or ninety (90)
days after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities are
sold to an underwriter or to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to an underwriter or to underwriters
in such an offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of the relevant Registration Statement,
which statements shall cover such 12-month periods.
(o) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed.
(p) Cooperate with the Selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends and registered in such names as the selling Holders may reasonably
request at least two Business Days prior to the closing of any sale of
Registrable Securities.
Each seller of Registrable Securities as to which any
registration is being effected agrees, as a condition to the registration
obligations with respect to such Holder provided herein, to furnish to the
Company such information regarding such seller and the distribution of such
Registrable Securities as the Company may, from time to time, reasonably request
in writing to comply with the Securities Act and other applicable law. The
Company may exclude from such
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registration the Registrable Securities of any seller for so long as suchseller
fails to furnish such information within a reasonable time after receiving such
request. If the identity of a seller of Registrable Securities is to be
disclosed in the Registration Statement, such seller shall be permitted to
include all information regarding such seller as it shall reasonably request.
Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 6.13(c)(ii),
6.13(c)(iv), 6.13(c)(v), or 6.13(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Registrable Securities covered by the
Registration Statement or Prospectus until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6.13(j)
hereof), or until it is advised in writing (the "ADVICE") by the Company that
the use of the applicable prospectus may be resumed, and has received copies of
any amendments or supplements thereto, and, if so directed by the Company, such
Holder will, at the Company's expense, deliver to the Company all copies, other
than permanent file copies, then in such Holder's actual possession of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice; provided, however, that nothing herein shall create any
obligation on the part of any Holder to undertake to retrieve or return any such
Prospectus not within the actual possession of such Holder. In the event the
Company shall give any such notice, the period of time for which a Registration
Statement is required hereunder to be effective shall be extended by the number
of days during such periods from and including the date of the giving of such
notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 6.13(j) hereof or (y)
the Advice.
Section 7. Tag-Along Rights. Prior to the consummation of an
underwritten public offering or the listing of the Company's Common Stock on a
national securities exchange or the authorization for quotation of such Common
Stock on the Nasdaq National Market, in the event that a Permitted Holder or
Permitted Holders propose to sell or otherwise transfer, directly or indirectly,
in a single transaction or a series of related transactions, shares of the
Company's Common Stock representing 25% or more of the aggregate number of
shares of such Common Stock owned by such Permitted Holders on the date the
transactions contemplated by the Merger Agreement are consummated (other than
(i) sales in an bona fide public offering pursuant to an effective registration
statement under the Securities Act, (ii) sales to the public pursuant to Rule
144 or any similar rule or rules then in effect, (c) transfers to the Company or
one or more of its stockholders pursuant to a right of first refusal and (d)
transfers to Affiliates of such Permitted Holders), such Permitted Holders shall
give each holder of Warrants or Warrant Shares notice (the "TAG-ALONG NOTICE")
of the number of shares of Common Stock to be transferred and the price and
other terms on which such shares of Common Stock are to be transferred. Any
Holder may elect to participate in such transfer (a "TAG-ALONG RIGHT") by giving
notice of the decision to exercise the Tag-Along Right to the selling Permitted
Holders within 10 Business Days of receipt of the Tag-Along Notice. The number
of Warrants or Warrant Shares that any Holder electing to participate in a
transfer shall be eligible to sell pursuant to the Tag-Along Right shall be that
percentage of the aggregate number of shares of Common Stock to be transferred
equal to a fraction, expressed as a percentage, the numerator of which is the
total number of shares of Common Stock held by such Holder assuming the exercise
of all Warrants held by such Holder and the denominator of which is the total
number of shares of Common Stock held by all stockholders participating in such
transfer, including the Permitted Holder or Permitted Holders and other Holders,
assuming the exercise of all Warrants held by Holders participating in the
transfer.
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Any Warrants or Warrant Shares purchased from the
Holders thereof pursuant to the exercise of Tag-Along Rights shall be paid for
at the same price per share of Common Stock and on the same terms and conditions
as such proposed transfer of Common Stock by the selling Permitted Holders. If
the securities to be purchased include securities other than Common Stock, the
price to be paid for the Warrants and Warrant Shares shall be the same price per
share or other denomination paid by the proposed purchaser for like securities
purchased from the Permitted Holders or, if like securities are not purchased
from the Permitted Holders, the fair market value of such securities as
determined by a nationally recognized investment banking firm selected by the
Company.
In the event that the proposed purchaser does not purchase
Warrants or Warrant Shares entitled to be transferred pursuant to this Section
7, then the selling Permitted Holder or Permitted Holders shall purchase such
Warrants or Warrant Shares if the transfer is consummated.
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Section 8. Drag Along Rights. Subject to the limitations set
forth below, if at any time prior to an underwritten public offering of Common
Stock of the Company, any Permitted Holder or Permitted Holders propose to sell
or otherwise transfer, including by way of merger, consolidation or otherwise,
all of the Capital Stock of the Company held by such Permitted Holder or
Permitted Holders to a Person that is not a Permitted Holder in a transaction
resulting in a Change of Control of the Company (a "DRAG SALE"), the
transferring Permitted Holder or Permitted Holders (whether directly or
indirectly through an Affiliate) shall have the right to require the Holders of
Warrants or Warrant Shares, as the case may be, to sell such Warrants or
Warrants Shares to the proposed transferee (the "DRAG-ALONG RIGHTS"). The
exercise of Drag-Along Rights are subject to the conditions that (i) the
consideration to be received by the Holders shall be the same type of
consideration received by the Permitted Holder or Permitted Holders in the Drag
Sale and, in any event, shall be cash or freely transferable marketable
securities and (b) after giving effect to such Drag Sale, the Permitted Holders
shall not own, directly or indirectly, any Capital Stock of the Company or the
surviving entity or rights to purchase such Capital Stock.
Any Warrants or Warrant Shares purchased from the
holders thereof pursuant to the exercise of such Drag-Along Rights shall be paid
for at the same price per share of Common Stock and on the same terms and
conditions as such proposed transfer of Common Stock by the Permitted Holders
pursuant to the Drag Sale. If the securities to be purchased include securities
other than Common Stock, the price to be paid for the Warrants and Warrant
Shares shall be the same price per share or other denomination paid by the
proposed purchaser in the Drag Sale for like securities purchased from the
Permitted Holders or, if like securities are not purchased from the Permitted
Holders, the fair market value of such securities as determined by a nationally
recognized investment banking firm selected by the Company.
If at any time a Permitted Holder or Permitted
Holders intend to exercise Drag-Along Rights pursuant to this Section 8, such
Permitted Holder or Permitted Holders, as the case may be, shall give written
notice thereof to the Holders at least 10 Business Days prior to the
consummation of the proposed transaction. The notice shall set out, in
reasonable detail, (i) information concerning the identity of the proposed
transferee and (ii) a description of the material terms and conditions of the
proposed Drag Sale.
Section 9. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Agreement and the procedures of
the Depositary therefor.
(b) Exchange of a Beneficial Interest in a Global Warrant for
a Definitive Warrant.
(i) Any Holder of a beneficial interest in a Global Warrant
may upon request exchange such beneficial interest for a Definitive Warrant.
