EXECUTION VERSION
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WARRANT AGREEMENT
Dated as of July 8, 1998
Between
EPIC WARRANT CO.,
as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Warrant Agent
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WARRANT AGREEMENT (the "Agreement"), dated as of July 8, 1998,
between Epic Warrant Co., a Delaware corporation (together with any
successors and assigns, the "Company"), and United States Trust Company of
New York, a New York banking corporation, as Warrant Agent (the "Warrant
Agent").
WHEREAS, Epic Resorts, LLC, a Delaware limited liability company
("Epic") proposes, among other things, to issue and sell pursuant to a
Purchase Agreement, dated as of June 30, 1998 (the "Purchase Agreement"),
among Epic, Epic Capital Corp., Epic's other subsidiaries and NatWest Capital
Markets Limited ("NatWest"), as Initial Purchaser, 130,000 Units (the
"Units") consisting of $130,000,000 principal amount of 13% Senior Secured
Notes due 2005 (the "Notes") and, at the Initial Purchaser's election, either
(i) warrants (the "LLC Warrants") to purchase membership interests (together
with any successor securities, the "Membership Interests") in Epic, or (ii)
warrants (the "Warrants") to purchase shares of common stock (together with
any successor securities, the "Common Stock" and the shares of Common Stock
issuable upon exercise of the Warrants being referred to herein as the
"Warrant Shares"), of the Company;
WHEREAS, each Unit will represent $1,000 principal amount of Notes
and, in the case of the LLC Warrants, one LLC Warrant to purchase one
Membership Interest representing 0.000077% of the total membership interests
of Epic outstanding on the date hereof or, in the case of the Warrants, one
warrant to purchase one share of Common Stock;
WHEREAS, Epic proposes to issue to the Company warrants (the
"Company LLC Warrants") for the purchase of Membership Interests with the
same terms as the LLC Warrants in the same number as the number of Warrants
issued by Warrant Co.;
WHEREAS, the Company wishes the Warrant Agent to act on behalf of
the Company and the Warrant Agent is willing to act in connection with the
issuance, division, transfer, exchange and exercise of Warrants as provided
herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein, the Company and the Warrant Agent hereby agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions hereinafter set forth in this Agreement, and the Warrant
Agent hereby accepts such appointment, subject to the terms and conditions
hereof.
SECTION 2. WARRANT CERTIFICATES. The Warrants will be initially
issued in registered form as physical Warrant certificates (the "Physical
Warrants"). Any certificates (the "Warrant Certificates") evidencing the
Physical Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in EXHIBIT A attached hereto. Such
Warrant Certificates 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. Any endorsement of
a Warrant Certificate to reflect the amount of any increase
or decrease in the amount of outstanding Warrants represented thereby shall
be made by the Warrant Agent in accordance with instructions given by the
Holder thereof.
SECTION 3. EXECUTION OF WARRANT CERTIFICATES. (a) Warrant
Certificates shall be signed on behalf of the Company by its President. Each
such signature upon the Warrant Certificates may be in the form of a
facsimile signature of the present or any future President 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 at the time of affixing such signature be President notwithstanding
the fact that at the time the Warrant Certificates shall be countersigned and
delivered or disposed of he shall have ceased to hold such office.
(b) 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 Warrant Agreement any such person was not such officer.
(c) Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
SECTION 4. REGISTRATION AND COUNTERSIGNATURE. (a) The Warrants
shall be numbered and shall be registered on the books of the Company
maintained at the principal office of the Warrant Agent in the Borough of
Manhattan, City of New York (the "Warrant Register") as they are issued.
(b) 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 instructions of the President, a Vice
President, or a Secretary or an Assistant Secretary of the Company, initially
countersign and deliver Warrants entitling the holders thereof to purchase
not more than an aggregate of 130,000 Warrant Shares and shall thereafter
countersign and deliver Warrants as otherwise provided in this Agreement.
(c) The Company and the Warrant Agent may deem and treat the
registered holders (the "Holders") of the Warrant Certificates as the
absolute owners 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.
SECTION 5. TRANSFER AND EXCHANGE OF WARRANTS. (a) The Warrant
Agent shall from time to time, subject to the limitations of Section 6,
register the transfer of any outstanding Warrants upon the records to be
maintained by it for that purpose, upon surrender thereof duly endorsed or
accompanied (if so required by it) by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly executed by the
registered Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney.
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(b) Subject to the terms of this Agreement, each Warrant
Certificate may be exchanged for another certificate or certificates
entitling the Holder thereof to purchase a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle each
Holder to purchase. Any Holder desiring to exchange a Warrant Certificate or
Certificates shall make such request in writing delivered to the Warrant
Agent, and shall surrender, duly endorsed or accompanied (if so required by
the Warrant Agent) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, the Warrant Certificate or Certificates to
be so exchanged. The Warrant Certificates may be exchanged at the option of
the Holder thereof, when surrendered at the office or agency of the Company
maintained for such purpose, which initially will be the corporate trust
office of the Warrant Agent in New York, New York.
(c) Upon registration of transfer or exchange, the Warrant Agent
shall countersign and deliver by hand, certified mail or by such other method
as the Warrant Agent shall reasonably determine a new Warrant Certificate or
Certificates to the persons entitled thereto. No service charge shall be made
for any exchange or registration of transfer of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other
tax or other governmental charge that is imposed in connection with any such
exchange or registration of transfer.
