1
[FORM OF WARRANT AGREEMENT]
XXXXXXX XXXXX XXXXXX HOLDINGS INC.
and
CITIBANK, N.A., Warrant Agent
and
XXXXX XXXXXX INC., Determination Agent
-------------------------
WARRANT AGREEMENT
dated as of July -, 1998
- Call Warrants
on the 1998 TEN + Index
Expiring -, 2000
2
TABLE OF CONTENTS
PAGE
ARTICLE I ISSUANCE OF WARRANTS AND FORM, EXECUTION, DELIVERY AND REGISTRATION OF WARRANTS........................3
SECTION 1.01. Issuance of Warrants............................................................................3
SECTION 1.02. Form, Execution and Delivery of Warrant Certificates............................................3
SECTION 1.03. Mutilated or Missing Warrant Certificates.......................................................5
ARTICLE II DURATION AND EXERCISE OF WARRANTS.....................................................................6
SECTION 2.01. Duration of Warrants; Minimum Exercise Amounts; Exercise Notice.................................6
SECTION 2.02. Exercise and Delivery of Warrants...............................................................7
SECTION 2.03. Market Disruption Events.......................................................................12
SECTION 2.04. Extraordinary Events...........................................................................13
SECTION 2.05. Cancellation of Warrants.......................................................................14
SECTION 2.06. Extension Events...............................................................................16
SECTION 2.07. Delisting of Warrants..........................................................................17
SECTION 2.08. Automatic Exercise of Warrants.................................................................17
SECTION 2.09. Minimum and Maximum Number of Exercisable Warrants.............................................18
SECTION 2.10. Covenant of the Company........................................................................19
SECTION 2.11. Return of Money Held Unclaimed for Two Years...................................................19
SECTION 2.12. Return of Global Warrant Certificate...........................................................19
ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDERS...............................................20
SECTION 3.01. Warrantholder of Warrant May Enforce Rights....................................................20
SECTION 3.02. Merger, Consolidation, Sale, Transfer or Conveyance.............................................20
ARTICLE IV WARRANTS ACQUIRED BY THE COMPANY; PAYMENT OF TAXES...................................................21
SECTION 4.01. Warrants Acquired by the Company...............................................................21
SECTION 4.02. Payment of Taxes...............................................................................21
ARTICLE V CONCERNING THE WARRANT AGENT..........................................................................21
SECTION 5.01. Warrant Agent..................................................................................21
SECTION 5.02. Conditions of Warrant Agent's Obligations......................................................22
SECTION 5.03. Resignation and Appointment of Successor.......................................................23
ARTICLE VI MISCELLANEOUS........................................................................................24
3
SECTION 6.01. Amendment......................................................................................24
SECTION 6.02. Successor Index................................................................................25
SECTION 6.03. Notices and Demands to the Company, the Warrant Agent and the Determination Agent..............25
SECTION 6.04. Addresses for Notices..........................................................................25
SECTION 6.05. Notices to Holders.............................................................................25
SECTION 6.06. Obtaining of Approvals.........................................................................25
SECTION 6.07. Persons Having Rights Under This Agreement.....................................................26
SECTION 6.08. Inspection of Agreement........................................................................26
SECTION 6.09. Headings.......................................................................................26
SECTION 6.10. Counterparts...................................................................................26
SECTION 6.11. APPLICABLE LAW.................................................................................26
TESTIMONIUM ..................................................................................................28
SIGNATURES ...................................................................................................28
EXHIBIT A - Form of Global Warrant Certificate
EXHIBIT B - Exercise Notice
EXHIBIT C - Confirmation of Exercise
EXHIBIT D - Notice of Rejection Relating to Limit Option
WARRANT AGREEMENT, dated as of July -, 1998, among XXXXXXX
XXXXX XXXXXX HOLDINGS INC., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), CITIBANK, N.A., a national banking
association organized and existing under the laws of the United States of
America (the "Warrant Agent"), and XXXXX XXXXXX INC., a corporation organized
and existing under the laws of the State of Delaware (the "Determination
Agent").
WHEREAS the Company proposes to sell warrants (the "Warrants"
or, individually, a "Warrant") representing the right to receive from the
Company the amount, if any, in U.S. dollars determined by reference to increases
in the value of the of 1998 TEN + Index (the "Index") on the terms and
conditions set forth in this Agreement; and
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, transfer and exercise of the Warrants, and the Company desires to
set forth herein, among other things, the provisions of the Warrants and the
terms and conditions on which they may be issued, transferred, exercised and
canceled;
NOW, THEREFORE, the parties hereto agree as follows:
4
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANTS
SECTION 1.01. Issuance of Warrants. (a) The Warrants will
constitute direct, unconditional and unsecured obligations of the Company and
will rank on a parity with the Company's other unsecured contractual obligations
and with the Company's unsecured and unsubordinated debt.
(b) The Warrants will be issued in book-entry form and
represented by one or more global certificates (each a "Global Warrant
Certificate"). Each Warrant shall represent the right, subject to the provisions
contained herein, to receive the Cash Settlement Value (as defined herein) of
such Warrant upon exercise. In no event shall a registered or beneficial holder
of a Warrant (each a "Warrantholder") be entitled to receive any interest on any
Cash Settlement Value. A Warrant will not require or entitle a Warrantholder to
receive any of the underlying stocks comprising the Index (the "Underlying
Shares") from the Company. The Company shall not be under any obligation to, nor
will it, sell the Underlying Shares to, or purchase or take delivery of any such
Underlying Share from, Warrantholders in connection with the exercise of any
Warrants.
(c) Warrantholders shall not be entitled to hold Warrants in
certificated form through CEDEL or Euroclear (as such terms are defined herein).
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates. (a) Each Global Warrant Certificate shall be evidenced by a
certificate in registered form substantially in the form set forth in Exhibit A
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement, and may represent any
number of whole Warrants. Each Global Warrant Certificate may have imprinted or
otherwise reproduced thereon such letters, numbers or other marks of
identification or designation and such legends or endorsements as the officers
of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and which are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto, or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or of the
Depository (as defined herein), or to conform to usage.
(b) The Warrant Agent is authorized, upon receipt of a Global
Warrant Certificate from the Company, duly executed on behalf of the Company, to
countersign such Global Warrant Certificate. The Global Warrant Certificate
shall be manually countersigned and dated the date of its countersignature by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent shall deliver the Global Warrant Certificate to
or upon the order of the Company. One or more Global Warrant Certificates may be
executed by the
3
5
Company and delivered to the Warrant Agent on or after the date of execution of
this Agreement; provided that only one Global Warrant Certificate shall be
outstanding at any one time(1).
The Company reserves the right to issue, from time to time
after the date of execution of this Agreement, additional Warrants, and in
connection therewith the Global Warrant Certificate may be exchanged for a new
Global Warrant Certificate to reflect the issuance by the Company of such
additional Warrants. To effect such an exchange the Company shall deliver to the
Warrant Agent a new Global Warrant Certificate duly executed on behalf of the
Company as provided in Section 1.02. The Warrant Agent shall authenticate the
new Global Warrant Certificate as provided in this Section and shall deliver the
new Global Warrant Certificate to the Depository in exchange for, and upon
receipt of, the Global Warrant Certificate then held by the Depository. The
Warrant Agent shall cancel the Global Warrant Certificate delivered to it by the
Depository, destroy such Global Warrant Certificate and provide a certificate of
destruction to the Company.
(c) In case any officer of the Company who shall have signed a
Global Warrant Certificate, either manually or by facsimile signature, shall
cease to be such officer before such Global Warrant Certificate shall have been
countersigned and delivered by the Warrant Agent to the Company or delivered by
the Company, such Global Warrant Certificate nevertheless may be countersigned
and delivered as though the person who signed such Global Warrant Certificate
had not ceased to be such officer of the Company; and the Global Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Global Warrant Certificate, shall be a
proper officer of the Company to sign such Global Warrant Certificate, although
at the date of the execution of this Warrant Agreement any such person was not
such officer.
(d) The Global Warrant Certificate will initially be
registered in the name of a nominee of The Depository Trust Company (the
"Depository", which term, as used herein, includes any successor securities
depository selected by the Company). The Warrant holdings of the Depository
participants (the "Participants") will be recorded on the books of the
Depository. The holdings of customers of the Participants and the identity of
the Warrantholders will be reflected on the books and records of such
Participants and will not be known to the Warrant Agent, the Company, the
Determination Agent or the Depository. The Global Warrant Certificate will be
held by the Depository or its agent.
The Company may from time to time select a new entity to act
as Depository with respect to the Warrants and, if such selection is made, the
Company shall promptly give the Warrant Agent notice to such effect identifying
the new Depository, and the Global Warrant Certificate shall be delivered to the
Warrant Agent and shall be transferred to the new Depository as provided below
as promptly as possible. Appropriate changes may be made in the forms of the
Global Warrant Certificate, the Exercise Notice (as defined herein) and the
related notices to be delivered in connection with an exercise to reflect the
selection of the new Depository.
--------
(1) This provision may need to be revised in light of DTC's rule that
global certificates cannot exceed $200 million.