Upon receipt by the Warrant Agent of written instructions or such other form of
instructions as is customary for the Depositary from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global Warrant
and, in the case of a Registrable Security, the following additional information
and documents (all of which may be submitted by facsimile):
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(A) if such beneficial interest is being delivered to
the Person designated by the Depositary as being the beneficial owner, a
certification to that effect (in substantially the form of Exhibit B hereto);
(B) if such beneficial interest is being transferred
(1) to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in accordance with Rule 144 under the
Securities Act (based on an opinion of counsel if the Company so requests) or
(3) pursuant to an effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of Exhibit B hereto);
(C) if such beneficial interest is being transferred
to any institutional "accredited investor," within the meaning of Rule
50l(a)(l), (2), (3) or (7) under the Securities Act pursuant to a private
placement exemption from the registration requirements of the Securities Act
(based on an opinion of counsel if the Company so requests), a certification to
that effect (in substantially the form of Exhibit B hereto) and a certification
from the applicable transferee;
(D) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B);
provided, however, that no such exchange shall be made during the Restricted
Period; or
(E) if such beneficial interest is being transferred
in reliance on another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B hereto);
then the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and Warrant
Agent, the number of Warrants and Warrant Shares represented by the
Global Warrant to be reduced by the number of Warrants and Warrant
Shares to be represented by the Definitive Warrants to be issued in
exchange for the interest of such Person in the Global Warrant and,
following such reduction, the Company shall execute and the Warrant
Agent shall countersign and deliver to the transferee, as the case may
be, a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 9(b) shall be registered
in such names as the Depositary pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Warrant Agent. The
Warrant Agent shall deliver such Definitive Warrants to the Persons in whose
names such Warrants are so registered.
(iii) Notwithstanding the foregoing, a beneficial interest in
the Regulation S Global Warrant may not be exchanged for a Definitive Warrant or
transferred to a Person who takes delivery thereof in the form of a Definitive
Warrant prior to (x) the expiration of the Restricted Period and (y) the receipt
by the Warrant Agent of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.
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(c) Transfer and Exchange of Definitive Warrants.
When Definitive Warrants are presented to the Warrant Agent
with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number
of Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided,
however, that the Definitive Warrants presented or surrendered for
registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Warrant
Agent, duly executed by the Holder thereof or by his attorney, duly
authorized in writing; and
(y) in the case of Registrable Securities, such
request shall be accompanied by the following additional information
and documents, as applicable:
(iii) if such Registrable Security is being delivered to the
Warrant Agent by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in substantially the
form of Exhibit B hereto);
(iv) if such Registrable Security is being transferred (1)
to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if the Company so requests)
or (3) pursuant to an effective registration statement under the Securities Act,
a certification to that effect (in substantially the form of Exhibit B hereto);
(v) if such Registrable Security is being transferred to an
institutional "accredited investor," within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act pursuant to a private placement exemption
from the registration requirements of the Securities Act (and based on an
opinion of counsel if the Company so requests), a certification to that effect
(in substantially the form of Exhibit B hereto) and a certification from the
applicable transferee:
(vi) if such Registrable Security is being transferred
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B hereto);
or
(vii) if such Registrable Security is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B hereto).
(d) Restrictions on Exchange or Transfer of a Definitive
Warrant for a Beneficial Interest in a Global Warrant. A Definitive Warrant may
not be exchanged for a beneficial interest in a Global Warrant except upon
satisfaction of the requirements set forth below. Upon receipt by
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the Warrant Agent of a Definitive Warrant, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Warrant Agent,
together with:
(i) if such Definitive Warrant is a Registrable Security,
certification from the Holder thereof (in substantially the form of Exhibit B
hereto) to the effect that such Definitive Warrant is being transferred by such
Holder either (A) to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the Securities Act,
(B) outside the United States to a foreign Person in a transaction meeting the
requirements of Rule 904 under the Securities Act (and based on an opinion of
counsel if the Company so requests) or (C) to an "institutional accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, pursuant to a private placement exemption from the registration
requirements of the Securities Act, who has provided a certification to that
effect (and based on an opinion of counsel if the Company so requests) and who
wishes to take delivery thereof in the form of a beneficial interest in a Global
Warrant; and
(ii) whether or not such Definitive Warrant is a Registrable
Security, written instructions directing the Warrant Agent to make, or to direct
the Depositary to make, an endorsement on the Global Warrant to reflect an
increase in the number of Warrants and Warrant Shares represented by the Global
Warrant equal to the number of Warrants and Warrant Shares represented by such
Definitive Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants and Warrant Shares represented by the Global Warrant to be increased
accordingly. If no Global Warrants are then outstanding, the Company shall issue
and the Warrant Agent shall countersign a new Global Warrant representing the
appropriate number of Warrants and Warrant Shares.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 9), a Global Warrant may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Warrants notifies the
Company that the Depositary is unwilling or unable to continue as Depositary for
the Global Warrants and a successor Depositary for the Global Warrants is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Definitive Warrants
under this Agreement,
then the Company shall execute, and the Warrant Agent, upon written instructions
signed by an officer of the Company, shall countersign and deliver Definitive
Warrants, in an aggregate number
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equal to the number of Warrants represented by the Global Warrants, in exchange
for such Global Warrants.
(g) Legends.
(i) Except for any Registrable Security sold or transferred
(including any Registrable Security represented by a Global Warrant) as
discussed in clause (ii) below, each Warrant Certificate evidencing the Global
Warrants and the Definitive Warrants (and all Warrants issued in exchange
therefor or substitution thereof) and each certificate representing the Warrant
Shares shall be substantially in the form of Exhibit A hereto and shall bear a
legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS
WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (d) FOLLOWING THE
RELEASE OF PROCEEDS FROM THE ESCROW ACCOUNT, OUTSIDE THE UNITED STATES
TO A NON-UNITED STATES PERSON IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 904 UNDER THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
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(ii) Separability Legend. Until the Separation Date, each
Warrant Certificate shall bear a legend in substantially the following form (the
"Separability Legend"):
"UNTIL THE SEPARATION DATE (AS DEFINED), THIS WARRANT HAS BEEN ISSUED
AS, AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED 12
3/4% SENIOR SUBORDINATED NOTES DUE 2007. EACH UNIT CONSISTS OF $1,000
PRINCIPAL AMOUNT OF NOTES AND A WARRANT TO PURCHASE 0.2298 SHARES OF
COMMON STOCK, SUBJECT TO ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY
OF THE INDENTURE PURSUANT TO WHICH THE NOTES HAVE BEEN ISSUED IS
AVAILABLE FROM THE COMPANY UPON REQUEST."
(iii) Upon any sale or transfer of a Registrable Security
(including any Registrable Security represented by a Global Warrant) pursuant to
an effective registration statement under the Securities Act, pursuant to Rule
144 under the Securities Act or pursuant to an opinion of counsel reasonably
satisfactory to the Company that no legend is required:
(A) in the case of any Registrable Security that is a
Definitive Warrant, the Warrant Agent shall permit the Holder thereof to
exchange such Registrable Security for a Definitive Warrant that does not bear
the legend set forth in clause (i) above and rescind any restriction on the
transfer of such Registrable Security; and
(B) in the case of any Registrable Security
represented by a Global Warrant, such Registrable Security shall not be required
to bear the legend set forth in clause (i) above but shall continue to be
subject to the provisions of Section 7(e) hereof; provided, however, that with
respect to any request for an exchange of a Registrable Security that is
represented by a Global Warrant for a Definitive Warrant that does not bear the
legend set forth in clause (i) above, which request is made in reliance upon
Rule 144 (and based upon an opinion of counsel if the Company so requests), the
Holder thereof shall certify in writing to the Warrant Agent that such request
is being made pursuant to Rule 144 (such certification to be substantially in
the form of Exhibit B hereto).
(h) Cancellation of Global Warrant. At such time as all
beneficial interests in Global Warrants have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, all Global Warrants
shall be returned to or retained and cancelled by the Warrant Agent.
(i) Obligations with Respect to Transfers and Exchanges of
Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent is hereby authorized to countersign,
in accordance with the provisions of Section 3 and this Section 9, Definitive
Warrants and Global Warrants as required pursuant to the provisions of this
Section 9.