SECTION 6. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF PHYSICAL WARRANTS. When Physical
Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Physical Warrants; or
(ii) to exchange such Physical Warrants for an equal number of
Physical Warrants of other authorized denominations or for LLC Warrants in the
proportionate amount represented by such Warrant, the Warrant Agent shall,
subject to Section 5, register the transfer or make the exchange as requested if
the requirements under this Agreement as set forth in this Section 6 for such
transactions are met; PROVIDED, HOWEVER, that the Physical Warrants presented or
surrendered for registration of transfer or exchange;
(a) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Warrant Agent, duly executed by
the Holder thereof or his attorney duly authorized in writing; and
(b) in the case of Physical Warrants the offer and sale of which
have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), such Physical Warrants shall be accompanied by
the following additional information and documents, as applicable:
(1) if such Physical Warrants are 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); or
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(2) if such Physical Warrants are being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act (a "Qualified Institutional Buyer")) in accordance
with Rule 144A under the Securities Act, a certificate to that
effect (in substantially the form of EXHIBIT B hereto); or
(3) if such Physical Warrants are being transferred to an
institutional "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor")), delivery of a certification to that effect
(in substantially the form of EXHIBIT B hereto) and a Transferee
Certificate for Institutional Accredited Investors in substantially
the form of EXHIBIT C hereto; or
(4) if such Physical Warrants are being transferred in
reliance on Regulation S under the Securities Act ("Regulation S"),
delivery of a certification to that effect (in substantially the
form of EXHIBIT B hereto) and a Transferee Certificate for
Regulation S Transfers in substantially the form of EXHIBIT D
hereto and an opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(5) if such Physical Warrants are being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect (in substantially the form of EXHIBIT
B hereto) and an opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(6) if such Physical Warrants are being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in
substantially the form of EXHIBIT B hereto) and an opinion of
counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act.
(b) LEGENDS.
(i) For so long as transfer of a Warrant is not permitted without
registration under the Securities Act, each Warrant Certificate evidencing such
Warrant (and all Warrants issued in exchange therefor or substitution thereof)
shall bear a legend substantially to the following effect:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR A BENEFICIAL INTERST HEREIN,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER
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THE SECURITIES ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON, IS NOT
ACQUIRING THIS SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE
144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN
EFFECT WITH RESPECT TO SUCH TRANSFER, ON THE DATE OF THE TRANSFER
OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO EPIC WARRANT CO. (THE "ISSUER") OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE WARRANT AGENT), AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE AMOUNT OF SECURITIES AT THE TIME OF TRANSFER OF LESS THAN
250 WARRANTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE, BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (G) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER) AND IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE WARRANT AGREEMENT
CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
(ii) Each certificate representing Warrant Shares (and all shares of
Common Stock issued
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in exchange therefor or substitution therefor) shall bear a legend identical
to the legend set forth in clause (i) above.
(c) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF PHYSICAL
WARRANTS.
(i) To permit registrations of transfers and exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant Agent shall
countersign Physical Warrants.
(ii) All Physical Warrants issued upon any registration of transfer
or exchange of Physical Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Agreement as the Physical Warrants
surrendered upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such Warrant, and
neither the Warrant Agent nor the Company shall be affected by notice to the
contrary.
SECTION 7. SEPARATION OF WARRANTS; TERMS OF WARRANTS; EXERCISE OF
WARRANTS.
(a) The Notes and Warrants will be immediately separated upon sale
by the Initial Purchaser.
(b) Subject to the terms of this Agreement, each Holder shall have
the right, which may be exercised commencing the Business Day immediately
following the date of issuance and until 5:00 p.m., New York City time, on
June 15, 2005 (the "Expiration Date"), to receive from the Company upon the
exercise of each Warrant 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 (as hereinafter defined) then in
effect for such Warrant Shares. Each Warrant not exercised prior to 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.
(c) The initial price at which one Warrant Share shall be
purchasable upon exercise of a Warrant (the "Exercise Price") shall be $.01. A
Warrant may be exercised upon surrender at the office or agency of the Company
maintained for such purpose, which initially will be the corporate trust office
of the Warrant Agent in New York, New York, of the certificate or certificates
evidencing the Warrants to be exercised with the form of election to purchase on
the reverse thereof duly filled in and signed, which signature shall be
guaranteed by a participant in a recognized Signature Guarantee Medallion
Program, and upon payment to the Warrant Agent for the account of the Company of
the Exercise Price, as adjusted as herein provided, for the number of Warrant
Shares in respect to which such Warrants are then exercised. Payment of the
aggregate Exercise Price shall be made in cash or by certified or official bank
check to the order of the Company in immediately available funds.
(d) Subject to the provisions of Section 6 hereof, upon such
surrender of Warrants and payment of the Exercise Price, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the Holder and in such name or names as the Holder may
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designate a certificate or certificates for the number of Warrant Shares
issuable upon the exercise of such Warrants together with cash as provided in
Section 13; provided, however, that if any consolidation, merger or lease or
sale of assets is proposed to be effected by the Company as described in
Subsection 12(k), or a tender offer or an exchange offer for shares of Common
Stock of the Company shall be made, upon such surrender of Warrants and
payment of the Exercise Price as aforesaid, the Company shall, as soon as
possible, but in any event not later than two days, other than a Saturday or
Sunday or a day on which banking institutions in the State of New York are
not open for business ("Business Day") thereafter, issue and cause to be
delivered the number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence together with cash as
provided in Section 13. Such certificate or certificates 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.
EACH WARRANT SHALL BE EXERCISABLE ONLY IN FULL, AND NOT IN PART.
(e) All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Warrant Agent. Such canceled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner consistent with the Warrant
Agent's customary procedure for such disposal and in a manner reasonably
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and promptly pay to the Company all
monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder 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 8. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; 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, any certificates for Warrant Shares in
a name other than that of the registered Holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, or the exchange of any Warrant for a
LLC Warrant or the exchange of Warrant Shares for Membership Interests, and the
Company shall not be required to issue or deliver such Warrant Certificates, LLC
Warrants or Membership Interests unless or until the 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 9. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any
of the Warrant Certificates shall be mutilated, lost, stolen or destroyed,
the Company may at 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 satisfactory to the Company and the Warrant Agent of such
loss, theft or destruction of such Warrant Certificate and indemnity also
satisfactory to them. Applicants for such substitute Warrant Certificates
shall also comply with such other reasonable regulations and pay such other
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reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 10. RESERVATION OF WARRANT SHARES. (a) 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 an 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.
(b) The Company or, if appointed, 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 12. The Company
will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto transmitted to each Holder pursuant to Section 14
hereof.