4
6
(e) Except as otherwise provided herein or in the Global
Warrant Certificate, the Warrant Agent shall from time to time register the
transfer of the Global Warrant Certificate in its records (which may be
maintained electronically), subject to such reasonable regulations as the
Company or the Warrant Agent may prescribe, only to the Depository, to another
nominee of the Depository, to a successor Depository or to a nominee of a
successor Depository, upon surrender of such Global Warrant Certificate, duly
endorsed, or accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent and the Company, duly executed by the
registered holder thereof or by the duly appointed legal representative thereof,
or by its duly authorized attorney, such signature to be guaranteed by a bank or
trust company with a correspondent office in The City of New York or by a member
of a national securities exchange. Upon any such registration of transfer, a new
Global Warrant Certificate shall be issued to the transferee and the surrendered
Global Warrant Certificate shall be canceled by the Warrant Agent.
The Global Warrant Certificate may be transferred as provided
above at the option of the holder thereof, when surrendered to the Warrant
Agent's Office, or at the office of any successor Warrant Agent (as provided in
Section 5.03), for another Global Warrant Certificate of like tenor and
representing an equal number of unexercised Warrants.
(f) Except as provided in Section 1.03, no service charge
shall be made for any registration of transfer or exchange of Global Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Global Warrant Certificates, other than
exchanges pursuant to this Section 1.02 not involving any transfer.
SECTION 1.03. Mutilated or Missing Warrant Certificates. (a)
If any Global Warrant Certificate is mutilated, lost, stolen or destroyed, the
Company may in its discretion execute, and the Warrant Agent may countersign and
deliver, in exchange and substitution for and upon cancellation of the mutilated
Global Warrant Certificate, or in lieu of the Global Warrant Certificate lost,
stolen or destroyed, a new Global Warrant Certificate of like tenor and
representing an equal number of unexercised Warrants, bearing an identification
number not contemporaneously outstanding, but only (in case of loss, theft or
destruction) upon receipt of evidence satisfactory to the Company and the
Warrant Agent of such loss, theft or destruction of such Global Warrant
Certificate and security or indemnity, if requested, also satisfactory to them.
Applicants for such substitute Global 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.
(b) In case all of the Warrants evidenced by any such
mutilated, lost, stolen or destroyed Global Warrant Certificate have been or are
about to be exercised, or deemed to be exercised, the Company in its absolute
discretion may, instead of issuing a new Global Warrant Certificate, direct the
Warrant Agent to treat the same as if it had received an Exercise Notice in
proper form in respect thereof, as provided herein, or as being subject to
automatic exercise (pursuant to Section 2.08) , as the case may be.
(c) Each new Global Warrant Certificate issued pursuant to
this Section 1.03 in lieu of any lost, stolen or destroyed Global Warrant
Certificate shall be an original, additional
5
7
contractual obligation of the Company, whether or not, in the case of any lost,
stolen or destroyed Global Warrant Certificate, such Global Warrant Certificate
shall at any time be enforceable by anyone, and shall be entitled to the same
benefits under this Agreement equally and proportionately with any and all other
Global Warrant Certificates duly issued hereunder.
(d) Upon the issuance of any new Global Warrant Certificate in
accordance with this Section 1.03, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Warrant Agent) connected therewith.
(e) The provisions of this Section 1.03 are exclusive and
shall preclude (to the extent lawful) any other rights and remedies with respect
to the replacement or payment of mutilated, lost, stolen or destroyed Global
Warrant Certificates.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise Amounts;
Exercise Notice. Subject to the limitations set forth herein and in Section
2.08, each Warrant may be irrevocably exercised in whole but not in part, at or
prior to 3:00 p.m., New York City time, on any Business Day from August -, 1998
until 3:00 p.m., New York City time, on the earlier of (i) the fourth Business
Day immediately preceding -, 2000 (the "Expiration Date") and (ii) the Delisting
Date (as defined herein), if any. Except in the event of automatic exercise,
each Warrant shall be irrevocably exercised upon receipt by the Warrant Agent of
such Warrant delivered free on the records of the Depository to the Warrant
Agent's Depository Participant Account (entitled Citibank, N.A. Corporate Trust
Warrant Agent Account, No. 2659, or such other account at the Depository as the
Warrant Agent shall designate in writing to the Company) (the "Warrant Account")
pursuant to an Exercise Notice to the Warrant Agent from a Participant, in the
case of Warrants held through the facilities of the Depository, CEDEL, in the
case of Warrants held through CEDEL, or a Euroclear participant, in the case of
Warrants held through Euroclear, acting, directly or indirectly, on behalf of
the Warrantholder; provided, however, that Exercise Notices are subject to
rejection by the Warrant Agent as provided herein. Not fewer than - Warrants may
be exercised by or on behalf of any one Warrantholder at any one time, except in
the event of automatic exercise. An Exercise Notice shall be unconditional.
Except as provided in Section 2.02(b), the Warrant Agent shall be entitled, with
no duty of inquiry, to rely conclusively on any Exercise Notice received by it.
"Exercise Notice" means an irrevocable exercise notice to the Warrant Agent at
its address, which notice shall be substantially in the form set forth in
Exhibit B hereto or such other form as the Company and the Warrant Agent may
approve and may be given by facsimile transmission. For purposes of this
Agreement, "Business Day" means any day other than a Saturday or Sunday or a day
on which either the Chicago Board Options Exchange (the "CBOE") is not open for
securities trading or commercial banks in New York City are required or
authorized by law or executive order to remain closed.
6
8
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except
for Warrants subject to automatic exercise or held through the facilities of
CEDEL or Euroclear, and subject to the Limit Option, the "Exercise Date" for a
Warrant will be (i) the Business Day on which the Warrant Agent receives the
Warrant and Exercise Notice in proper form with respect to such Warrant, if
received at or prior to 3:00 P.M., New York City time, on such day, or (ii) if
the Warrant Agent receives such Warrant and Exercise Notice after 3:00 P.M., New
York City time, on a Business Day, then the Business Day next succeeding such
Business Day. In the case of Warrants held through the facilities of CEDEL or
Euroclear, except for Warrants subject to automatic exercise, and subject to the
Limit Option, the "Exercise Date" for a Warrant will be (i) the Business Day on
which the Warrant Agent receives the Exercise Notice in proper form with respect
to such Warrant if such Exercise Notice is received at or prior to 3:00 P.M.,
New York City time, on such day; provided that the Warrant is received by the
Warrant Agent by 3:00 P.M., New York City time, on the Valuation Date (as
defined below), or (ii) if the Warrant Agent receives such Exercise Notice after
3:00 P.M., New York City time, on a Business Day, then the Business Day next
succeeding such Business Day; provided that the Warrant is received by 3:00
P.M., New York City time, on the Valuation Date relating to exercises of
Warrants on such succeeding Business Day. In the event that a Warrant is
received after 3:00 P.M., New York City time, on the Valuation Date, then the
Exercise Date for such Warrant will be the day on which such Warrant is received
or, if such day is not a Business Day, the next succeeding Business Day. In the
case of Warrants held through the facilities of Euroclear, (a) participants must
also transmit, by facsimile, to the Warrant Agent a copy of the Exercise Notice
submitted to Euroclear by 3:00 P.M., New York City time, on the desired Exercise
Date and (b) Euroclear must confirm (a "Euroclear Confirmation") by telex to the
Warrant Agent by 9:00 A.M., New York City time, on the Valuation Date that the
Warrants will be received by the Warrant Agent on such date; provided that if
such telex communication is received after 9:00 A.M., New York City time, on the
Valuation Date, the Company will be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for timely delivery
of such telex communication.
The "Valuation Date" for a Warrant will be the first Business
Day following the Exercise Date, subject to postponement as a result of the
exercise of a number of Warrants exceeding the limits on exercise described in
Section 2.09 or pursuant to Section 2.06.