(ii) All Definitive Warrants and Global Warrants issued upon
any registration of transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to the same
benefits under this Agreement as the Definitive Warrants or Global Warrants
surrendered upon such registration of transfer or exchange.
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(iii) Prior to due presentment for registration of transfer or
exchange of any Warrant, the Warrant Agent and the Company may deem and treat
the Person in whose name any Warrant is registered (the "HOLDER" of such
Warrant) as the absolute owner of such Warrant and neither the Warrant Agent,
nor the Company shall be affected by notice to the contrary.
(iv) No service charge shall be made to a Holder for any
registration, transfer or exchange.
Section 10. Terms of Warrants; Exercise of Warrants.
Subject to the terms of this Agreement, each Warrant Holder
shall have the right, which may be exercised commencing at the opening of
business on the Exercisability Date and until 5:00 p.m., New York City time, on
the Expiration Date to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time be entitled to
receive on exercise of such Warrants and payment of the Exercise Price then in
effect for such Warrant Shares; provided, however, that no Holder shall be
entitled to exercise such Holder's Warrants at any time, unless, at the time of
exercise, (i) a registration statement under the Securities Act relating to the
Warrant Shares has been filed with, and declared effective by, the Commission,
and no stop order suspending the effectiveness of such registration statement
has been issued by the Commission or (ii) the issuance of the Warrant Shares is
permitted pursuant to an exemption from the registration requirements of the
Securities Act. Subject to the provisions of the following paragraph of this
Section 10, each Warrant not exercised prior to 5:00 p.m., New York City time,
on the Expiration Date shall become void and all rights thereunder and all
rights in respect thereof under this Agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants.
The Company shall give notice not less than 90, and not more
than 120, days prior to the Expiration Date to the Holders of all then
outstanding Warrants to the effect that the Warrants will terminate and become
void as of 5:00 p.m., New York City time, on the Expiration Date. If the Company
fails to give such notice, the Warrants will not expire until 90 days after the
Company gives such notice; provided, however, in no event will Holders be
entitled to any damages or other remedy for the Company's failure to give such
notice other than any such extension.
A Warrant may be exercised upon surrender to the Company at
the principal office of the Warrant Agent of the certificate or certificates
evidencing the Warrant to be exercised with the form of election to purchase on
the reverse thereof duly completed and signed, which signature shall be
guaranteed by a bank or trust company having an office or correspondent in the
United States or a broker or dealer which is a member of a registered securities
exchange or the National Association of Securities Dealers, Inc., and upon
payment to the Warrant Agent for the account of the Company of the Exercise
Price as adjusted as herein provided for each of the Warrant Shares in respect
of which such Warrant is then exercised. Payment of the aggregate Exercise Price
shall be made by Federal wire transfer to the account designated by the Company
or by certified or official bank check, payable to the order of the Company. In
the alternative, each Holder may exercise its right to receive Warrant Shares on
a net basis, such that without the exchange of any funds, the Holder receives
that number of Warrant Shares otherwise issuable upon exercise of its Warrants
less that number of Warrant Shares having a fair market value equal to the
aggregate Exercise Price that would otherwise have been paid by the Holder for
the Warrant Shares being issued. For purposes of the foregoing sentence, "fair
market value" of the Warrant
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Shares shall be the Current Market Price of the Warrant Shares on the date
immediately preceding the date of payment of the Exercise Price as determined by
the procedures set forth in Section 15.6. The exercise of Warrants by Holders of
beneficial interests in Global Warrants shall be effected in accordance with
this Agreement and the procedures of the Depositary therefor.
Subject to the provisions of Section 11 hereof, upon surrender
of Warrants and payment of the Exercise Price as provided above by any Holder,
the Warrant Agent shall promptly notify the Company. and the Company shall
promptly transfer to such Holder a certificate or certificates for the
appropriate number of Warrant Shares or other securities or property (including
any money) to which such Holder is entitled, registered or otherwise placed in,
or payable to the order of, such name or names as may be directed in writing by
such Holder, and shall deliver such certificate or certificates representing the
Warrant Shares and any other securities or property (including any money) to
such Holder or any other Person or Persons entitled to receive the same,
together with an amount in cash in lieu of any fraction of a share as provided
in Section 17. Any such certificate or certificates representing the Warrant
Shares shall be deemed to have been issued and any Person so designated to be
named therein shall be deemed to have become a Holder of record of such Warrant
Shares as of the date of the surrender of such Warrants and payment of the
Exercise Price.
The Warrants shall be exercisable commencing on the
Exercisability Date, at the election of the Holders thereof, either in full or
from time to time in part, and, in the event that a certificate evidencing
Warrants is exercised in respect of fewer than all of the Warrant Shares
issuable on such exercise at any time prior to the Expiration Date, a new
certificate evidencing the remaining Warrant or Warrants will be issued, and the
Warrant Agent is hereby irrevocably authorized to countersign and to deliver the
required new Warrant Certificate or Certificates pursuant to the provisions of
this Section 10 and of Section 4 hereof, and the Company, whenever required by
the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly
executed on behalf of the Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent. Such cancelled Warrant Certificates
shall, upon the Company's written request, then be returned by the Warrant Agent
to the Company. The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the Company all monies
received by the Warrant Agent for the purchase of the Warrant Shares through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder by or from the Company available for
inspection by the Holders during normal business hours at its office. The
Company shall supply the Warrant Agent from time to time with such numbers of
copies of this Agreement as the Warrant Agent may request.
Section 11. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants or to any separation of the Warrants from the
Notes; provided, however, that the Company shall not be required to pay any tax
or taxes which may be payable in respect of any transfer involved in the issue
of any Warrant Certificates or any certificates for Warrant Shares in a name
other than that of the Holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such Warrant Certificates unless or until the
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Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
Section 12. Mutilated or Missing Warrant Certificates. In case
any of the Warrant Certificates shall be mutilated, lost, stolen or destroyed,
the Company may in its discretion issue and the Warrant Agent may countersign,
in exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
reasonably satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may prescribe.
Section 13. Reservation of Warrant Shares. The Company will at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
The transfer agent for the Common Stock (the "TRANSFER AGENT")
and every subsequent transfer agent for any shares of the Company's Capital
Stock issuable upon the exercise of any of the rights of purchase aforesaid will
be irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's Capital Stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from
such Transfer Agent the stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company will supply such Transfer Agent with duly executed certificates for
such purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 17. The Company will furnish such Transfer Agent
a copy of all notices of adjustments and certificates related thereto,
transmitted to each Holder of the Warrants pursuant to Section 18 hereof. Prior
to the initial underwritten public offering of Capital Stock of the Company, the
Company may act as Transfer Agent for the Common Stock. The Warrant Agent hereby
agrees that it will not issue any stock certificates delivered hereunder other
than upon the exercise of Warrants in accordance with the terms of this
Agreement and, promptly after the issuance of any such stock certificates, to
notify the Transfer Agent of such issuance.
Before taking any action which would cause an adjustment
pursuant to Section 15 hereof that would reduce the Exercise Price below the
then par value (if any) of the Warrant Shares, the Company will take any
corporate action which may, in the opinion of its counsel (which may be counsel
employed by the Company), be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants in accordance with the terms of this Agreement
(including the payment of the
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Exercise Price) will, upon issue, be duly and validly issued, fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issue thereof.