(c) The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants made in accordance with the terms of this
Agreement will, upon payment of the Exercise Price therefor and issue, be
validly authorized and issued, fully paid, nonassessable, free of preemptive
rights and free from all taxes, liens, charges and security interests with
respect to the issuance thereof. The Company will take no action to increase
the par value of the Common Stock to an amount in excess of the Exercise
Price, and the Company will not enter into any agreements inconsistent with
the rights of Holders hereunder. The Company will use its best efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Agreement. The Company shall
not take any action reasonably within its control, including the hiring of a
broker to solicit exercises, which would render unavailable an exemption from
registration under the Securities Act which might otherwise be available with
respect to the issuance of Warrant Shares upon exercise of any Warrants.
SECTION 11. CERTAIN PROVISIONS RELATING TO LLC WARRANTS.
(a) The Company may issue additional Warrants from time to time to
any holder of a LLC Warrant upon such LLC Warrant holder's delivery to the
Company of the certificate or certificates evidencing such LLC Warrant, duly
endorsed or accompanied (if so required by the Warrant Agreement for the LLC
Warrants) by a written instrument or instruments of transfer to the Company in
form satisfactory to the warrant agent for the LLC Warrants, and duly executed
as required by the Company; provided that such LLC Warrant holder shall certify
to the Company and the warrant agent for the LLC Warrants that such transfer is
solely in exchange for a Warrant corresponding to the transferred LLC
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Warrant to be held by the Company. Upon satisfaction of the foregoing
conditions, the Company shall cause such transfer to be registered with the
warrant agent for the LLC Warrants and shall obtain a Company LLC Warrant in
exchange therefor.
(b) Upon any Holder's surrender of a Warrant Certificate for
transfer to the Company and request to hold the corresponding Membership
Interest directly, the Company shall surrender such corresponding Company LLC
Warrant to Epic for transfer to such Holder and, subject to Section 6, such
Warrant transfer shall be registered in accordance with this Section 11 and
the Holder's Warrant shall be cancelled; provided that such Holder shall certify
to the Company and Warrant Agent and to Epic and its warrant agent that such
transfer is solely for the purposes described in this Subsection 11(b).
(c) [RESERVED]
(d) In the event that the Company receives notice of any rights to
which it may be entitled to exercise or obligations it must comply with pursuant
to the LLC Warrants it holds, including, but not limited to, registrations of
securities of Epic, or transfers of Membership Interests, the Company shall, on
the same day such notice is received, notify each Holder and, if any action
shall be required of the Company as a holder of LLC Warrants, and it shall
request instructions from each Holder regarding the actions to be taken by the
Company that may affect the PRO RATA share of LLC Warrants corresponding to the
Holder's Warrant or Warrants (the "Instructions"). If the Company does not
receive Instructions from any Holder during the time period in which the
Instructions may be implemented, the Company will not act. In the event the
applicable transaction gives rise to any taxes, the Company shall deduct from
any distribution received by the Company the amount of all applicable taxes to
be paid by the Company arising out of or resulting from such transaction. In any
event, the Company shall exercise its rights as a holder of LLC Warrants in
proportion to the Holders' PRO RATA interests in the Common Stock issued or
issuable upon exercise of the Warrants.
(e) In the event that the Company receives a distribution from Epic
on any Membership Interests held by the Company, the Company will promptly
declare and pay a dividend on its Common Stock in an amount equal to the
distribution received from Epic less any amounts required to enable the Company
to pay any taxes imposed on the Company as a result of such distribution and
dividend, as determined by the Company's Board of Directors in its sole
discretion.
(f) Immediately after the due exercise of a Warrant by a Holder and
the payment of the Exercise Price in respect thereof, the Company shall exercise
one LLC Warrant held by it with the proceeds of the Exercise Price received by
the Company in respect of the Warrant so exercised by such Holder. A holder of
Warrant Shares shall have the right to require the Company to exchange the
Warrant Shares held by such holder for all corresponding Membership Interests
held by the Company by delivering to the Company the certificate or certificates
evidencing the Warrant Shares, duly endorsed or accompanied by a duly executed
written instrument or instruments of transfer in form acceptable to the Company
and a letter of instructions duly executed by such Holder requesting such
exchange. Upon receipt thereof, the Company shall cause the requisite Membership
Interests to be transferred to such Holder and registered in the transfer
records of Epic in accordance with Epic's membership agreement. No service
charge shall be imposed on any Holder in respect of any such exchange of Warrant
Shares for Membership Interests, but the Company may require payment of a sum
sufficient to cover any stamp or
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other tax or other governmental charge that is imposed in connection with any
such exchange.
SECTION 12. ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE. The
number of shares of Common Stock issuable upon the exercise of each Warrant (the
"Exercise Rate") is subject to adjustment from time to time upon the occurrence
of the events enumerated in this Section 12. The Exercise Rate shall initially
be one. Upon the occurrence of any adjustment to the exercise rate for the LLC
Warrants, the Company shall cause a corresponding adjustment in the Exercise
Rate hereunder.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(1) pays a dividend or makes a distribution of its Common
Stock in shares of its Common Stock or other capital stock of the
Company;
(2) subdivides, combines or reclassifies its outstanding
shares of Common Stock; or
(3) makes a distribution to all holders of its Common Stock
of rights, warrants or options to purchase Common Stock of the Company
at a price per share less than the Current Market Value (as defined in
Section 12(e)) at the Time of Determination (as defined below);
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter
exercised may receive the aggregate number and kind of shares of capital
stock of the Company which he would have owned immediately following such
action if such Warrant had been exercised immediately prior to such action;
provided, however, that notwithstanding the foregoing, upon the occurrence of
an event described in any of paragraphs (1) and (3) above, which otherwise
would have given rise to an adjustment, no adjustment shall be made if the
Company includes the Holders of Warrants in such distribution pro rata to the
number of shares of Common Stock issued and outstanding (after giving effect
to the Warrant Shares as if they were issued and outstanding).