(b) The Warrant Agent shall, in the case of Warrants other
than those held through CEDEL or Euroclear, following receipt of proper delivery
of a Warrant in accordance with Section 2.02(a), accompanied by a completed
Exercise Notice, and, in the case of Warrants held through CEDEL or Euroclear,
following receipt of proper delivery of a completed Exercise Notice in
accordance with Section 2.02(a):
(i) promptly (1) for Warrants not held through CEDEL or
Euroclear, determine whether such Exercise Notice has been duly completed and is
in proper form and (2) for Warrants held through CEDEL or Euroclear, determine
whether such Exercise Notice has been duly completed and is in proper form duly
executed by CEDEL or the Euroclear participant tendering such Warrant, as
applicable; and, in either case, if the Warrant Agent determines that the
Exercise Notice has not been duly completed or is not in proper form, the
Warrant Agent promptly shall (X) reject such Exercise Notice and shall send to
the entity that executed such Exercise Notice a notice of rejection
substantially in the form set forth in Exhibit C hereto and shall redeliver such
7
9
Warrants (to the extent received in the case of Warrants held through CEDEL or
Euroclear) free through the facilities of the Depository to the account from
which they were transferred to the Warrant Agent and (Y) shall not take the
actions required by clauses (ii)-(ix) below with respect to such Exercise Notice
or the related Warrants; provided, however, that the Warrant Agent shall deliver
a copy of the Exercise Notice relating to such Warrants to the Company as
required by Section 2.02(b)(ix) below and the Company may waive any defect in
the form of such Exercise Notice;
(ii) with respect to each Warrant held through Euroclear for
which an Exercise Notice was received, promptly telephone Euroclear to determine
whether Euroclear anticipates that it will be able to provide a Euroclear
Confirmation as required by Section 2.02(a);
(iii) notify the Company and the Determination Agent (and such
other parties (not to exceed two) as the Company shall designate in writing) by
5:00 p.m., New York City time, on the Business Day that such Exercise Notice has
been received (or shall be deemed to have been received) of (A) the total number
of Warrants covered by such Exercise Notice, (B) the number of such Warrants
subject to the Limit Option (as defined in Section 2.02(f)), (C) the number of
such Warrants not subject to the Limit Option and (D) the number of such
Warrants, if any, as to which Euroclear has not advised the Warrant Agent that
it anticipates being able to provide a Euroclear Confirmation as required by
Section 2.02(a);
(iv) with respect to Warrants held through Euroclear,
determine whether the Warrant Agent has received by 9:00 a.m., New York City
time, on the Valuation Date relating to such Warrants, Euroclear Confirmations
with respect to such Warrants as required by Section 2.02(a), and if the Warrant
Agent has not received any such Euroclear Confirmation by such time, notify the
Company (and such other parties (not to exceed two) as the Company shall
designate in writing) by 10:00 a.m., New York City time, on such Valuation Date
of the number of such Warrants in respect of which the Warrant Agent has not
received such Euroclear Confirmations and (except to the extent the Company has
notified the Warrant Agent that it has waived the requirement of timely delivery
of such Euroclear Confirmation) send to the Euroclear participant that executed
such Exercise Notice for which no related Euroclear Confirmation was received
(at the address specified in such notice) a notice of rejection substantially in
the form set forth in Exhibit C hereto;
(v) if any of the Warrants covered by such Exercise Notice
constitute Warrants subject to the Limit Option, the Warrant Agent shall, by
5:00 p.m., New York City time, on the first Business Day following the Exercise
Date for such Warrants, (A) obtain from the Determination Agent the Spot Index
Value (as defined herein) for such Warrants for the Business Day that, but for
the provisions of Section 2.02(f), would be the Valuation Date for such
Warrants, (B) determine in accordance with Section 2.02(f) whether such Warrants
will be subject to exercise after giving effect to the Limit Option and, if such
Warrants will not be subject to exercise, send to the Participant that submitted
such Exercise Notice a notice of rejection substantially in the form set forth
in Exhibit D hereto with respect to such Warrants and (to the extent received in
the case of Warrants held through CEDEL and Euroclear), redeliver the Warrants
free through the facilities of the Depository to the account of such Participant
and
8
10
(C) notify the Company and the Determination Agent as to whether such Warrants
will be subject to exercise;
(vi) by 5:00 p.m., New York City time, on the Exercise Date
for such Warrants, (A) determine the sum of (1) the number of such Warrants not
subject to the Limit Option (i.e., the number of Warrants determined pursuant to
clause (iii)(C) above) plus (2) the number of such Warrants with respect to
which the Limit Option has been elected but that, notwithstanding such election,
will be subject to exercise (i.e., the number of Warrants so identified pursuant
to clause (v)(B) above) (all of such Warrants determined pursuant to (1) and
(2), the "Exercised Warrants") and (B) notify the Company and the Determination
Agent of the total number of Exercised Warrants so determined (if such number is
zero, the Warrant Agent shall not take the actions required by clauses (vii) and
(viii) with respect to such Exercise Notice or the related Warrants);
(vii) calculate the Cash Settlement Value of the Exercised
Warrants (excluding any Warrants held through CEDEL or Euroclear as to which
timely delivery of the related Warrant has not been made) as of their Valuation
Date in the manner set forth in Section 2.02(c) by no later than 3:00 p.m., New
York City time, on the Business Day next succeeding the Valuation Date (unless
the Cash Settlement Value shall be calculated by the Determination Agent);
(viii) notify the Company (and such other parties (not to
exceed two) as the Company shall designate in writing) by 5:00 p.m., New York
City time, on the Business Day next succeeding the Valuation Date of the Cash
Settlement Value payable in respect of the Exercised Warrants, and send notices
of confirmation substantially in the form included in Exhibit C to the
appropriate Participant specifying therein the reference number assigned by the
Warrant Agent to each accepted Exercise Notice; and
(ix) promptly deliver a copy of each Exercise Notice to the
Company and advise the Company of such other matters relating to the Exercised
Warrants as the Company shall reasonably request. Any notice to be given to the
Company by the Warrant Agent pursuant to this Section 2.02 shall be by telephone
(promptly confirmed in writing) or telecopy.
Except in the case of Warrants subject to automatic exercise,
if on any Valuation Date the Cash Settlement Value for any Warrants then
exercised would be zero, then the attempted exercise of such Warrants shall be
void and of no effect and the Warrants shall be transferred by the Warrant Agent
back to the Participant (including CEDEL and Euroclear) that submitted them free
to the Warrant Agent on the records of the Depository (to the extent received in
the case of Warrants held through CEDEL or Euroclear) and, in either case, the
Warrants in question shall remain outstanding and exercisable thereafter.
(c) The Company shall make available to the Warrant Agent, not
later than 3:00 p.m., New York City time, on the third Business Day following
the Valuation Date (the "Settlement Date"), funds in an amount sufficient to pay
the aggregate Cash Settlement Value of such Warrants. Subject to such funds
having been made available as provided in the preceding sentence, the Warrant
Agent will be responsible for making funds available to the Depository in
accordance with procedures agreed upon between the Depository and the Warrant
Agent, against
9
11
receipt of the Global Warrant Certificate, after 3:00 p.m., New York City time,
but prior to the close of business, on the Settlement Date, such funds to be in
an amount equal to the aggregate Cash Settlement Value of the Warrants that were
delivered to the Warrant Agent (together with the related Exercise Notice) as
provided in Sections 2.01 and 2.02(a) and (b). The Depository will be
responsible for disbursing such funds to each appropriate Participant, and such
Participant will be responsible for disbursing such payments to the
Warrantholders it represents and to each brokerage firm for which it acts as
agent. Each such brokerage firm will be responsible for disbursing funds to the
Warrantholders it represents.
The "Cash Settlement Value" of a Warrant will equal an amount
in U.S. dollars which is equal to the greater of (A) zero and (B) the product
(rounded down to the nearest cent) of (i) the quotient obtained by dividing (x)
the amount, if any, by which the Spot Index Value (as defined below) for the
applicable Valuation Date exceeds the product of (a) 0.8 and (b) the Initial
Index Value (as defined below) by (y) the Initial Index Value and (ii) $10.
The "Initial Index Value" means the value of the Index at the
close of trading on the CBOE on August -, 1998.
The "Spot Index Value" means the value of the Index at the
close of trading on the CBOE on the applicable Valuation Date; provided,
however, that the Spot Index Value with respect to the Expiration Date, any
Early Extended Expiration Date (as defined below) or any Extended Expiration
Date (as defined below) means the value of the Index at the opening of trading
on the CBOE on the applicable Valuation Date.
The Spot Index Value used to determine the Cash Settlement
Value on any Valuation Date will be rounded to the second decimal place (e.g.,
110.00), rounding up if the next succeeding decimal place, without regard to
rounding, is five or higher. Any such Cash Settlement Value will be rounded
downwards, if necessary, to the nearest cent.
(d) The Warrant Agent shall cause its records, which may be
kept electronically, to be marked to reflect the reduction in the number of
Warrants represented by the Global Warrant Certificate by the number of Warrants
that were delivered to the Warrant Agent and for which payment has been made as
provided in Section 2.02(c) promptly after such delivery and payment. Absent
manifest error, the Warrant Agent's records shall be conclusive evidence of such
matters.
(e) The Company has appointed Xxxxx Xxxxxx Inc. and Xxxxx
Xxxxxx Inc. accepts such appointment, to be the Company's Determination Agent to
make such calculations as may be required, including, without limitation,
calculation of the Initial Index Value and any Spot Index Value. The
Determination Agent shall timely communicate the Initial Index Value and each
Spot Index Value to the Warrant Agent. The Determination Agent shall act as an
independent expert and not as an agent of the Company, and, unless otherwise
provided by this Agreement, its calculations and determinations under this
Agreement shall, absent manifest error, be final and binding on the Company, the
Warrant Agent, the Warrantholders and any Participant. Any such calculations
will be made available to a Warrantholder for inspection at the Warrant Agent's
Office.
10
12
The Company agrees, for the benefit of the Warrantholders from
time to time, that there shall at all times be a Determination Agent hereunder
until all the Warrants are no longer outstanding or until monies for the payment
of all outstanding Warrants, if any, shall have been paid to the Warrant Agent
and shall have been returned to the Company as provided in Section 2.11,
whichever occurs earlier. Resignation, removal and appointment of the
Determination Agent shall be in accordance with the procedures set forth for the
resignation, removal and appointment of the Warrant Agent, as provided in
Section 5.03, except that a successor Determination Agent need not be a banking
institution with offices south of Xxxxxxxx Street in the Borough of Manhattan,
The City of New York, and may only be appointed if such successor has been
nominated by the Company and approved by the predecessor Determination Agent.
The Company agrees promptly to pay the Determination Agent the
compensation to be agreed upon with the Company for all services rendered by the
Determination Agent hereunder. The Company also agrees to indemnify the
Determination Agent for, and to hold it harmless against, any loss, liability,
cost or expense (including reasonable attorneys' fees and expenses) incurred by
the Determination Agent by reason of its being made a party to a suit or claim
arising out of this Agreement; provided, however, that such indemnity shall in
no event apply to the extent that any such loss, liability, cost or expense is a
result of the negligence, bad faith or breach of this Agreement on its part in
connection with the services rendered by it hereunder. The indemnity obligation
of the Company shall continue notwithstanding the termination of this Agreement
or the resignation or removal of the Determination Agent.