Section 14. Obtaining Stock Exchange Listings. The Company
will from time to time use its best efforts to take all action which may be
necessary so that the Warrant Shares, immediately upon their issuance upon the
exercise of Warrants, will be listed on the principal securities exchanges and
markets (including, without limitation, the Nasdaq National Market) within the
United States of America, if any, on which other shares of Common Stock are then
listed. Upon the listing of such Warrant Shares, the Company shall notify the
Warrant Agent in writing. The Company will obtain and keep all required permits
and records in connection with such listing.
Section 15. Adjustment of Exercise Price and Number of Warrant
Shares Issuable. The number and kind of shares issuable upon exercise of a
Warrant and the Exercise Price shall be subject to adjustment from time to time
as follows:
15.1 Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of Common Stock, (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (D) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the Exercise Price in effect and the number of
Warrant Shares issuable upon exercise of each Warrant immediately prior to such
action shall be adjusted so that the Holder of any Warrant thereafter exercised
shall be entitled to receive the number of shares of capital stock of the
Company which such Holder would have owned immediately following such action had
such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this Section 15.1 shall become effective immediately after the
record date in the case of a dividend and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this Section
15.1, the Holder of any Warrant thereafter exercised shall become entitled to
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company (whose determination shall be conclusive) shall
determine the allocation of the adjusted Exercise Price between or among shares
of such classes of capital stock.
15.2 Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in Section 15.1 and 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 subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger or acquisition in which the Company is the continuing corporation
and which does not result in any reclassification or change of the then
outstanding shares of Common Stock or other capital stock issuable upon exercise
of the Warrants) or in case of any sale or conveyance to another corporation of
the property of the Company as an entirety or substantially as an entirety,
then, as a condition of such reclassification, change, consolidation, merger,
sale or conveyance, the Company or such a successor or purchasing corporation,
as the case may be, shall forthwith make lawful and adequate provision whereby
the Holder of each Warrant then outstanding shall have the right thereafter to
receive on exercise of such Warrant the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance
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equivalent in value to the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance and enter into a supplemental warrant
agreement so providing. Such provisions shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 15. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental warrant agreement is an affiliate of
the formed, surviving or transferee corporation, that issuer shall join in the
supplemental warrant agreement. The above provisions of this Section 15.2 shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
15.3 Issuance of Options or Convertible Securities. In the event
the Company shall, at any time or from time to time after the date hereof,
issue, sell, distribute or otherwise grant in any manner (including by
assumption) to all holders of the Common Stock any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, Common Stock (any such
rights, warrants or options being referred to herein as "OPTIONS") or any stock
or securities convertible into or exchangeable for Common Stock (any such
convertible or exchangeable stock being referred to herein as "CONVERTIBLE
SECURITIES") or any Convertible Securities (other than upon exercise of any
Option), whether or not such Options or the rights to convert or exchange such
Convertible Securities are immediately exercisable, and the price per share at
which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the aggregate amount, if any, received or receivable by the Company as
consideration for the issuance, sale, distribution or granting of such Options
or any such Convertible Security, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise of
all such Options or upon conversion or exchange of all such Convertible
Securities, plus, in the case of Options to acquire Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable upon the
conversion or exchange of all such Convertible Securities, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of all such
Options or upon the conversion or exchange of all such Convertible Securities or
upon the conversion or exchange of all Convertible Securities issuable upon the
exercise of all such Options) shall be less than the Current Market Price per
share of Common Stock on the record date for the issuance, sale, distribution or
granting of such Options or Convertible Securities (any such event being herein
called a "DISTRIBUTION"), then, effective upon such Distribution, (I) the
Exercise Price shall be reduced to the price (calculated to the nearest 1/1,000
of one cent) determined by multiplying the Exercise Price in effect immediately
prior to such Distribution by a fraction, the numerator of which shall be the
sum of (i) the number of shares of Common Stock outstanding (exclusive of any
treasury shares) immediately prior to such Distribution multiplied by the
Current Market Price per share of Common Stock on the date of such Distribution
plus (ii) the consideration, if any, received by the Company upon such
Distribution, and the denominator of which shall be the product of (A) the total
number of shares of Common Stock outstanding (exclusive of any treasury shares)
immediately after such Distribution multiplied by (B) the Current Market Price
per share of Common Stock on the record date for such Distribution and (II) the
number of shares of Common Stock purchasable upon the exercise of each Warrant
shall be increased to a number determined by multiplying the number of shares of
Common Stock so purchasable immediately prior to the record date for such
Distribution by a fraction, the numerator of which shall be the Exercise Price
in effect immediately prior to the adjustment required by clause (i) of this
sentence and the denominator of which shall be the Exercise Price in effect
immediately after such adjustment. For purposes of the foregoing, the total
maximum number of shares of Common Stock issuable upon exercise of all such
Options or upon conversion or exchange of all such Convertible Securities or
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upon the conversion or exchange of the total maximum amount of the Convertible
Securities issuable upon the exercise of all such Options shall be deemed to
have been issued as of the date of such Distribution and thereafter shall be
deemed to be outstanding and the Company shall be deemed to have received as
consideration therefor such price per share, determined as provided above.
Except as provided in Sections 15.10 and 15.11 below, no additional adjustment
of the Exercise Price shall be made upon the actual exercise of such Options or
upon conversion or exchange of the Convertible Securities or upon the conversion
or exchange of the Convertible Securities issuable upon the exercise of such
Options.
15.4 Dividends and Distributions. In the event the Company shall,
at any time or from time to time after the date hereof, distribute to all the
holders of Common Stock any dividend or other distribution of cash, evidences of
its indebtedness, other securities or other properties or assets (in each case
other than (i) dividends payable in Common Stock, Options or Convertible
Securities and (ii) any cash dividend or other cash distributions from current
or retained earnings), or any options, warrants or other rights to subscribe for
or purchase any of the foregoing, then (A) the Exercise Price shall be decreased
to a price determined by multiplying the Exercise Price then in effect by a
fraction, the numerator of which shall be the Current Market Price per share of
Common Stock on the record date for such distribution less the sum of (X) the
cash portion, if any, of such distribution per share of Common Stock outstanding
(exclusive of any treasury shares) on the record date for such distribution plus
(Y) the then fair market value (as determined in good faith by the Board of
Directors of the Company) per share of Common Stock outstanding (exclusive of
any treasury shares) on the record date for such distribution of that portion,
if any, of such distribution consisting of evidences of indebtedness, other
securities, properties, assets, options, warrants or subscription or purchase
rights, and the denominator of which shall be such Current Market Price per
share of Common Stock and (B) the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock so purchasable immediately
prior to the record date for such distribution by a fraction, the numerator of
which shall be the Exercise Price in effect immediately prior to the adjustment
required by clause (A) of this sentence and the denominator of which shall be
the Exercise Price in effect immediately after such adjustment. The adjustments
required by this Section 15.4 shall be made whenever any such distribution
occurs retroactive to the record date for the determination of stockholders
entitled to receive such distribution.