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution (the "Time of Determination")
and immediately after the effective date in the case of a subdivision,
combination or reclassification.
If after an adjustment a Holder of a Warrant upon exercise of it
may receive shares of two or more classes of capital stock of the Company,
the Board of Directors of the Company shall determine the allocation of the
adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Stock in this Section.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) ADJUSTMENT FOR CERTAIN ISSUANCES OF COMMON STOCK. Subject to
Section 12(a), if the Company issues or sells shares of its Common Stock or
distributes any rights, options or warrants to all holders of its Common Stock
entitling them to purchase shares of Common Stock, or securities convertible
into or exchangeable for Common Stock (other than pursuant to the exercise of
the Warrants or issuance of Warrant Shares to a holder of Membership Interests
solely to accommodate such holder's
10
right to elect to hold Warrant Shares corresponding to such underlying
Membership Interest in lieu of holding such Membership Interest directly), at
a price per share less than the Current Market Value at the Time of
Determination, the Exercise Rate shall be adjusted in accordance with the
formula:
(0 + N)
---------------
E(1) = E x 0 + (N X P)
-----
M
where:
E(1) = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of
Determination of any such distribution.
0 = the number of Fully Diluted Shares (as defined in
Section 12(m)) outstanding on the Time of Determination
for any such issuance, sale or distribution.
N = the number of additional shares of Common Stock issued,
sold or issuable upon exercise of such rights, options
or warrants.
P = the price received in the case of any issuance or sale
of Common Stock or exercise price per share of such
rights, options or warrants.
M = the Current Market Value per share of Common Stock on
the Time of Determination for any such issuance, sale or
distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which any
such rights, options or warrants are exercisable, not all rights, options or
warrants shall have been exercised, the Warrant shall be immediately
readjusted to what it would have been if "N" in the above formula had been
the number of shares actually issued.
(c) ADJUSTMENTS FOR OTHER DISTRIBUTIONS. Subject to Section
12(a), if the Company distributes to all holders of its Common Stock (i) any
evidences of indebtedness of the Company, (ii) any assets of the Company
(excluding cash dividends or other cash distributions or distributions from
current or retained earnings other than any Extraordinary Cash Dividend and
excluding transfers of LLC Warrants pursuant to Section 11 hereof), or (iii)
any rights, options or warrants to acquire any of the foregoing or to acquire
any other securities of the Company, the Exercise Rate shall be adjusted in
accordance with the formula:
E(1) = E X M
-----
M - F
where:
E(1) = the adjusted Exercise Rate.
11
E = the Exercise Rate immediately prior to the Time of
Determination of such distribution.
M = the Current Market Value per share of Common Stock on
the record date mentioned below.
F = the fair market value on the record date mentioned below
of the indebtedness, assets, rights, options or warrants
distributable to one share of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the
distribution. If an adjustment is made pursuant to clause (iii) above of this
subsection 12(c) as a result of the issuance of rights, options or warrants
are exercisable, not all such rights, options or warrants shall have been
exercised, the Warrant shall be immediately readjusted as if "F" in the above
formula was the fair market value on the record date of the indebtedness or
assets actually distributed upon exercise of such rights, options or warrants
divided by the number of shares of Common Stock outstanding on the record
date. Notwithstanding the foregoing, provisions of this Subsection 12(c), (x)
an event which would otherwise give rise to an adjustment pursuant to this
Subsection 12(c) shall not give rise to such an adjustment if the Company
includes the Holders of the Warrants in such distribution pro rata to the
number of shares of Common Stock issued and outstanding after giving effect
to the Warrant Shares as if they were issued and outstanding and (y) no
adjustment shall be made pursuant to this Section 12(c) with respect to cash
dividends other than Extraordinary Cash Dividends.
This Subsection 12(c) does not apply to rights, options or warrants
referred to in Subsection 12(b).
(d) MERGER, CONSOLIDATION, ETC. If (x) the Company merges or
consolidates with, or sells all or substantially all of its property and
assets to, another person (other than an Affiliate of the Company) and
consideration is payable to holders of Common Stock in exchange for their
Common Stock in connection with such merger, consolidation or sale which
consists solely of cash, or (y) in the event of a dissolution, liquidation or
winding up of the Company, then the Holders of Warrants shall be entitled to
receive distributions on the date of such event on an equal basis with
holders of Common Stock (or other securities issuable upon exercise of the
Warrants) as if the Warrants had been exercised immediately prior to such
event, less the Exercise Price. Upon receipt of such payment, if any, the
rights of a holder shall terminate and cease and his or her Warrants shall
expire. In case of any such merger, consolidation or sale of assets, the
surviving or acquiring person and, in the event of any dissolution,
liquidation or winding up of the Company, the Company shall deposit promptly
with the Warrant Agent the funds, if any, necessary to pay the Holders of the
Warrants. After receipt of such deposit from such person or the Company and
after receipt of surrendered Warrant Certificates, the Warrant Agent shall
make payment by delivering a check in such amount as is appropriate (or, in
the case of consideration other than cash, such other consideration as is
appropriate) to such person or persons as it may be directed in writing by
the holder surrendering such Warrants.
(e) CURRENT MARKET VALUE. "Current Market Value" per share of
Common Stock or of any other security (herein collectively referred to as a
"Security") at any date shall be:
12
(i) if the Security is not registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (a) the value of
the Security determined in good faith by the Board of Directors of the
Company and certified in a board resolution, based on the most recently
completed arm's length transaction between the Company and a person
other than an Affiliate of the Company in which such determination is
necessary and the closing of which occurs on such date or shall have
occurred within the six months preceding such date, (b) if no such
transaction shall have occurred on such date or within such six-month
period, the value of the Security most recently determined as of a date
within the six months preceding such date by an Independent Financial
Expert or (c) if neither clause (a) nor (b) is applicable, the value of
the Security determined as of such date by an Independent Financial
Expert, or
(ii) if the Security is registered under the Exchange Act, the
average of the daily market prices for each Business Day during the
period commencing 15 Business Days before such date and ending on the
date one day prior to such date or, if the Security has been registered
under the Exchange Act for less than 15 consecutive Business Days before
such date, then the average of the daily market prices for all of the
Business Days before such date for which daily market prices are
available. If the market price is not determinable for at least 10
Business Days in such period, the Current Market Value of the Security
shall be determined as if the Security was not registered under the
Exchange Act.