(f) Except in the event of an automatic exercise (as described
in Section 2.07 below), in connection with any exercise of Warrants, the related
Exercise Notice may specify that such exercise is subject to the condition that
the Spot Index Value that would otherwise be used to determine the Cash
Settlement Value of such Warrants shall not have declined by - or more points
from the Limit Option Index Value for such Warrants. "Limit Option Index Value",
with respect to any Warrants subject to the Limit Option, means the Spot Index
Value on the Business Day that such Exercise Notice has been received (or shall
be deemed to have been received). The option of a Warrantholder to condition an
exercise of Warrants as provided in this Section 2.02(f) is herein referred to
as the "Limit Option". If a Warrantholder elects the Limit Option in connection
with any exercise of Warrants, the following provisions shall apply:
(i) To be valid, such election must be specified in the
related Exercise Notice. Each of the Warrant Agent and the Company shall be
entitled to rely conclusively on such Exercise Notice, as received by the
Warrant Agent, in determining whether such election has been validly made. In
connection with any exercise of - or more Warrants, a Warrantholder may elect to
subject only a portion of such Warrants to the Limit Option; provided, however,
that the number of such Warrants subject to the Limit Option and the number of
such Warrants not subject to the Limit Option shall in each case not be less
than -. Participants shall be required to certify that the number of Warrants
exercised on behalf of any Warrantholder pursuant to the related Exercise Notice
that is subject to the Limit Option is not less than -.
11
13
(ii) The Limit Option Index Value shall be determined by the
Determination Agent, which determination shall be conclusive and binding for all
purposes relating to such exercise.
(iii) In the event that the Spot Index Value for the first
Business Day following the Business Day that such Exercise Notice has been
received (or shall be deemed to have been received) (i.e., for the day that, but
for the provisions of this Section 2.02(f), would be the Valuation Date for such
Warrants) has declined by - or more points from the Limit Option Index Value for
such Warrants, such Warrants (A) shall not be subject to exercise and shall be
treated for all purposes of this Agreement and each Global Warrant Certificate
as if the related Exercise Notice had never been received by the Warrant Agent,
and (B) shall not constitute "Exercised Warrants" for purposes of Section
2.02(b). If such Spot Index Value has not declined by - or more points from such
Limit Option Index Value, such Warrants shall be subject to exercise as provided
in this Section 2.02 and shall be deemed to be "Exercised Warrants" for such
purposes. The Warrant Agent's determination shall be conclusive and binding for
all purposes relating to such Warrants.
(iv) Once elected by a Warrantholder in connection an exercise
of Warrants, the Limit Option will continue to apply, on the basis of the Limit
Option Index Value as initially determined for such Warrants, even if the
Valuation Date for such Warrants is postponed, except when such Valuation Date
is postponed to a date of automatic exercise of Warrants. Pursuant to the Limit
Option, such Warrants will either (a) be exercised on a delayed basis if the
Spot Index Value on any applicable postponed Valuation Date is not less than the
Limit Option Index Value by - or more points or (b) not be exercised if, on any
applicable postponed Valuation Date, the Spot Index Value is less than the Limit
Option Index Value by - or more points.
SECTION 2.03. Market Disruption Events (a) If the Company
determines that on a Business Day that would otherwise be a Valuation Date (an
"Applicable Business Day") a Market Disruption Event has occurred and is
continuing, then the Cash Settlement Value in respect of an exercise of Warrants
shall be calculated using as the Valuation Date the next Business Day following
such Applicable Business Day on which there is no Market Disruption Event or
Extraordinary Event (as defined below); provided that, if no such Business Day
shall occur prior to the Expiration Date or the Delisting Date, if any, then the
provisions of Section 2.06 or 2.07 will apply. The Company shall promptly give
notice to Warrantholders, by publication in a newspaper with a national
circulation, if a Market Disruption Event shall have occurred.
"Market Disruption Event" means any of the following events,
as determined by the Determination Agent.
(i) The suspension or material limitation of trading in 20% or
more of the underlying stocks which then comprise the Index for more than two
hours of trading or during the one-half hour period preceding the close of
trading on the principal securities exchange on which such stocks are traded.
For purposes of this definition, limitations on trading during significant
market fluctuations imposed pursuant to any rule or regulation of similar scope
to New York Stock Exchange ("NYSE") Rule 80B (or any applicable rule or
regulation (A) enacted or
12
14
promulgated by the NYSE, any other self regulatory organization or the SEC of
similar scope or as a replacement for Rule 80B, as determined by the
Determination Agent, or (B) enacted or promulgated by any such securities
exchange, any self regulatory organization or relevant regulatory authority, as
determined by the Determination Agent), shall be considered "material;"
(ii) The suspension or material limitation, in each case, for
more than two hours of trading or during the one-half hour period preceding the
close of trading (whether by reason of movements in price otherwise exceeding
levels permitted by the relevant exchange or otherwise) in (A) if futures
contracts related to the Index or options on such futures contracts are then
approved for trading, and are traded on any major U.S. or foreign exchange, such
contracts or options or (B) options contracts related to the Index which are
traded on any major U.S. or foreign exchange; or
(iii) The unavailability, through a recognized system of
public dissemination of transaction information, for more than two hours of
trading or during the one-half hour period preceding the close of trading, of
accurate price, volume or related information in respect of 20% or more of the
underlying stocks which then comprise the Index or in respect of futures
contracts related to the Index, options on such futures contracts or options
contracts related to the Index, in each case traded on any major U.S. or foreign
exchange.
For purposes of determining whether a Market Disruption Event
has occurred: (i) a limitation on the hours or number of days of trading will
not constitute a Market Disruption Event if it results from an announced change
in the regular business hours of the relevant exchange or market, (ii) a
decision to discontinue trading permanently in the relevant futures or options
contract will not constitute a Market Disruption Event, (iii) any suspension in
trading in a futures or options contract on the Index by a major securities
market by reason of (x) a price change violating limits set by such securities
market, (y) an imbalance of orders relating to such contracts or (z) a disparity
in bid and ask quotes relating to such contracts, will constitute a Market
Disruption Event, notwithstanding that the duration of such suspension or
material limitation is less than two hours, (iv) a "suspension or material
limitation" on an exchange or in a market will include a suspension or material
limitation of trading by one class of investors provided that such suspension
continues for more than two hours of trading or during the last one-half hour
period preceding the close of trading on the relevant exchange or market (but
will not include limitations imposed on certain types of trading under NYSE Rule
80A) and will not include any time when such exchange or market is closed for
trading as part of such exchange's or market's regularly scheduled business
hours and (v) the occurrence of an Extraordinary Event described in clause (i)
of the definition of Extraordinary Event will not constitute, and will supersede
the occurrence of, a Market Disruption Event.
SECTION 2.04. Extraordinary Events (a) If the Company
determines that an Extraordinary Event has occurred and is continuing on an
Applicable Business Day, then the Cash Settlement Value with respect to an
exercise of Warrants shall be calculated on the basis that the Valuation Date
shall be the next Business Day following an Applicable Business Day on which
there is no Extraordinary Event or Market Disruption Event; provided that, if no
such Business Day shall occur prior to the Expiration Date or the Delisting
Date, if any, then the provisions of Section 2.06 or 2.07 will apply. The
Company shall promptly give notice to Warrantholders, by
13
15
publication in a newspaper with a national circulation, if an Extraordinary
Event shall have occurred.
"Extraordinary Event" means any of the following events:
(i) a suspension, material limitation or absence of trading of
all of the stocks of U.S. issuers comprising the Index;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court of any jurisdiction, any
administrative agency or any other governmental authority that would make it
unlawful for the Company to perform any of its obligations under the Warrant
Agreement or the Warrants or that has had or is reasonably expected to have a
material adverse effect on the ability of (A) the Company to perform its
obligations under the Warrants or to hedge or modify the hedge of its position
with respect to the Warrants or (B) any affiliate of the Company to hedge or
modify the hedge of its position with respect to any hedging transaction entered
into with the Company in connection with the Company's obligations under the
Warrants; or
(iii) any outbreak or escalation of hostilities or other
national or international calamity or crisis (including, without limitation,
natural calamities that in the opinion of the Determination Agent may materially
and adversely affect the economy of the United States or the trading of
securities generally on the CBOE, NYSE or the National Association of Securities
Dealers Automated Quotations system, or any other securities exchange) that has
had or is reasonably expected to have a material adverse effect on the ability
of (A) the Company to perform its obligations under the Warrants or to modify
the hedge of its position with respect to the Warrants or (B) any affiliate of
the Company to hedge or modify the hedge of its position with respect to any
hedging transaction entered into with the Company in connection with the
Company's obligations under the Warrants.
For the purpose of determining whether an Extraordinary Event
has occurred: (i) a limitation on the hours or number of days of trading will
not constitute an Extraordinary Event if it results from an announced change in
the regular business hours of the relevant exchange or market and (ii) a
"suspension or material limitation" on an exchange or in a market will include a
suspension or material limitation of trading by one class of investors provided
that such suspension continues for more than two hours of trading or during the
last one-half hour period preceding the close of trading on the relevant
exchange or market (but will not include limitations imposed on certain types of
trading under NYSE Rule 80A) and will not include any time when such exchange or
market is closed for trading as part of such exchange's or market's regularly
scheduled business hours.