15.5 Adjustment for Sale of Common Stock Below Current Market
Price. If, after the date hereof, the Company sells any Common Stock or any
securities convertible into or exchangeable or exercisable for the Common Stock
(other than (i) pursuant to the exercise of the Warrants, (ii) any security
convertible into, or exchangeable or exercisable for, the Common Stock as to
which the issuance thereof has previously been the subject of any required
adjustment pursuant to this Section 15, (iii) the issuance of Common Stock upon
the conversion, exchange or exercise of convertible, exchangeable or exercisable
securities of the Company outstanding on the date of this Agreement (to the
extent in accordance with the terms of such securities as in effect on the date
of this Agreement) or (iv) Excluded Securities) at a price per share less than
the Current Market Price, the Exercise Price shall be adjusted in accordance
with the formula:
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E5 = E x (O + N)
--------------------
(O+(N x P/M))
where:
E' = the adjusted Exercise Price;
E = the current Exercise Price;
O = the number of shares of Common Stock outstanding on the date of
sale of Common Stock at a price per share less than the Current
Market Price to which this Section 15.5 applies;
N = the number of shares of Common Stock so sold or the maximum
stated number of shares of Common Stock issuable upon the
conversion, exchange, or exercise of any such convertible,
exchangeable or exercisable securities, as the case may be;
P = the offering price per share pursuant to any such convertible,
exchangeable or exercisable securities so sold or the sale price
of the shares so sold, as the case may be; and
M = the Current Market Price as of the Time of Determination or at
the time of sale, as the case may be.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, warrants or options to which this Section 15.5 applies or upon
consummation of the sale of Common Stock, as the case may be. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Exercise Price shall be readjusted to the Exercise Price which
would otherwise be in effect had the adjustment made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Exercise Price shall again be adjusted to be the
Exercise Price which would then be in effect if such date fixed for
determination of stockholders entitled to receive such rights or warrants had
not been so fixed.
No adjustment shall be made under this Section 15.5 if (I) the
application of the formula stated above in this Section 15.5 would result in a
value of E' that is lower than the value of E or (II) such adjustment would
require an increase or decrease of less than 1% to the Exercise Price; provided,
that any adjustment not made as a result of this clause (II) shall be carried
forward and included in the next adjustment required to be made hereunder.
Except as provided in Sections 15.10 and 15.11 below, no adjustment of the
Exercise Price shall be made upon the actual conversion or exchange of the
Convertible Securities.
15.6 Current Market Price. For the purpose of any computation of
Current Market Price under this Section 15 and Section 17, the Current Market
Price per share of Common Stock at any date shall be (x) for purposes of Section
17, the closing price on the business day immediately prior to the exercise of
the applicable Warrant pursuant to Section 10 and (y) in all other cases, the
average of the daily closing prices for the shorter of (i) the 20 consecutive
trading days ending on the last full trading day on the exchange or market
specified in the second succeeding sentence prior to the Time of Determination
(as defined below) and (ii) the period
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commencing on the date next succeeding the first public announcement of the
issuance, sale, distribution or granting in question through such last full
trading day prior to the Time of Determination. The term "TIME OF DETERMINATION"
as used herein shall be the time and date of the earlier to occur of (A) the
date as of which the Current Market Price is to be computed and (B) the last
full trading day on such exchange or market before the commencement of
"ex-dividend" trading in the Common Stock relating to the event giving rise to
the adjustment required by Sections 15.1, 15.2, 15.3 or 15.4. The closing price
for any day shall be the last reported sale price regular way or, in case no
such reported sale takes place on such day, the average of the closing bid and
asked prices regular way for such day, in each case (1) on the principal
national securities exchange on which the shares of Common Stock are listed or
to which such shares are admitted to trading or (2) if the Common Stock is not
listed or admitted to trading on a national securities exchange, in the
over-the-counter market as reported by Nasdaq National Market or any comparable
system or (3) if the Common Stock is not listed on Nasdaq National Market or a
comparable system, as furnished by two members of the NASD selected from time to
time in good faith by the Board of Directors of the Company for that purpose. In
the absence of all of the foregoing, or if for any other reason the Current
Market Price per share cannot be determined pursuant to the foregoing provisions
of this Section 15.6, the Current Market Price per share shall be the fair
market value thereof as determined in good faith by the Board of Directors of
the Company.
15.7 Certain Distributions. If the Company shall pay a dividend or
make any other distribution payable in Options or Convertible Securities, then,
for purposes of Section 15.4 above, such Options or Convertible Securities shall
be deemed to have been issued or sold without consideration.
15.8 Consideration Received. If any shares of Common Stock, Options
or Convertible Securities shall be issued, sold or distributed for a
consideration other than cash, the amount of the consideration other than cash
received by the Company in respect thereof shall be deemed to be the then fair
market value of such consideration (as determined in good faith by the Board of
Directors of the Company). If any Options shall be issued in connection with the
issuance and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
without consideration; provided, however, that if such Options have an exercise
price equal to or greater than the Current Market Price of the Common Stock on
the date of issuance of such Options, then such Options shall be deemed to have
been issued for consideration equal to such exercise price.
15.9 Deferral of Certain Adjustments. No adjustment to the Exercise
Price (including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
of the Exercise Price; provided that any adjustments which by reason of this
Section 15.9 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. No adjustment need be made for a change in
the par value of the Common Stock. All calculations under this Section 15 shall
be made to the nearest 1/1,000 of one cent or to the nearest 1/1000 of a share,
as the case may be.
15.10 Changes in Options and Convertible Securities. If the exercise
price provided for in any Options referred to in Section 15.5 above, the
additional consideration, if any, payable upon
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the conversion or exchange of any Convertible Securities referred to in Sections
15.3 or 15.5 above, or the rate at which any Convertible Securities referred to
in Sections 15.3 or 15.5 above are convertible into or exchangeable for Common
Stock shall change at any time (other than under or by reason of provisions
designed to protect against dilution upon an event which results in a related
adjustment pursuant to this Section 15), the Exercise Price then in effect and
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall forthwith be readjusted (effective only with respect to any
exercise of any Warrant after such readjustment) to the Exercise Price and
number of shares of Common Stock so purchasable that would then be in effect had
the adjustment made upon the issuance, sale, distribution or granting of such
Options or Convertible Securities been made based upon such changed purchase
price, additional consideration or conversion rate, as the case may be, but only
with respect to such Options and Convertible Securities as then remain
outstanding.
15.11 Expiration of Options and Convertible Securities. If, at any
time after any adjustment to the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall have been made pursuant to Sections
15.3, 15.5 or 15.10 above or this Section 15.11, any Options or Convertible
Securities shall have expired unexercised, the number of such shares so
purchasable shall, upon such expiration, be readjusted and shall thereafter be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
shares of Common Stock deemed to have been issued in connection with such
Options or Convertible Securities were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or Convertible
Securities and (ii) such shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale, distribution or granting of all such Options or Convertible
Securities, whether or not exercised; provided that no such readjustment shall
have the effect of decreasing the number of such shares so purchasable by an
amount (calculated by adjusting such decrease to account for all other
adjustments made pursuant to this Section 15 following the date of the original
adjustment referred to above) in excess of the amount of the adjustment
initially made in respect of the issuance, sale, distribution or granting of
such Options or Convertible Securities.
15.12 Other Adjustments. In the event that at any time, as a result
of an adjustment made pursuant to this Section 15, the Holders shall become
entitled to receive any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Exercise Price applicable to such exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Common Stock contained in this Section 15.
15.13 No Adjustment Required. Without limiting any other exception
contained in this Section 15, and in addition thereto, no adjustment will be
made for:
(i) exercises or conversions of any Options or Convertible
Securities outstanding on the date hereof;
(ii) issuances of Options, Convertible Securities or Common
Stock to employees, directors or consultants of the Company or any of its
subsidiaries pursuant to a plan approved by the Board of Directors of the
Company;
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(iii) rights to purchase Common Stock pursuant to a Company
plan for reinvestment of dividends or interest;
(iv) issuances of Options, Convertible Securities or Common
Stock in bona fide public offerings or private placements pursuant to Section
4(2) of the Securities Act, Regulation D thereunder or Regulation S, involving
at least one investment bank of national reputation;
(v) issuances of Options, Convertible Securities or Common
Stock in connection with the establishment of commercial bank facilities,
capital lease obligations or other issuances of primarily debt obligations or
securities; or
(vi) issuances of Excluded Securities.