The "market price" for any Security on each Business Day means: (A) if
such Security is listed or admitted to trading on any securities exchange, the
closing price, regular way, on such day on the principal exchange on which such
Security is traded, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, (B) if such Security is not then
listed or admitted to trading on any securities exchange, the last reported sale
price on such day, or if there is no such last reported sale price on such day,
the average of the closing bid and the asked prices on such day, as reported by
a reputable quotation source designated by the Company, or (C) if neither clause
(A) nor (B) is applicable, the average of the reported high bid and low asked
prices on such day, as reported by a reputable quotation service, or a newspaper
of general circulation in the Borough of Manhattan, City of New York,
customarily published on each Business Day, designated by the Company. If there
are no such prices on a Business Day, then the market price shall not be
determinable for such Business Day.
"Independent Financial Expert" shall mean (a) NatWest (or any
successor) or (b) another nationally recognized investment banking firm, a
nationally recognized regional investment banking firm or a nationally
recognized accounting firm selected by the Company reasonably acceptable to the
Warrant Agent (i) that does not (and whose directors, officers, employees and
Affiliates do not) have a direct or indirect material financial interest in the
Company or Epic, (ii) that has not been, and, at the time it is called upon to
serve as an Independent Financial Expert under this Agreement is not (and none
of whose directors, officers, employees or Affiliates is) a promoter, director
or officer of the Company, (iii) that has not been retained by the Company or
Epic for any purpose, other than to perform an equity valuation, within the
preceding twelve months, and (iv) that, in the reasonable judgment of the Board
of Directors of the Company (certified by a board resolution), is otherwise
qualified to serve as an independent financial advisor. Any such person may
receive customary compensation and indemnification by the Company for opinions
or services it provides as an Independent Financial Expert.
13
"Affiliate" shall mean, with respect to any person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such person. For the purposes of this definition, "control"
when used with respect to any person, means the power to direct the management
and policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Extraordinary Cash Dividend" means cash dividends with respect to the
Common Stock the aggregate amount of which in any fiscal year exceeds the lesser
of (i) 15% of the net income of the Company for the fiscal year immediately
preceding the payment of such dividend or (ii) $1,000,000.
(f) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Exercise Rate need be made unless the adjustment would require an increase or
decrease of at least .5% in the Exercise Rate. Notwithstanding the foregoing,
any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment, provided that no such adjustment shall be
deferred beyond the date on which a Warrant is exercised. All calculations under
this Section 12 shall be made to the nearest cent or to the nearest 1/100th of a
share, as the case may be.
(g) WHEN NO ADJUSTMENT REQUIRED. If an adjustment is made upon the
establishment of a record date for a distribution subject to Subsections 12(a),
12(b) or 12(c) hereof and such distribution is subsequently canceled, the
Exercise Rate then in effect shall be readjusted, effective as of the date when
the Board of Directors determines to cancel such distribution, to that which
would have been in effect if such record date had not been fixed. To the extent
the Warrants become convertible into cash, no adjustment need be made thereafter
as to the amount of cash into which such Warrants are exercisable. Interest will
not accrue on the cash.
(h) NOTICE OF ADJUSTMENT. Whenever the Exercise Rate or Exercise
Price is adjusted, the Company shall provide the notices required by Section 14
hereof.
(i) VOLUNTARY REDUCTION. The Company from time to time may increase
the Exercise Rate by any amount for any period of time (including, without
limitation, permanently) if the period is at least 20 Business Days. An increase
of the Exercise Rate under this Subsection (i) (other than a permanent increase)
does not change or adjust the Exercise Rate otherwise in effect for purposes of
Subsections 12(a), 12(b) or 12(c).
(j) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED. In any case in which
this Section 12 shall require that an adjustment in the Exercise Rate be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event (i) issuing to the Holder of any
Warrant exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Rate prior to such adjustment, and
(ii) paying to such Holder any amount in cash in lieu of a fractional share
pursuant to Section 13; provided, however, that the Company shall deliver to the
Warrant Agent and shall cause the Warrant Agent, on behalf of and at the expense
of the Company, to deliver to such Holder a due xxxx or other appropriate
instrument evidencing such Holder's right to receive such additional Warrant
Shares, other capital stock and cash upon the occurrence of the event requiring
such adjustment.
14
(k) REORGANIZATIONS. In cash of any capital reorganization, other
than the cases referred to in Subsections 12(a), 12(b), 12(c) or 12(d), or the
consolidation or merger of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the continuing
corporation and which does not result in any reclassification of the outstanding
shares of Common Stock into shares of other stock or other securities or
property), or the sale of the property of the Company as an entirety or
substantially as an entirety (collectively such actions being hereinafter
referred to as "Reorganizations"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization if such Warrant had been exercised in
full immediately prior to such Reorganization. In case of any Reorganization,
appropriate adjustment, as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a duly adopted resolution
certified by the Company's Secretary or Assistant Secretary and delivered to the
Warrant Agent, shall be made in the application of the provisions herein set
forth with respect to the rights and interests of Holders so that the provisions
set forth herein shall thereafter be applicable, as nearly as possible, in
relation to any shares or other property thereafter deliverable upon exercise of
Warrants.
The Company shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such Reorganization or the corporation
purchasing or leasing such assets or other appropriate corporation or entity
shall expressly assume, by a supplemental Warrant Agreement or other
acknowledgment executed and delivered to the Warrant Agent, the obligation to
deliver to the Warrant Agent and to cause the Warrant Agent to deliver to each
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase, and all other
obligations and liabilities under this Agreement.
The foregoing provisions of this Subsection 12(k) shall apply to
successive Reorganization transactions.