SECTION 2.05. Cancellation of Warrants (a) If the Company at
any time prior to the Expiration Date or, if applicable, the Extended Expiration
Date, determines that an Extraordinary Event has occurred and is continuing, and
if the Extraordinary Event is expected by the Company to continue, the Company
may immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such notice is given being the "Cancellation Date"), and
each Warrantholder's rights under the Warrants and the Warrant Agreement shall
thereupon
14
16
cease; provided that each Warrant shall be automatically exercised using as the
Valuation Date the Cancellation Date, and the holder of each such Warrant will
receive, in lieu of the Cash Settlement Value of such Warrant, the Alternative
Settlement Amount (as defined herein), determined by the Determination Agent.
The Company shall promptly give Warrantholders, by publication in a newspaper
with a national circulation, of any such cancellation.
The "Alternative Settlement Amount" (which will be calculated
by the Determination Agent) will equal an amount in U.S. dollars equal to the
sum of (A) the Intrinsic Value (as defined herein) and (B) the product of (i)
the quotient obtained by dividing $- by 2 and (ii) the quotient obtained by
dividing (x) the total number of days from, but excluding, the Cancellation Date
or Delisting Date, whichever has given rise to the payment of the Alternative
Settlement Amount for such Warrants, to and including the Expiration Date and
(y) the total number of days from, but excluding, the date on which sales of the
Warrants were initially confirmed, to and including the Expiration Date.
Intrinsic Value = the Cash Settlement Value of the Warrants
determined pursuant to Section 2.02(c) on the applicable Valuation Date but
calculated with a Spot Index Value on the applicable Valuation Date determined
by the Determination Agent which, subject to approval by the Company (such
approval not to be unreasonably withheld), in the reasonable opinion of the
Determination Agent, fairly reflects the Spot Index Value on the applicable
Valuation Date; provided, however, that if a Cancellation Date falls on (i) the
Expiration Date, (ii) the Extended Expiration Date or (iii) any of the two
Business Days immediately preceding either the Expiration Date or the Extended
Expiration Date, then the Spot Index Value with respect to such date shall be
calculated so as to reflect the value of the Index at the opening of trading on
the CBOE on such date.
In calculating the Alternative Settlement Amount on the
Extended Expiration Date or on any Cancellation Date or Delisting Date falling
between the Expiration Date and the Extended Expiration Date (inclusive), the
Alternative Settlement Amount shall equal the Intrinsic Value.
For the purposes of determining "Intrinsic Value" in the above
formula, in the event that the Determination Agent and the Company have not,
after good faith consultation with each other and within five days following the
first day upon which such Alternative Settlement Amount may be calculated,
agreed upon a Spot Index Value which fairly reflects the value of the Index on
the Cancellation Date, Delisting Date or Extended Expiration Date, whichever
gives rise to the payment of the Alternative Settlement Amount, then the
Determination Agent shall promptly nominate a third party, subject to approval
by the Company (such approval not to be unreasonably withheld), to determine
such figure and calculate the Alternative Settlement Amount. Such party shall
act as an independent expert and not as an agent of the Company or the
Determination Agent, and its calculation and determination of the Alternative
Settlement Amount shall, absent manifest error, be final and binding on the
Company, the Warrant Agent, the Determination Agent and the Warrantholders. Any
such calculations will be made available to a Warrantholder for inspection at
the Warrant Agent's Office. Neither the Company, the Determination Agent, the
Warrant Agent nor any third party shall have any responsibility for good faith
errors or omissions in calculating the Alternative Settlement Amount.
15
17
SECTION 2.06. Extension Events (a) If a Market Disruption
Event or an Extraordinary Event is continuing on the Expiration Date (an
"Extension Event"), the term of any outstanding Warrants will be extended for a
period of 30 days (the thirtieth day following the Expiration Date being the
"Extended Expiration Date"); provided that, if the Cash Settlement Value of the
Warrants would have been zero if the Warrants had been exercised, using as the
Valuation Date the Measurement Date (as defined below), then, notwithstanding
any other provision of the Warrants, the term of the Warrants will not be
extended, the Cash Settlement Value will be zero and the Warrants will be deemed
to be worthless. Following an Extension Event, the Warrants will expire on the
earlier of: (i) the first Business Day on which no Market Disruption Event and
no Extraordinary Event shall be occurring (the "Early Extended Expiration
Date"), (ii) a Delisting Date falling between the Expiration Date and the
Extended Expiration Date, [(iii) a Cancellation Date falling between the
Expiration Date and the Extended Expiration Date] and (iv) the Extended
Expiration Date. The Company will give the Warrant Agent prompt notice by
telephone or facsimile transmission and will give prompt notice to the
Warrantholders by publication in a newspaper with a national circulation of the
occurrence of an Extension Event, any Extended Expiration Date and any Delisting
Date.
"Measurement Date" means the Business Day occurring most
recently prior to the Expiration Date on which none of the events described in
the definition of Market Disruption Event or Extraordinary Event had occurred or
was continuing.
(b) Any Warrants that expire on the Extended Expiration Date
or the Early Extended Expiration Date will be deemed to be exercised
automatically on the Extended Expiration Date or the Early Extended Expiration
Date, as the case may be, using as the Valuation Date for such exercise the
Extended Expiration Date or Early Extended Expiration Date, and the holder of
each such Warrant will receive the Cash Settlement Value, in the case of the
Early Extended Expiration Date, or the Alternative Settlement Amount in the case
of the Extended Expiration Date.
In the case of Warrants as to which there has been a postponed
Valuation Date resulting from an Extraordinary Event or a Market Disruption
Event (including an Extension Event) or as a result of the exercise of Warrants
in a number exceeding the maximum permissible amounts, the Company will be
required to make available to the Warrant Agent no later than 3:00 P.M., New
York City time, on the third Business Day following the date on which the Cash
Settlement Value or Alternative Settlement Amount, as the case may be, has been
calculated (the "Alternative Funding Date"), New York Clearing House or next day
funds in an amount equal to, and for the payment of, the aggregate Cash
Settlement Value or Alternative Settlement Amount, as applicable, for such
Warrants. In the case of Warrants held through the facilities of DTC, if the
Company has made such funds available by such time as noted above, the Warrant
Agent will thereafter be responsible for making funds available to DTC in an
amount sufficient to pay the Cash Settlement Value or Alternative Settlement
Amount of the Warrants, if applicable, prior to the close of business on the
Alternative Funding Date. DTC will be responsible for disbursing such funds to
each appropriate Participant and such Participant will be responsible for
disbursing such payments to the Warrantholders it represents and to each
brokerage firm for which it acts as agent. Each such brokerage firm will be
responsible for disbursing funds to the Warrantholders it represents.
16
18
SECTION 2.07. Delisting of Warrants In the event the Warrants
are delisted from, or permanently suspended from trading on (within the meaning
of the Securities and Exchange Act of 1934, as amended), the CBOE and not
accepted at the same time for listing on another United States national
securities exchange, Warrants not previously exercised will be deemed
automatically exercised on the Delisting Date, and the Cash Settlement Value or,
in the event that the Company determines that a Market Disruption Event or
Extraordinary Event has occurred and is continuing on the Delisting Date, the
Alternative Settlement Amount, as the case may be, shall be calculated and
settled as provided in Section 2.05; provided, however, that if a Delisting Date
falls on (i) the Expiration Date, (ii) the Extended Expiration Date or (iii) any
of the two Business Days immediately preceding either the Expiration Date or the
Extended Expiration Date, then the Spot Index Value with respect to such date
shall be calculated so as to reflect the value of the Index at the opening of
trading on the CBOE on such date. The Company will notify the Warrant Agent, who
will notify the Warrantholders as soon as practicable of such delisting or
trading suspension. However, if the Company first receives notice of the
delisting or suspension on the same day on which the Warrants are delisted or
suspended, such day will be deemed the Delisting Date.
SECTION 2.08. Automatic Exercise of Warrants. All Warrants for
which the Warrant Agent has not received an Exercise Notice in proper form at or
prior to 3:00 p.m., New York City time, on the earlier of (i) the fourth
Business Day preceding the Expiration Date (subject to extension), (ii) the
Extended Expiration Date, (iii) the Early Extended Expiration Date, (iv) a
Cancellation Date or (v) a Delisting Date, or for which the Warrant Agent has
received an Exercise Notice in proper form but with respect to which timely
delivery of the relevant Warrants has not been made, will be deemed
automatically exercised on such date without any requirement of an Exercise
Notice to the Warrant Agent. The Exercise Date for such Warrants shall be the
Expiration Date, the Extended Expiration Date, the Early Extended Expiration
Date, the Cancellation Date or the Delisting Date, as the case may be, or if
such date is not a Business Day, the next succeeding Business Day.