No adjustment in the Exercise Price will be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Exercise Price, provided, however, that any adjustment which is not made will be
carried forward and taken into account in any subsequent adjustment. The
Exercise Price will in no event be less than the par value of the Common Stock;
provided, however, the foregoing minimum Exercise Price shall not be applicable
for purposes of determining adjustments to the number of shares issuable upon
exercise of a Warrant.
Section 16. Statement on Warrants. Irrespective of any
adjustment in the number or kind of shares issuable upon the exercise of the
Warrants or the Exercise Price, Warrants theretofore or thereafter issued may
continue to express the same number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 17. Fractional Interest. The Company shall not be
required to issue fractional shares of Common Stock on the exercise of Warrants.
If more than one Warrant shall be presented for exercise in full at the same
time by the same Holder, the number of full shares of Common Stock which shall
be issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock acquirable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section 17, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall direct the Transfer Agent to pay
an amount in cash calculated by it to equal the then Current Market Price per
share multiplied by such fraction computed to the nearest whole cent. The
Holders, by their acceptance of the Warrant Certificates, expressly waive any
and all rights to receive any fraction of a share of Common Stock or a stock
certificate representing a fraction of a share of Common Stock.
Section 18. Notices to Warrant Holders. Upon any adjustment of
the Exercise Price pursuant to Section 15, the Company shall promptly thereafter
(i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing selected by the Board of
Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered Holders of
the Warrant Certificates at his address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage
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prepaid. The Warrant Agent shall be entitled to rely on the above-referenced
accountant's certificate and shall be under no duty or responsibility with
respect to any such certificate, except to exhibit the same from time to time to
any Holder desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require any adjustment of
the number of shares of Common Stock or other stock or property issuable on
exercise of the Warrants or the Exercise Price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment or the validity or value (or the kind or amount) of
any shares of Common Stock or other stock or property which may be issuable on
exercise of the Warrants. The Warrant Agent shall not be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any shares of Common Stock or stock certificates or other common stock or
property upon the exercise of any Warrant.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or warrants;
or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock or
distributions referred to in Section 15 hereof); or
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (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 subdivision or combination), or a tender offer or exchange offer for
shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) a Change of Control occurs; then the Company shall cause
to be filed with the Warrant Agent and shall cause to be given to each of the
registered Holders of the Warrant Certificates at such Holder's address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (a) or (b) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up or Change of Control is expected to become effective or consummated, and the
date as of which it is expected that holders of record of shares of Common Stock
shall be entitled to exchange such shares for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up or Change of Control. The
failure to give the notice required by this Section 18 or any defect therein
shall not affect the legality or validity of any distribution,
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43
right, option, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or Change of Control or the vote upon
any action. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
Section 19. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent under
the provisions of Section 21. Any such successor Warrant Agent shall promptly
cause notice of its succession as Warrant Agent to be mailed (by first class
mail, postage prepaid) to each Holder at such Holder's last address as shown on
the register maintained by the Warrant Agent pursuant to this Agreement. In case
at the time such successor to the Warrant Agent shall succeed to the agency
created by this Agreement, and in case at that time any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent; and in case at that time any of the Warrant Certificates shall not have
been countersigned, any successor to the Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor Warrant Agent or in
the name of the successor to the Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
Section 20. Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.
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44
The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder of
any Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
The Warrant Agent shall incur no liability or responsibility
to the Company or to any Holder of any Warrant Certificate for any action taken
in reliance on any Warrant Certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper parry or parties.
The Company agrees to pay to the Warrant Agent such
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement as the parties shall agree from time to time, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and other charges
of any kind and nature reasonably incurred by the Warrant Agent in the execution
of this Agreement and to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, costs and counsel fees,
for anything done or omitted by the Warrant Agent in the execution of this
Agreement except as a result of its negligence or willful misconduct.
The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Holders of Warrant
Certificates shall furnish the Warrant Agent with security and indemnity
satisfactory to the Warrant Agent for any costs and expenses which may be
incurred, but this provision shall not affect the power of the Warrant Agent to
take such action as it may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or under any of
the Warrants may be enforced by the Warrant Agent without the possession of any
of the Warrant Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding instituted
by the Warrant Agent shall be brought in its name as Warrant Agent and any
recovery of judgment shall be for the ratable benefit of the Holders of the
Warrants, as their respective rights or interests may appear. No provision of
this Agreement shall require the Warrant Agent to expend or risk its own funds.
The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own negligence or willful
misconduct.
The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in
40
45
this Agreement, or to determine whether any facts exist which may require any of
such adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making the
same. The Warrant Agent shall not be accountable with respect to the validity or
value or the kind or amount of any Warrant Shares or of any securities or
property which may at any time be issued or delivered upon the exercise of any
Warrant or with respect to whether any such Warrant Shares or other securities
will when issued be validly issued and fully paid and nonassessable. and makes
no representation with respect thereto.
Section 21. Resignation and Removal of Warrant Agent;
Appointment of Successor. No resignation or removal of the Warrant Agent and no
appointment of a successor warrant agent shall become effective until the
acceptance of appointment by the successor warrant agent as provided herein. The
Warrant Agent may resign its duties and be discharged from all further duties
and liability hereunder (except liability arising as a result of the Warrant
Agent's own negligence or willful misconduct) after giving written notice to the
Company. The Company may remove the Warrant Agent upon written notice, and the
Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as aforesaid. The Warrant Agent shall,
at the Company's expense, cause to be mailed (by first class mail, postage
prepaid) to each Holder of a Warrant at such Holder's last address as shown on
the register of the Company maintained by the Warrant Agent a copy of said
notice of resignation or notice of removal, as the case may be. Upon such
resignation or removal, the Company shall appoint in writing a new warrant
agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation by the resigning
Warrant Agent or after such removal, then the resigning Warrant Agent or the
Holder of any Warrant may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a corporation doing business under the
laws of the United States or any state thereof, in good standing and having a
combined capital and surplus of not less than $50,000,000. The combined capital
and surplus of any such new warrant agent shall be deemed to be the combined
capital and surplus as set forth in the most recent annual report of its
condition published by such warrant agent prior to its appointment, provided
that such reports are published at least annually pursuant to law or to the
requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new warrant agent, it shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning or removed Warrant Agent.
Not later than the effective date of any such appointment, the Company shall
give notice thereof to the resigning or removed Warrant Agent. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation of the Warrant
Agent or the appointment of a new warrant agent, as the case may be.
Section 22. Reports.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Warrants are outstanding, the Company will
furnish to the holders of Warrants upon request (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms l0-Q and 10-K if the Company were required to file such
41
46
forms and (ii) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports, in
each case within the time periods specified in the Commissions rules and
regulations (the information and reports in clauses (i) and (ii), collectively,
"SEC REPORTS").
(b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all SEC Reports that the Warrant Agent may be
required to deliver to the Holders of the Warrants under this Section 22.
Section 23. Special Mandatory Redemption. The Company shall
redeem (and each of the Holders hereby agrees to sell) all of the Warrants if
and upon the earlier to occur of (i) five Business Days following termination of
the Merger Agreement in accordance with its terms and (ii) September 15, 1999,
if the transactions contemplated by the Merger Agreement have not been
consummated by such date at a redemption price in cash equal to $13.4633 per
Warrant. Upon consummation of the transactions contemplated by the Merger
Agreement, the provisions of this Section 23 shall be null and void.
Section 24. Notices to Company and Warrant Agent. Any notice
or demand authorized by this Agreement to be given or made by the Warrant Agent
or by the Holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
WinsLoew Escrow Corp.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Chief Financial Officer
with copies to:
Xxxxxxxxx & Xxxxxxx, P.A.