(l) FORM OF WARRANTS. Irrespective of any adjustments in the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
(m) MISCELLANEOUS. For purposes of this Section 12, the term "Fully
Diluted Shares" shall mean (i) the shares of Common Stock outstanding as of a
specified date, and (ii) shares of Common Stock into or for which rights,
options, warrants or other securities outstanding as of such date are
exercisable or convertible (other than the Warrants). In the event that at any
time, as a result of an adjustment made pursuant to this Section 12, the Holders
of Warrants shall become entitled to purchase any securities of the Company
other than, or in addition to, shares of Common Stock, thereafter the number or
amount of such other securities so purchasable upon exercise of each Warrant
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 Warrant
Shares contained in Subsections 12(a) through 12(l) inclusive, and
15
the provisions of Sections 7, 8, 10 and 13 with respect to the Warrant Shares
or the Common Stock shall apply on like terms to any such other securities.
SECTION 13. FRACTIONAL INTERESTS. The Company shall not be required
to issue fractional Warrant Shares on the exercise of Warrants. The number of
full Warrant Shares which shall be issuable upon the exercise of a Warrant shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
on exercise of the Warrant so presented. If any fraction of a Warrant Share
would, except for the provisions of this Section 13, be issuable on the exercise
of any Warrant, the Company shall pay an amount in cash equal to the Current
Market Value on the day immediately preceding the date the Warrant is presented
for exercise, multiplied by such fraction.
SECTION 14. NOTICES TO WARRANT HOLDERS. Upon any adjustment pursuant
to Section 12 hereof, the Company shall give prompt written notice of such
adjustment to the Warrant Agent and shall cause the Warrant Agent, on behalf of
and at the expense of the Company, within 10 days after such adjustment, to mail
by first class mail, postage prepaid, to each Holder a notice of such
adjustment(s) and shall deliver to the Warrant Agent a certificate of the Chief
Financial Officer of the Company, accompanied by the report thereon by a firm of
independent public accountants selected by the Board of Directors of the Company
(who may be the regular accountants for the Company), setting forth in
reasonable detail (i) the number of Warrant Shares purchasable upon the exercise
of each Warrant and the Exercise Price of such Warrant after such adjustment(s),
(ii) a brief statement of the facts requiring such adjustment(s) and (iii) the
computation by which such adjustment(s) was made. Where appropriate, such notice
may be given in advance and included as a part of the notice required under the
other provisions of this Section 14.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock 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; or
(c) of any consolidation or merger to which the Company is a part
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) the Company proposes to take any action that would require an
adjustment to the Exercise Rate or the Exercise Price pursuant to
Section 12;
16
then the Company shall give prompt written notice to the Warrant Agent and
shall cause the Warrant Agent, on behalf of and at the expense of the
Company, to give to each of the registered holders of the Warrant
Certificates at his or its address appearing on the Warrant Register, at
least 30 days (or 20 days in any case specified in clauses (a) or (b) above)
prior to the applicable record date hereinafter specified, or the date of the
event in the case of events for which there is no record date, by first-class
mail, postage prepaid, a written notice stating (i) the day as of which the
holders of record of shares of Common Stock to be entitled to receive any
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 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. The failure by the Company or the
Warrant Agent to give such notice or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any action.
The Company shall give prompt written notice to the Warrant Agent
and shall cause the Warrant Agent, on behalf of and at the expense of the
Company, to give to each Holder written notice of any determination to make a
distribution to the holders of its Common Stock of any cash dividends,
assets, debt securities, preferred stock, or any rights or warrants to
purchase debt securities, preferred stock, Stock) of the Company, which
notice shall state the nature and amount of such planned dividend or
distribution and the record date therefor, and shall be received by the
Holders at least 30 days prior to such record date therefor.
Nothing contained in this Agreement or in any Warrant Certificate
shall be construed as conferring upon the Holders 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 15. NOTICES TO THE COMPANY AND WARRANT AGENT. Any notice
or demand authorized by this Agreement to be given or made by the Warrant
Agent or by any Holder to or on the Company shall be sufficiently given or
made when received at the office of the Company expressly designated by the
Company as its office for purposes of this Agreement (until the Warrant Agent
is otherwise notified in accordance with this Section 15 by the Company), as
follows:
Epic Warrant Co.
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
17
Any notice pursuant to this Agreement to be given by the Company or by
any Holder(s) to the Warrant Agent shall be sufficiently given when received by
the Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this Section 15 by the Warrant Agent):
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
SECTION 16. 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 Warrants in order to cure any
ambiguity or to correct or supplement any 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 any holder of Warrants.
SECTION 17. CONCERNING THE 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,
by their acceptance of Warrants, shall be bound:
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the Company, and the Warrant
Agent assumes no responsibility for the correctness of any of the same. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrants except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for and shall
incur no liability to the Company or any Holder for any failure of the
Company to comply with the covenants contained in this Agreement or in the
Warrants to be complied with by the Company.
(c) The Warrant Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
(through its employees), by or through its attorneys or agents (which shall
not include its employees) and shall not be responsible for the negligence or
misconduct of any attorney or agent appointed with due care.
(d) The Warrant Agent may consult at any time with legal 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 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.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless such evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively
to be proved and established by a certificate signed by the President, one of
the Vice Presidents, or the Secretary of the
18
Company and delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(f) The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
performance of its duties under this Agreement, to reimburse the Warrant
Agent for all expenses, taxes and governmental charges and other charges of
any kind and nature incurred by the Warrant Agent in the performance of its
duties under this Agreement (including, without limitation, reasonable fees
and expenses of counsel), and to indemnify the Warrant Agent and its agents,
employees, directors, officers and affiliates and save it and them harmless
against any and all liabilities, losses and expenses, including, without
limitation, judgments, costs and counsel fees, for anything done or omitted
by the Warrant Agent in the performance of its duties under this Agreement,
except as a result of the Warrant Agent's negligence or bad faith. The
provisions of this subparagraph (f) shall survive the resignation or removal
of the Warrant Agent and the termination of this Agreement.