The Warrant Agent shall by 5:00 p.m., New York City time, on
the Expiration Date, the Extended Expiration Date, the Early Extended Expiration
Date, the Cancellation Date or the Delisting Date, as the case may be, notify
the Company (and such other parties (not to exceed two) as the Company shall
designate in writing) of the number of Warrants to be automatically exercised on
such day. The Warrant Agent shall (i) by 3:00 p.m., New York City time, on the
Business Day next succeeding the Valuation Date, calculate for such Warrants the
Cash Settlement Value or Alternative Settlement Amount, as applicable (in the
manner provided in Section 2.02(c)) of the Warrants to be automatically
exercised, (ii) by 5:00 p.m., New York City time, on the Business Day next
succeeding such Valuation Date, notify the Company (and such other parties (not
to exceed two) as the Company shall designate in writing) of the Cash Settlement
Value or Alternative Settlement Amount, as applicable, payable in respect of
such exercised Warrants and (iii) advise the Company of such other matters
relating to the exercised Warrants as the Company shall reasonably request.
The Company shall make available to the Warrant Agent, not
later than 3:00 p.m., New York City time, on the third Business Day following
the Valuation Date for automatically exercised Warrants (the "Automatic
Settlement Date"), funds in an amount sufficient to pay the
17
19
aggregate Cash Settlement Value or Alternative Settlement Amount, as applicable,
of such Warrants. Subject to such funds having been made available as provided
in the preceding sentence, the Warrant Agent will be responsible for making
funds available to the Depository in accordance with procedures agreed upon
between the Depository and the Warrant Agent, against receipt of the Global
Warrant Certificate, after 3:00 p.m., New York City time, but prior to the close
of business, on the Automatic Settlement Date, such funds to be in an amount
equal to the aggregate Cash Settlement Value or Alternative Settlement Amount,
as applicable, of the Warrants subject to such automatic exercise. The
Depository will be responsible for disbursing such funds to each appropriate
Participant, and such Participant will be responsible for disbursing such
payments to the Warrantholders it represents and to each brokerage firm for
which it acts as agent. Each such brokerage firm will be responsible for
disbursing funds to the Warrantholders it represents.
SECTION 2.09. Minimum and Maximum Number of Exercisable
Warrants. (a) All exercises of Warrants are subject to the requirement that no
fewer than - Warrants may be exercised by a Warrantholder at any one time,
except in the case of automatic exercise of Warrants. In addition, Warrants held
through one Participant (including participants in Euroclear and CEDEL) may not
be combined with Warrants held through another Participant in order to satisfy
the minimum exercise requirement set forth above.
(b) All exercises of Warrants (except in the case of automatic
exercise of Warrants) shall be subject, at the Company's option, to the
limitation that not more than - Warrants in total may be exercised on any
Exercise Date and not more than - Warrants may be exercised by or on behalf of
any person or entity, either individually or in concert with any other person or
entity, on any Exercise Date. If any Business Day would otherwise, under the
terms hereof, be the Exercise Date in respect of more than - Warrants, then at
the Company's election (by giving notice thereof to the Warrant Agent not later
than 5:00 p.m., New York City time, on the Business Day immediately following
such Exercise Date), - of such Warrants shall be deemed exercised on such
Exercise Date (selected by the Warrant Agent on a pro rata basis, but if, as a
result of such pro rata selection, any registered holders would be deemed to
have exercised fewer than - Warrants, then the Warrant Agent shall first select
additional Warrants of such holders so that no such holder shall be deemed to
have exercised fewer than - Warrants), and the remainder of such Warrants (the
"Remaining Warrants") shall be deemed exercised on the following Business Day
(notwithstanding the minimum exercise requirement of this Section 2.09 and
subject to successive applications of this Section 2.09). Remaining Warrants
shall be deemed exercised in the order of their respective initial Exercise
Dates, and Remaining Warrants shall be deemed exercised before any other
Warrants initially exercised after such Remaining Warrants. If any individual
Warrantholder attempts to exercise more than - Warrants on any Business Day,
then at the Company's election (as notified to the Warrant Agent by giving
notice thereof to the Warrant Agent not later than 5:00 p.m., New York City
time, on the Business Day following such Business Day) - of such Warrants shall
be deemed exercised on such Business Day and the remainder shall be deemed
exercised on the following Business Day (notwithstanding the minimum exercise
requirement of this Section 2.09 and subject to successive applications of this
Section 2.09). The date on which any Warrant is deemed exercised under the
preceding sentences shall for all purposes of this Agreement be the "Exercise
Date" in respect of such Warrant.
18
20
SECTION 2.10. Covenant of the Company. The Company covenants,
for the benefit of the Warrantholders, that (a) it will use its best efforts to
maintain the listing of the Warrants on the CBOE and that it will not seek the
delisting of the Warrants, or suspension of their trading on, the CBOE unless
prior to such delisting or suspension the Warrants shall have been listed, and
shall be trading, on another national securities exchange or securities
association and (b) upon written request it will furnish any Warrantholder with
a list of the then current Underlying Shares.
SECTION 2.11. Return of Money Held Unclaimed for Two Years.
Except as otherwise provided herein, any money deposited with or paid to the
Warrant Agent for the payment of the Cash Settlement Value or Alternative
Settlement Amount, as the case may be, of any Warrants and not applied but
remaining unclaimed for two years after the date upon which such Cash Settlement
Value or Alternative Settlement Amount, as the case may be, shall have become
due and payable shall be repaid by the Warrant Agent to the Company and the
holders of such Warrants shall thereafter look only to the Company for any
payment which such holders may be entitled to collect and all liability of the
Warrant Agent with respect to such money shall thereupon cease; provided,
however, that the Warrant Agent, before making any such repayment, may at the
expense of the Company notify the Participants concerned, that said money has
not been so applied and remains unclaimed and that after a date named in the
notification any unclaimed balance of said money then remaining will be returned
to the Company.
SECTION 2.12. Return of Global Warrant Certificate. At such
time as all of the Warrants evidenced by a Global Warrant Certificate have been
exercised (including pursuant to an automatic exercise) and all payments to the
Participants made as provided herein, the Warrant Agent shall destroy the
canceled Global Warrant Certificate (unless instructed by the Company to deliver
the Global Warrant Certificate to the Company) and shall provide a certificate
of destruction to the Company.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Warrantholder,
without the consent of the Warrant Agent, may, in and for its own behalf,
enforce, and may institute and maintain, any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, its right to
exercise, and to receive payment for, its Warrants as provided in this
Agreement.
SECTION 3.02. Merger, Consolidation, Sale, Transfer or
Conveyance If at any time there shall be a merger or consolidation involving the
Company or a sale, transfer, conveyance (other than by way of lease) or other
disposition of substantially all of the assets of the Company, then the
successor or assuming corporation shall succeed to and be substituted for the
Company under this Agreement and the Warrants, with the same effect as if it had
been named
19
21
herein and in any Global Warrant Certificate as the Company. The Company shall
thereupon be relieved of any further obligation hereunder or under the Warrants
and may at any time thereafter be dissolved, wound up or liquidated. In any case
of any such consolidation or merger involving the Company or sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, any changes in phraseology and form (but not in substance) that may be
appropriate may be made in the Global Warrant Certificates delivered thereafter.
The Warrant Agent may rely on a written opinion of counsel as
conclusive evidence that any such consolidation or merger involving the Company
or sale, transfer, conveyance (other than by way of lease) or other disposition
of substantially all of the assets of the Company complies with the provisions
of this Section 3.02.
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company. In the event
the Company shall purchase or otherwise acquire Warrants, such Warrants may, at
the option of the Company, be surrendered free through a Participant to the
Depository for credit to the account of the Warrant Agent maintained at the
Depository, and if so credited, the Warrant Agent shall promptly note the
cancellation of such Warrants by notation on the records of the Warrant Agent.
Such Warrants may also, at the option of the Company, be resold by the Company
directly or to or through any of its affiliates in lieu of being surrendered to
the Depository.
Any canceled Global Warrant Certificate held by the Warrant
Agent under this Agreement shall be destroyed by the Warrant Agent unless
otherwise directed by the Company, and the Warrant Agent shall deliver a
certificate of destruction to the Company evidencing the same.
SECTION 4.02. Payment of Taxes. The Company will pay all
stamp, withholding and other duties, if any, attributable to the initial
issuance of Warrants; provided, however, that, anything in this Agreement to the
contrary notwithstanding, the Company shall not be required to pay any tax or
other governmental charge which may be payable in respect of any transfer
involving any beneficial or record interest in, or ownership interest of, any
Warrants, which tax or other governmental charge shall be paid by the
appropriate Warrantholder.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. (a) The Company hereby appoints
Citibank, N.A. ("Citibank") as Warrant Agent of the Company in respect of the
Warrants upon the terms and subject to the conditions set forth herein; and
Citibank hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it in this
20
22
Agreement and such further powers and authority to act on behalf of the Company
as the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in any Global
Warrant Certificate are subject to and governed by the terms and provisions
hereof.
(b) Citibank covenants and agrees to maintain an office,
staffed by qualified personnel, with adequate facilities for the discharge of
its responsibilities under this Agreement, including, without limitation, the
computation of the Cash Settlement Value and the timely settlement of the
Warrants upon exercise thereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Warrantholders shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services rendered by the
Warrant Agent and to reimburse the Warrant Agent for its reasonable
out-of-pocket expenses (including attorneys' fees and expenses) incurred by the
Warrant Agent without negligence, bad faith or breach of this Agreement on its
part in connection with the services rendered by it hereunder. The Company also
agrees to indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense (including reasonable attorneys' fees and expenses)
incurred without negligence, bad faith or breach of this Agreement on the part
of the Warrant Agent, arising out of or in connection with its acting as such
Warrant Agent hereunder, as well as the reasonable costs and expenses of
defending against any claim of liability in the premises.