0000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the
Company or by the Holder(s) of any Warrant Certificate to the Warrant Agent
shall be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
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47
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Corporate Trust Trustee Administration
Section 25. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any Holders of Warrant Certificates in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way adversely affect the interests of the Holders of Warrant
Certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of Holders shall require the written consent of
Holders representing a majority of the then outstanding Warrants. The consent of
each Holder of a Warrant affected shall be required for any amendment pursuant
to which the Exercise Price would be increased or the number of Warrant Shares
purchasable upon exercise of Warrants would be decreased (other than pursuant to
adjustments provided for in Section 15 hereof or amendments to Section 15 which
can be made by the written consent of Holders representing a majority of the
then outstanding Warrants). The Warrant Agent shall be entitled to receive and,
subject to Section 20, shall be fully protected in relying upon, an officers'
certificate and opinion of counsel as conclusive evidence that any such
amendment or supplement is authorized or permitted hereunder, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms.
Section 26. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 27. Termination. This Agreement (other than any
party's obligations with respect to Warrants previously exercised and with
respect to indemnification under Section 20) shall terminate at 5:00 p.m., New
York City time on the Expiration Date.
Section 28. Governing Law. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PROVISIONS THEREOF
Section 29. Benefits of This Agreement.
(a) Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Warrant Agent and the Holders of the
Warrant Certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent and the Holders of the Warrant Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a
Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any
43
48
preemptive right, to receive any notice of meetings of stockholders for the
election of directors of the Company or any other matter or to receive any
notice of any proceedings of the Company, except as may be specifically provided
for herein. The Holders of the Warrants are not entitled to share in the assets
of the Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
(c) All rights of action in respect of this Agreement are
vested in the Holders of the Warrants, and any Holder of any Warrant, without
the consent of the Warrant Agent or the Holder of any other Warrant, may, on
such Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's rights hereunder,
including the right to exercise, exchange or surrender for purchase such
Holder's Warrants in the manner provided in this Agreement.
Section 30. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
[Signature Page Follows]
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49
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
WINSLOEW ESCROW CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
-------------------------
Title: Vice President
------------------------
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Name: Xxxxxx X. Xxxx
-------------------------
Title: Vice President
------------------------
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EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE WARRANT
AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 12 OF THE WARRANT AGREEMENT, (II) THIS
GLOBAL WARRANT MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
9(a) OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE
WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 9(h) OF THE WARRANT AGREEMENT
AND (IV) THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY.(1)
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR THE WARRANT AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 9 OF THE WARRANT AGREEMENT.(1)
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
--------------------------
(1) These paragraphs are to be included only if the Warrant is in global form.
X-0
00
XXXXXXXXX TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS WITHIN THE MEANING OF
SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
(d) FOLLOWING THE RELEASE OF PROCEEDS FROM THE ESCROW ACCOUNT, OUTSIDE THE
UNITED STATES TO A NON-UNITED STATES PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (e) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
UNTIL THE SEPARATION DATE (AS DEFINED), THIS WARRANT HAS BEEN ISSUED AS, AND
MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED 12 3/4% SENIOR
SUBORDINATED NOTES DUE 2007. EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT OF
NOTES AND A WARRANT TO PURCHASE 0.2298 SHARES OF COMMON STOCK, SUBJECT TO
ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY OF THE INDENTURE PURSUANT TO
WHICH THE NOTES HAVE BEEN ISSUED IS AVAILABLE FROM THE COMPANY UPON REQUEST.(2)
-----------------------------
(2) This paragraph to be included only until the Separation Date, as defined in
the Warrant Agreement.
A-2
52
WINSLOEW ESCROW CORP.
[CUSIP] [CINS] [ISIN) No. ________
No. ____________
WARRANTS TO PURCHASE COMMON SHARES
This certifies that Cede & Co., or its registered assigns, is
the owner of up to ________(3) Warrants, each of which initially represents the
right to purchase, after the earliest to occur (the "EXERCISABILITY DATE") of
(i) the Separation Date, (ii) the consummation of an underwritten public
offering of Capital Stock of the Company and (iii) the date that any class of
Capital Stock of WinsLoew Escrow Corp. (the "COMPANY") is listed on a national
securities exchange or authorized for quotation on the Nasdaq National Market or
is otherwise subject to registration under the Exchange Act , for 0.2298 shares
of the Common Stock, par value $.01 per share, of the Company (the "WARRANT
SHARES") at an exercise price (the "EXERCISE PRICE") of $.0l per Common Share
(subject to adjustment as provided in the Warrant Agreement referred to below),
upon surrender hereof at the office of American Stock Transfer & Trust Company,
or to its successor, as the warrant agent under the Warrant Agreement (any such
warrant agent being herein called the "WARRANT AGENT"), or such other location
contemplated by Section 24 of the Warrant Agreement, with the Subscription Form
on the reverse hereof duly executed, with signature guaranteed as therein
specified and simultaneous payment in full by Federal wire transfer to the
account designated by the Company or by certified or official bank or bank
cashier's check payable to the order of the Company. Notwithstanding the
foregoing, each Holder (as defined in the Warrant Agreement) may exercise its
right to receive Warrant Shares on a net basis, such that without the exchange
of any funds, the Holder receives that number of Warrant Shares otherwise
issuable upon exercise of its Warrants less that number of Warrant Shares having
a fair market value equal to the aggregate Exercise Price that would otherwise
have been paid by the Holder for the Warrant Shares being issued. At any time
after the Exercisability Date and on or before the Expiration Date, any
outstanding Warrants may be exercised on any Business Day; provided, however,
that a Registration Statement relating to the Warrants is, at the time of
exercise, effective and available for the exercise of Warrants or the exercise
of such Warrants is exempt from the registration requirements of the Securities
Act.
This Warrant Certificate is issued under and in accordance
with a Warrant Agreement dated August 24, 1999 (the "WARRANT AGREEMENT"),
between the Company and American Stock Transfer & Trust Company, as Warrant
Agent, and is subject to the Articles of Incorporation and Bylaws of the Company
and 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 terms of the Warrant Agreement are hereby incorporated herein by reference
and made a part hereof. Reference is hereby made to the Warrant Agreement for a
full description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Company and the Holders of the Warrants. The
summary of the terms of the Warrant Agreement contained in this
------------------------------------
(3) To evidence initially ___________ Warrants, subject to increase and decrease
in accordance with the Schedule of Exchanges related hereto maintained by the
Warrant Agent, and, in combination with the ________ Warrant number ______
identified by CUSIP No. ________, to equal 105,000 Warrants.
A-3
53
Warrant Certificate is qualified in its entirety by express reference to the
Warrant Agreement. All terms used in this Warrant Certificate that are defined
in the Warrant Agreement shall have the meanings assigned to them in such
agreements.
The number of Warrant Shares purchasable upon the exercise of
each Warrant and the price per share are subject to adjustment as provided in
the Warrant Agreement. Except as stated in the Warrant Agreement, in the event
the Company merges or consolidates with, or sells all or substantially all of
its assets to, another Person, each Warrant will, upon exercise, entitle the
Holder thereof to receive the number of shares of Capital Stock or other
securities or the amount of money and other property which the Holder of the
number of Warrant Shares (or other securities or property issuable upon exercise
of a Warrant) purchasable upon the exercise of the Warrant is entitled to
receive upon completion of such merger, consolidation or sale.
As to any final fraction of a share which the same Holder of
one or more Warrant Certificates would otherwise be entitled to purchase upon
exercise thereof in the same transaction, the Company may pay the cash value
thereof determined as provided in the Warrant Agreement.