(g) 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 shall furnish the
Warrant Agent with reasonable security and indemnity 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 the Warrant Agent 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 Warrants 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, as their respective rights or
interests may appear.
(h) The Warrant Agent and any stockholder, director, officer or
employee ("Related Parties") of the Warrant Agent may buy, sell or deal in
any of the Warrants or other securities of the Company or become pecuniarily
interested in any transactions 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 or any Related Party from acting in
any other capacity for the Company or for any other legal entity including,
without limitation, acting as Transfer Agent or as a lender to the Company or
an affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent, and
its duties shall be determined solely by the provisions hereof. No implied
duties or obligations shall be read into this Agreement against the Warrant
Agent. 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 bad faith.
(j) The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder for any action taken in
reliance on any notice, resolution, waiver, consent, order, certificate or
other paper, document or instrument reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
19
(k) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in respect
of the validity or execution of any Warrant (except its countersignature
thereof); nor shall the Warrant Agent by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Warrant Shares (or other securities) to be issued pursuant to this Agreement
or any Warrant, or as to whether any Warrant Shares (or other securities)
will, when issued, be validly issued, fully paid and nonassessable, or as to
the Exercise Price or the number or amount of Warrant Shares or other
securities or other property issuable upon exercise of any Warrant.
(l) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President, any Vice President or the Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its duties,
and shall not be liable for any action taken or suffered to be taken by it in
good faith and without negligence in accordance with instructions of any such
officer or officers.
(m) By countersigning Warrant Certificates or by any other act
hereunder the Warrant Agent shall not be deemed to make any representations
as to validity or authorization of the Warrants or the Warrant Certificates
(except as to its countersignature thereon) or of any securities or other
property delivered upon exercise or tender of any Warrant, or as to the
accuracy of the computation of the Exercise Price or the number or kind or
amount of stock or other securities or other property deliverable upon
exercise of any Warrant or the correctness of the representations of the
Company made in any certifications that the Warrant Agent receives. The
Warrant Agent shall not have any duty to calculate or determine any
adjustments with respect either to the Exercise Price or the kind and amount
of shares or other securities or any property receivable by holders of
Warrants upon the exercise or tender of Warrants required from time to time,
and the Warrant Agent shall have no duty or responsibility in determining the
accuracy or correctness of any such calculation.
SECTION 18. CHANGE OF WARRANT AGENT. The Warrant Agent may resign
and be discharged from its duties under this Agreement by giving to the
Company 30 days' notice in writing. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company. If the Warrant Agent shall
resign or be removed or shall otherwise be incapable of acting, the Company
shall appoint a successor to the Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any Holder (who shall with
such notice submit his Warrant for inspection by the Company), then any
Holder may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Pending appointment of a successor to
the Warrant Agent, either by the Company or by such court, the duties of the
Warrant Agent shall be carried out by the Company. Any successor warrant
agent, whether appointed by the Company or such a court, shall be a bank or
trust company in good standing, incorporated under the laws of the United
States of America or any State thereof or the District of Columbia and having
at the time of its appointment as warrant agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor warrant
agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer
to the successor warrant agent any property at the time held by it hereunder,
and execute and deliver any further assurance, conveyance, act or deed
necessary
20
for such purpose. Failure to file any notice provided for in this Section 18,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Warrant Agent or the appointment of the
successor warrant agent, as the case may be. In the event of such resignation
or removal, the Company or the successor warrant agent shall mail by first
class mail, postage prepaid, to each Holder, written notice of such removal
or resignation and the name and address of such successor warrant agent.
SECTION 19. IDENTIFY OF TRANSFER AGENT. Forthwith upon the
appointment of any Transfer Agent for the Common Stock, or any other shares
of the Company's capital stock issuable upon the exercise of the Warrants,
the Company shall file with the Warrant Agent a statement setting forth the
name and address of such Transfer Agent.
SECTION 20. SUCCESSORS. All the covenants and provisions of this
Agreement by and for the benefit of the Company, the Warrant Agent or any
Holder of Warrants shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 21. TERMINATION. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate
on any earlier date if all Warrants have been exercised or redeemed pursuant
to this Agreement.
SECTION 22. 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 shall be governed by and construed in
accordance with the laws of said State, without regard to the conflict of law
rules thereof.
SECTION 23. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Warrant Agent and the registered 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 registered holders of the Warrant
Certificates.
SECTION 24. 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.
21
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.
EPIC WARRANT CO.
By /s/ X. X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Warrant Agent
By /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
22
EXHIBIT A
[Form of Warrant Certificate]
[Face]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY
NOT BE OFFERED, SOLD OR PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR A BENEFICIAL
INTERST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON, IS NOT
ACQUIRING THIS SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON, AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
WITH RESPECT TO SUCH TRANSFER, ON THE DATE OF THE TRANSFER OF THIS SECURITY
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO EPIC WARRANT CO. (THE
"ISSUER") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QIB IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE WARRANT AGENT), AND IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE AMOUNT OF SECURITIES AT THE TIME OF TRANSFER OF LESS
THAN 250 WARRANTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE, BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (G) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL ACCEPTABLE
TO THE ISSUER) AND IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. AS USED HEREIN, THE
Exhibit A
Page 2
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
Exhibit A
Page 3
EXERCISABLE AFTER THE DATE OF ISSUANCE
AND ON OR BEFORE JUNE 15, 2005
Warrant No.:
CUSIP No.: No. of Warrants: ______
Warrant Certificate
Epic Warrant Co.
This Warrant Certificate certifies that _______________, or registered
assigns, is the registered holder of ____ Warrants expiring June 15, 2005
(the "Warrant") to purchase shares of common stock, no par value (the "Common
Stock"), of Epic Warrant Co., a Delaware corporation (the "Company"). Each
Warrant initially entitles the holder upon exercise to receive from the
Company on or after July 9, 1998 and on or before 5:00 p.m. New York City
Time on June 15, 2005, one fully paid and nonassessable share of Common Stock
(each a "Warrant Share") at the initial exercise price (the "Exercise Price")
of $.01 payable in lawful money of the United States of America upon
surrender of this Warrant Certificate and payment of the Exercise Price at
the office or agency of the Warrant Agent, but only subject to the conditions
set forth herein and in the Warrant Agreement referred to on the reverse
hereof. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.