(b) In acting under this Agreement, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the owners or holders of the
Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to
it, and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion of such counsel.
(d) The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by it in
reliance upon any notice, direction, consent, certificate, affidavit, statement
or other paper or document reasonably believed by it to be genuine and to have
been presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors and
employees, may become the owner of, or acquire any interest in, any Warrants or
other obligations of the Company, with the same rights that it or they would
have if it were not the Warrant Agent hereunder and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depository, trustee or agent
for, any
21
23
committee or body of holders of Warrants or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder.
(f) The Warrant Agent shall not be under any liability for
interest on any monies at any time received by it pursuant to any of the
provisions of this Agreement nor shall it be obligated to segregate such monies
from other monies held by it, except as required by law. The Warrant Agent shall
not be responsible for advancing funds on behalf of the Company.
(g) The Warrant Agent shall not be under any responsibility
with respect to the validity or sufficiency of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the Warrant
Agent) or with respect to the validity or execution of the Global Warrant
Certificates (except its countersignature thereof).
(h) The recitals contained herein and in the Global Warrant
Certificates (except as to the Warrant Agent's countersignature thereon) shall
be taken as the statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of the same.
(i) The Warrant Agent shall be obligated to perform such
duties as are herein specifically set forth, and no implied duties or
obligations shall be read into this Agreement against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
likely to involve it in any expense or liability, the payment of which is not,
in its reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the application by the
Company of any proceeds. The Warrant Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its covenants or
agreements contained in any Global Warrant Certificate or in the case of the
receipt of any written demand from a holder of a Warrant with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 6.02 hereof, to make any demand upon
the Company.
SECTION 5.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the Warrantholders, that there shall at
all times be a Warrant Agent hereunder until all the Warrants are no longer
outstanding or until monies for the payment of all outstanding Warrants, if any,
shall have been paid to the Warrant Agent and shall have been returned to the
Company as provided in Section 2.11, whichever occurs earlier.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective, subject to the
appointment of a successor Warrant Agent and acceptance of such appointment by
such successor Warrant Agent as hereinafter provided. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall take
effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a banking institution organized under
the laws of the United States of America or one of the states thereof and having
an office south of Xxxxxxxx Street in the Borough of Manhattan, The City of New
22
24
York) and the acceptance of such appointment by such successor Warrant Agent. In
the event a successor Warrant Agent has not been appointed and accepted its
duties within 90 days of the Warrant Agent's notice of resignation, the Warrant
Agent may apply to any court of competent jurisdiction for the designation of a
successor Warrant Agent. The obligation of the Company under Section 5.02(a)
shall continue to the extent set forth therein notwithstanding the resignation
or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall give notice of
its intent to resign, or shall be removed, or shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or make an assignment for the
benefit of its creditors, or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be promptly appointed by the Company by an instrument in writing, filed
with the successor Warrant Agent. Upon the appointment as aforesaid of a
successor Warrant Agent and acceptance by the latter of such appointment, the
Warrant Agent so superseded shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trust, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the corporate trust assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. (a) This Agreement and the terms of
the Warrants may be amended by the Company, the Warrant Agent and the
Determination Agent, without the consent of the Warrantholders, for the purpose
of curing any ambiguity, or of curing, correcting or supplementing any defective
or inconsistent provision contained herein or therein, to maintain
23
25
the Warrants' listing on the CBOE or any other national securities exchange or
securities association on which they are then listed, to reflect the issuance by
the Company of additional warrants or in any other manner which the Company may
deem necessary or desirable and which, as determined by the Company in its sole
discretion, will not adversely affect the interests of the holders of the
Warrants.
(b) The Company, the Warrant Agent and the Determination Agent
may modify or amend this Agreement, with the consent of Warrantholders holding
not less than a majority in number of the then outstanding Warrants affected by
such modification or amendment, for any purpose; provided, however, that no such
modification or amendment that changes the determination of the Cash Settlement
Value or Alternative Settlement Amount of a Warrant (or any aspects of such
determination) so as to reduce the amount receivable upon exercise of a Warrant,
shortens the period of time during which the Warrants may be exercised, or
otherwise materially and adversely affects the exercise rights of the
Warrantholders or reduces the percentage of the number of outstanding Warrants,
the consent of whose holders is required for modification or amendment of this
Agreement, may be made without the consent of each Warrantholder affected
thereby.
SECTION 6.02. Successor Index. In the event that the Company,
in its sole discretion, determines that it is necessary or appropriate to use a
Successor Index (as defined in Exhibit A hereto) to the Index, the Company shall
give notice to the Warrant Agent, which shall then promptly notify the
Warrantholders (in the manner provided in Section 6.05), to the effect that (a)
a Successor Index will replace the Index and (b) pursuant to the Warrant
Agreement and the Warrants, such Successor Index will be used in place of the
Index for all purposes relating to the Warrants, and the Company shall make
available to the Warrantholders, upon request, a written description of the
manner in which such Successor Index is determined.
SECTION 6.03. Notices and Demands to the Company, the Warrant
Agent and the Determination Agent. If the Warrant Agent or the Determination
Agent shall receive any notice or demand addressed to the Company by any
Warrantholder pursuant to the provisions of this Agreement, the Warrant Agent or
the Determination Agent, as the case may be, shall promptly forward such notice
or demand to the Company.
SECTION 6.04. Addresses for Notices. Any communications to the
Warrant Agent with respect to this Agreement shall be addressed to Citibank,
N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Department (telephone: (000) 000-0000; facsimile: (000) 000-0000), and any
communications to the Company with respect to this Agreement shall be addressed
to Xxxxxxx Xxxxx Xxxxxx Holdings Inc., -, New York, New York -, Attention: -
(telephone: (212) -; facsimile: (212) -), and any communications to the
Determination Agent with respect to this Agreement shall be addressed to Xxxxx
Xxxxxx Inc., Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxx (telephone: (212) -; facsimile: (212) - (or such other address as
shall be specified in writing by the Warrant Agent, the Company or the
Determination Agent, respectively).
24
26
SECTION 6.05. Notices to Holders. The Company may cause to
have notice given to the Warrantholders by providing the Warrant Agent with a
form of notice to be distributed by the Depository to Participants in accordance
with the custom and practices of the Depository.
SECTION 6.06. Obtaining of Approvals. The Company will from
time to time take all action which may be necessary to obtain and keep effective
(a) any and all permits, consents and approvals of governmental agencies and
authorities and the CBOE or any successor United States national securities
exchange and (b) any and all filings or notices under United States Federal and
state securities laws, which may be or become required in connection with the
issuance, sale, trading, transfer or delivery of the Global Warrant Certificates
or the exercise of the Warrants.
SECTION 6.07. Persons Having Rights Under This Agreement.
Nothing in this Agreement expressed or implied and nothing that may be inferred
from any of the provisions hereof is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the Company, the Warrant
Agent, the Determination Agent, the registered holder of the Global Warrant
Certificates and the Warrantholders any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, the Determination Agent, and their
respective successors, the registered holder of the Global Warrant Certificates
and of the Warrantholders.
SECTION 6.08. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the Warrant Agent's
Office for inspection by the Warrantholders, Participants or any person
certified by any Participant to be an indirect participant of the Depository or
any person certified by any Participant to be a Warrantholder, in each case, on
behalf of whom such Participant holds Warrants.
SECTION 6.09. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.10. Counterparts. This Agreement may be executed by
the parties hereto in any number of counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original, but all such
counterparts taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 6.11. APPLICABLE LAW. THIS AGREEMENT AND EACH WARRANT
SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
25
27
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
XXXXXXX XXXXX XXXXXX HOLDINGS INC.,
By:_________________________
Name:
Title:
CITIBANK, N.A.,
By:_________________________
Name:
Title:
XXXXX XXXXXX INC.,
By:_________________________
Name:
Title:
26
28
[Form of Warrant Agreement]
EXHIBIT A
[FORM OF GLOBAL WARRANT CERTIFICATE]
No. ____ CUSIP No. _____________
XXXXXXX XXXXX XXXXXX HOLDINGS INC.
- Call Warrants
on the 1998 TEN + Index
Expiring -, 2000
This certifies that CEDE & Co., or registered assigns, is the
registered holder of _____________ - Call Warrants on the 1998 TEN + Index
Expiring -, 2000 (the "Warrants"). Each Warrant entitles the beneficial owner
thereof (each a "Warrantholder") to receive, subject to the conditions set forth
herein and in the Warrant Agreement (as defined), from Xxxxxxx Xxxxx Barney
Holdings Inc. (the "Company") the cash settlement value in U.S. dollars (rounded
down to the nearest cent) (the "Cash Settlement Value") which is the greater(A)
zero and (B) the product (rounded down to the nearest cent) of (i) the quotient
obtained by dividing (x) the amount, if any, by which the Spot Index Value (as
defined below) for the applicable Valuation Date exceeds the product of (a) 0.8
and (b) the Initial Index Value (as defined below) by (y) the Initial Index
Value and (ii) $10.
The "Initial Index Value" means the value of the Index at the
close of trading on the CBOE on August -, 1998.
The "Spot Index Value" means the value of the Index at the
close of trading on the CBOE on the applicable Valuation Date; provided,
however, that the Spot Index Value with respect to the Expiration Date, any
Early Extended Expiration Date (as defined below) or any Extended Expiration
Date (as defined below) means the value of the Index at the opening of trading
on the CBOE on the applicable Valuation Date.