All Warrant Shares issuable by the Company upon the exercise
of Warrants shall be validly issued, fully paid and not subject to any calls for
funds, and the Company 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 thereof upon exercise of Warrants (other than income taxes imposed on
the Holder). The Company 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 (including 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 the exercise of a Warrant
and in case of such transfer or payment, the Warrant Agent and the Company shall
not be required to issue any share certificate or pay any cash until such tax or
charge has been paid or it has been established to the Warrant Agent's and the
Company's satisfaction that no such tax or charge is due.
Subject to the restrictions on and conditions to transfer set
forth in Section 7 of the Warrant Agreement, this Warrant Certificate and all
rights hereunder are transferable by the registered Holder hereof, in whole or
in part, on the register of the Company maintained by the Warrant Agent for such
purpose at the Warrant Agent's office in New York, New York, upon surrender of
this Warrant Certificate duly endorsed, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Warrant Agent duly
executed, with signatures guaranteed as specified in the attached Form of
Assignment, by the registered Holder hereof or such Holder's attorney duly
authorized in writing and by such other documentation required pursuant to the
Warrant Agreement and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. Upon any partial transfer, the
Company will sign and issue and the Warrant Agent will countersign and deliver
to such Holder a new Warrant Certificate or Certificates with respect to any
portion not so transferred. Each taker and Holder of this Warrant Certificate,
by taking and holding the same, consents and agrees that prior to the
registration of transfer as provided in the Warrant Agreement, the Company and
the Warrant Agent may treat the Person in whose name the Warrants are registered
as the absolute owner hereof for any purpose and as the Person entitled to
exercise the rights represented hereby, any notice to the contrary
notwithstanding. Accordingly, the Company and/or the Warrant Agent shall not,
except as ordered by a court of competent jurisdiction as required by law, be
bound to
A-4
54
recognize any equitable or other claim to or interest in the Warrants on the
part of any Person other than such registered Holder, whether or not it shall
have express or other notice thereof.
This Warrant Certificate may be exchanged at the office of the
Warrant Agent maintained for such purpose in New York, New York, for Warrant
Certificates representing the same aggregate number of Warrants, each new
Warrant Certificate to represent such number of Warrants as the Holder hereof
shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the
Holder of this Warrant Certificate, as such, shall not be entitled to any rights
of a shareholder of the Company, including, without limitation, the right to
vote or to consent to any action of the shareholders, to receive any
distributions, to exercise any pre-emptive right or to receive any notice of
meetings of shareholders, and shall not be entitled to receive any notice of any
proceedings of the Company except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights
evidenced hereby shall cease on August 15, 2007, unless sooner terminated by the
liquidation, dissolution or winding-up of the Company or as otherwise provided
in the Warrant Agreement upon the consolidation or merger of the Company with,
or sale of the Company to, another Person or unless such date is extended as
provided in the Warrant Agreement.
This Warrant Certificate shall not be valid for any purpose
until it shall have been countersigned by the Warrant Agent.
WINSLOEW ESCROW CORP.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
By:
--------------------------------
Authorized Signatory
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SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: American Stock Transfer & Trust Company,
as Warrant Agent
00 Xxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
The undersigned irrevocably exercises _________ of the
Warrants represented by this Warrant Certificate and herewith makes payment of $
_________ (such payment being by Federal wire transfer to the account designated
by WinsLoew Escrow Corp. or by certified or official bank or bank cashier's
check payable to the order or at the direction of WinsLoew Escrow Corp.), or
each Holder may exercise its right to receive Warrant Shares on a net basis,
such that without the exchange of any funds, the Holder receives that number of
Warrant Shares otherwise issuable upon exercise of its Warrants less that number
of Warrant Shares having a fair market value equal to the aggregate Exercise
Price that would otherwise have been paid by the Holder for the Warrant Shares
being issued, all at the exercise price and on the terms and conditions
specified in this Warrant Certificate and in the Warrant Agreement and the
Warrant Registration Rights Agreement referred to herein and surrenders this
Warrant Certificate and all right, title and interest therein to and directs
that the Common Stock, par value $0.01 per share, of WinsLoew Escrow Corp.
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.
Dated:
--------------
-----------------------------------------------
(Signature of Owner)
-----------------------------------------------
(Street Address)
-----------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
-----------------------------------------------
A-6
56
--------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the Warrant
Agent, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Warrant Agent in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
Securities and/or check or other property to be issued or delivered to:
Please insert social security or identifying number:
-----------------------
Name:
---------------------------------------------
Street Address:
------------------------------------
City, State and Zip Code:
--------------------------
A-7
57
FORM OF ASSIGNMENT
In consideration of monies or other valuable consideration
received from the Assignee(s) named below, the undersigned registered Holder of
this Warrant Certificate hereby sells, assigns, and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by this Warrant Certificate not
being assigned hereby) all of the right of the undersigned under this Warrant
Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s):
---------------------------------------------------
Address:
------------------------------------------------------------------
No. of Warrants:
----------------------------------------------------------
Please insert social security or other identifying number of assignee(s):
and does hereby irrevocably constitute and appoint _________________________ the
undersigned's attorney to make such transfer on the books of___________________
maintained for the purposes, with full power of substitution in the premises.
In connection with any transfer of Warrants, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[ ] (a) these Warrants are being transferred in compliance with the
exemption from registration under the United States Securities
Act of 1933, as amended, provided by Rule 144A thereunder.
or
[ ] (b) these Warrants are being transferred other than in accordance
with (a) above and documents are being furnished which comply
with the conditions of transfer set forth in this Warrant
Certificate and the Warrant Agreement.
or
[ ] (c) these Warrants are being transferred pursuant to an effective
registration statement under the United States Securities Act
of 1933, as amended.
If none of the foregoing boxes is checked, the Warrant Agent
shall not be obligated to register the Warrants in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 9 of the Warrant Agreement shall
have been satisfied.
Dated:
---------------------
A-8
58
----------------------------------------------
(Signature of Owner)
----------------------------------------------
(Street Address)
----------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
----------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Warrant Agent, which requirements
include membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee
program" as may be determined by the Warrant
Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-9
59
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
the Warrant(s) for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the United
States Securities Act of 1933, as amended, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding WinsLoew Escrow Corp. as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
--------------------
--------------------------------------------------
[NOTE: To be executed by an executive officer]
A-10
60
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(4)
The following exchanges of a part of this Global Warrant for
certificated Warrants have been made:
Date of Exchange Amount of decrease Amount of increase Number of Warrants Signature of
in Number of in Number of of this Global authorized
Warrants of this Warrants of this Warrant following signatory of
Global Warrant Global Warrant such decrease Warrant Agent
(or increase)
-------------------------------------------------------------------------------------------------------------
----------------------
(4) This is to be included only if the Warrant is in global form.
A-11
61
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "WARRANTS") of WINSLOEW ESCROW
CORP.
This Certificate relates to ____ Warrants held in* ___
book-entry or* certificated form by __________________________________________
(the "TRANSFEROR").
The Transferor:*
[ ] has requested the Warrant Agent by written order to
deliver, in exchange for its beneficial interest in the Global Warrant held by
the Depositary, a Warrant or Warrants in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Warrant (or the portion thereof indicated above); or
[ ] has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in Section 9 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "SECURITIES ACT") because:
[ ] Such Warrant is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 9(b)(i)(A) or Section
9(c)(y)(i) of the Warrant Agreement).
[ ] Such Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act), in
accordance with Rule 144A.
[ ] Such Warrant is being transferred pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act.
[ ] Such Warrant is being transferred to an institutional
"accredited investor," within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act.
[ ] Such Warrant is being transferred in accordance with Rule
904 under the Securities Act.
B-1
62
[ ]Such Warrant is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904 under the Securities
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate.
----------------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-------------------------------------------------
Date:
-------------
B-2