The Warrants may not be exercised after 5:00 p.m., New York City
Time, on June 15, 2005, and to the extent not exercised by such time the
Warrant, shall become void.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
Exhibit A
Page 4
IN WITNESS WHEREOF, Epic Warrant Co. has caused this Warrant
Certificate to be signed by its President and by its Vice Presidents.
Dated:
EPIC WARRANT CO.
By: ___________________________
Name:
Title:
Countersigned:
United States Trust Company of New York,
as Warrant Agent
By:______________________________
Authorized Signature
Exhibit A
Page 5
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate is part of a
duly authorized issue of Warrants expiring June 15, 2005, entitling the
holders on exercise to receive shares of voting Common Stock of the Company,
and is issued or to be issued pursuant to a Warrant Agreement dated as of
July 8, 1998 (the "Warrant Agreement"), duly executed and delivered by the
United States Trust Company of New York, a banking corporation organized and
existing under the laws of the State of New York, as warrant agent (the
"Warrant Agent"). The Warrant Agreement is hereby incorporated by reference
in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants. A copy of the Warrant Agreement may be obtained by
the holder hereof upon written request to the Company.
The Warrants may be exercised at any time on or after July 9, 1998
and on or before June 15, 2005, subject to extension as provided in the
Warrant Agreement. The holder of the Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with
the form of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price in cash at the office
of the Warrant Agent. The Warrants evidenced hereby shall be exercisable only
in full, and not in part. No adjustment shall be made for any dividends on
any shares of Common Stock issuable upon exercise of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the number of Warrants set forth on the face hereof may, subject to
certain conditions, be adjusted. No fractions of a share of Common Stock will
be issued upon the exercise of any Warrant, but the Company will pay the cash
value thereof determined as provided in the Warrant Agreement.
This Warrant Certificate, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in
the manner and subject to the limitations provided in the Warrant Agreement,
but without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate Warrants to
purchase the aggregate number of shares of Common Stock to which the
surrendered Warrants were entitled.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and representing in the aggregate the
right to purchase a like number of shares of Common Stock shall be issued to
the transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any
tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any
Exhibit A
Page 6
distribution to the holder(s) hereof, and for all other purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entitles any
holder hereof to any rights of a stockholder of the Company.
Exhibit A
Page 7
[Form of Election to Purchase]
[To Be Executed upon Exercise of Warrant]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive ________ shares of Common
Stock and herewith tenders payment for such shares to the order of Epic
Warrant Co. in the amount of $___________ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of ______________________ whose address is
_______________________________ and that such shares be delivered to
______________________, whose address is _____________________________.
Signature:
Date:
Signature Guarantee:
_____________________________________________
(Signatures must be guarantee by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements will include membership or
participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may
be determined by the Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.)
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to purchase Common Stock
(THE "SECURITIES") OF EPIC WARRANT CO.
This Certificate relates to _______________ Securities held in the
form of Physical Warrants by ____________________ (the "Transferor").
The Transferor:*
/ / has requested that the Warrant Agent by written order to
exchange or register the transfer of a Physical Warrant or Physical Warrants.
In connection with such request and in request of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Warrant Agreement relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 6 of such Warrant
Agreement, and that the transfer of these Securities does not require
registration under the Securities Act of 1933, as amended (the "Act")
because *:
/ / Such Security is being acquired for the Transferor's own
account, without transfer.
/ / Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Act), in reliance on
Rule 144A.
/ / Such Security is being transferred to an institutional
"accredited investor" (within the meaning of subparagraphs (a)(1), (2), (3)
or (7) of Rule 501 under the Act.
/ / Such Security is being transferred in reliance on Regulation S
under the Act.
/ / Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act
other than Rule 144A or Rule 144 or Regulation S under the Act to a person
other than an institutional "accredited investor."
(INSERT NAME OF TRANSFEROR)
By:____________________________
(Authorized Signature)
Date:
___________________________________
* Check applicable box.
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
[Date]
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Administration
Re: Epic Warrant Co. (the "Company")
WARRANTS TO PURCHASE COMMON STOCK (THE "SECURITIES")
Ladies and Gentlemen:
In connection with our proposed purchase of Securities of the
Company, we confirm that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the Securities
is subject to certain restrictions and conditions set forth in the Warrant
Agreement and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the offer and sale of the Securities have
not been registered under the Securities Act, and that the Securities may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities, we will
do so only (A) to the Company or any subsidiary thereof, (B) inside the
United States in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) inside the United
States to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Warrant Agent a signed letter substantially in the form
hereof, (D) outside the United States in accordance with Regulation S under
the Securities Act, (E) pursuant to the exemption from registration provided
by Rule 144 under the Securities Act (if available), or (F) pursuant to an
effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing Securities from us a notice
advising such purchaser that resales of the Securities are restricted as
stated herein.
4. We understand that, on any proposed resale of Securities, we
will be required to
Exhibit C
Page 2
furnish the Warrant Agent and the Company, such certification, legal opinions
and other information as the Warrant Agent and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
(Name of Transferee)
By:________________________________
(Authorized Signatory)
EXHIBIT D
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
[Date]
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Administration
Re: Epic Warrant Co. (the "Company")
WARRANTS TO PURCHASE COMMON STOCK (THE "SECURITIES")
Dear Sirs:
In connection with our proposed transfer of the Securities, we
confirm that such sale has been effected pursuant to and in accordance with
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither we nor any person acting on our behalf
knows that the transaction has been prearranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation 5, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby. Defined terms used herein
without definition have the respective meanings provided in Regulation S.
Exhibit D
Page 2
Very truly yours,
(Name of Transferor)
By: ____________________________
(Authorized Signatory)