The Spot Index Value used to determine the Cash Settlement
Value on any Valuation Date will be rounded to the second decimal place (e.g.,
110.00), rounding up if the next succeeding decimal place, without regard to
rounding, is five or higher. Any such Cash Settlement Value will be rounded
downwards, if necessary, to the nearest cent. In no event shall a Warrantholder
be entitled to any interest on any Cash Settlement Value.
Subject to the terms of the Warrant Agreement, each Warrant
may be irrevocably exercised in whole but not in part, at or prior to 3:00 p.m.,
New York City time, on any Business
A-1
29
Day from August -, 1998 until 3:00 p.m., New York City time, on the earlier of
(i) the fourth Business Day immediately preceding -, 2000 (the "Expiration
Date") and (ii) the Delisting Date (as defined herein), if any. Except in the
event of automatic exercise, each Warrant shall be irrevocably exercised upon
receipt by the Warrant Agent of such Warrant delivered free on the records of
the Depository to the Warrant Agent's Depository Participant Account (entitled
Citibank, N.A. Corporate Trust Warrant Agent Account, No. 2659, or such other
account at the Depository as the Warrant Agent shall designate in writing to the
Company) (the "Warrant Account") pursuant to an Exercise Notice to the Warrant
Agent from a Participant, in the case of Warrants held through the facilities of
the Depository, CEDEL, in the case of Warrants held through CEDEL, or a
Euroclear participant, in the case of Warrants held through Euroclear, acting,
directly or indirectly, on behalf of the Warrantholder; provided, however, that
Exercise Notices are subject to rejection by the Warrant Agent as provided
herein. Not fewer than - Warrants may be exercised by or on behalf of any one
Warrantholder at any one time, except in the event of automatic exercise. An
Exercise Notice shall be unconditional.
This Global Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
The Warrants evidenced by this Global Warrant Certificate are
part of a duly authorized issue of Warrants issued by the Company pursuant to a
Warrant Agreement, dated as of July -, 1998 (the "Warrant Agreement"), among the
Company, Citibank, N.A. (the "Warrant Agent") and Xxxxx Xxxxxx Inc. (the
"Determination Agent"), and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions the Warrantholders,
the entities through which such Warrantholders hold their beneficial interests
in the Warrants and the registered holder of this Global Warrant Certificate
consent by acceptance of this Global Warrant Certificate by the Depository and
which Warrant Agreement is hereby incorporated by reference in and made a part
of this Global Warrant Certificate. A copy of the Warrant Agreement is on file
at the Warrant Agent's Office, which is located at 000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
The Warrants constitute direct, unconditional and unsecured
obligations of the Company and rank on a parity with the Company's other
unsecured contractual obligations and with the Company's unsecured and
unsubordinated debt.
Subject to the terms of the Warrant Agreement and this Global
Warrant Certificate, and except for Warrants subject to automatic exercise or
held through the facilities of CEDEL or Euroclear, and subject to the Limit
Option, the "Exercise Date" for a Warrant will be (i) the Business Day on which
the Warrant Agent receives the Warrant and Exercise Notice in proper form with
respect to such Warrant, if received at or prior to 3:00 P.M., New York City
time, on such day, or (ii) if the Warrant Agent receives such Warrant and
Exercise Notice after 3:00 P.M., New York City time, on a Business Day, then the
Business Day next succeeding such Business Day. In the case of Warrants held
through the facilities of CEDEL or Euroclear, except for Warrants subject to
automatic exercise, and subject to the Limit Option, the "Exercise Date" for a
Warrant will be (i) the Business Day on which the Warrant Agent receives the
Exercise Notice in proper form with respect to such Warrant if such Exercise
Notice is received at or prior
A-2
30
to 3:00 P.M., New York City time, on such day; provided that the Warrant is
received by the Warrant Agent by 3:00 P.M., New York City time, on the Valuation
Date (as defined below), or (ii) if the Warrant Agent receives such Exercise
Notice after 3:00 P.M., New York City time, on a Business Day, then the Business
Day next succeeding such Business Day; provided that the Warrant is received by
3:00 P.M., New York City time, on the Valuation Date relating to exercises of
Warrants on such succeeding Business Day. In the event that a Warrant is
received after 3:00 P.M., New York City time, on the Valuation Date, then the
Exercise Date for such Warrant will be the day on which such Warrant is received
or, if such day is not a Business Day, the next succeeding Business Day. In the
case of Warrants held through the facilities of Euroclear, (a) participants must
also transmit, by facsimile, to the Warrant Agent a copy of the Exercise Notice
submitted to Euroclear by 3:00 P.M., New York City time, on the desired Exercise
Date and (b) Euroclear must confirm (a "Euroclear Confirmation") by telex to the
Warrant Agent by 9:00 A.M., New York City time, on the Valuation Date that the
Warrants will be received by the Warrant Agent on such date; provided that if
such telex communication is received after 9:00 A.M., New York City time, on the
Valuation Date, the Company will be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for timely delivery
of such telex communication.
The "Valuation Date" for a Warrant will be the first Business
Day following the Exercise Date, subject to postponement pursuant to the Warrant
Agreement.
Subject to the terms of the Warrant Agreement and except in
the event of automatic exercise, in connection with any exercise of Warrants,
the related Exercise Notice may specify that such exercise is subject to the
condition that the Spot Index Value that would otherwise be used to determine
the Cash Settlement Value of such Warrants shall not have declined by - or more
points from the Limit Option Index Value for such Warrants. "Limit Option Index
Value", with respect to any Warrants subject to the Limit Option, means the Spot
Index Value on the Business Day that such Exercise Notice has been received (or
shall be deemed to have been received). The option of a Warrantholder to
condition an exercise of Warrants is herein referred to as the "Limit Option".
To be valid, such election must be specified in the related Exercise Notice.
Each of the Warrant Agent and the Company shall be entitled to rely conclusively
on such Exercise Notice, as received by the Warrant Agent, in determining
whether such election has been validly made.
The valuation of and payment for any exercised Warrant may be
postponed as a result of an Extraordinary Event or a Market Disruption Event or
as a result of the exercise of a number of Warrants exceeding the maximum
permissible amount as described herein, in which case the Warrantholder will
receive the Cash Settlement Value or, under certain circumstances, the
Alternative Settlement Amount for such Warrant, in either case determined as of
a later date. In addition, the term of any outstanding Warrants may be extended
for a period not to exceed 30 days if a Market Disruption Event or an
Extraordinary Event is continuing on the Expiration Date; provided that, such
Warrants are not deemed to be worthless at that time.
Subject to the terms of the Warrant Agreement, in the event
the Warrants are delisted from, or permanently suspended from trading on (within
the meaning of the Securities
A-3
31
and Exchange Act of 1934, as amended), the CBOE and not accepted at the same
time for listing on another United States national securities exchange, Warrants
not previously exercised will be deemed automatically exercised on the Delisting
Date, in which case the Warrantholder will receive the Cash Settlement Value or,
under certain circumstances, the Alternative Settlement Amount.
All Warrants for which the Warrant Agent has not received an
Exercise Notice in proper form at or prior to 3:00 p.m., New York City time, on
the earlier of (i) the fourth Business Day preceding the Expiration Date
(subject to extension), (ii) the Extended Expiration Date, (iii) the Early
Extended Expiration Date, (iv) a Cancellation Date or (v) a Delisting Date, or
for which the Warrant Agent has received an Exercise Notice in proper form but
with respect to which timely delivery of the relevant Warrants has not been
made, will be deemed automatically exercised on such date without any
requirement of an Exercise Notice to the Warrant Agent.
Subject to the terms of the Warrant Agreement, all exercises
of Warrants are subject to the requirement that no fewer than - Warrants may be
exercised by a Warrantholder at any one time, except in the case of automatic
exercise of Warrants. In addition, all exercises of Warrants (except in the case
of automatic exercise of Warrants) shall be subject, at the Company's option, to
the limitation that not more than - Warrants in total may be exercised on any
Exercise Date and not more than - Warrants may be exercised by or on behalf of
any person or entity, either individually or in concert with any other person or
entity, on any Exercise Date.
Prior to due presentment for registration of transfer, the
Company, the Warrant Agent, and any agent of the Company or the Warrant Agent,
may deem and treat the registered owner hereof as the absolute owner of the
Warrants evidenced hereby (notwithstanding any notation of ownership or other
writing hereon) for any purpose whatsoever, and as the person entitled to
exercise the rights represented by the Warrants evidenced hereby, and neither
the Company nor the Warrant Agent, nor any agent of the Company or the Warrant
Agent, shall be affected by any notice to the contrary.
The Warrant Agent shall, in accordance with the Warrant
Agreement, from time to time register the transfer of this Global Warrant
Certificate in its records (which may be maintained electronically) to be
maintained by it for that purpose at the Warrant Agent's Office upon surrender
hereof, duly endorsed, or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly executed by the
registered holder hereof or by the duly appointed legal representative or duly
authorized attorney thereof, such signature to be guaranteed by a bank or trust
company with a correspondent office in The City of New York or by a member of a
national securities exchange. Upon any such registration of transfer, a new
Global Warrant Certificate shall be issued to the transferee.
Capitalized terms included herein but not defined herein have
the meanings assigned thereto in the Warrant Agreement.
The Warrant Agreement and the terms of the Warrants are
subject to amendment, as provided in the Warrant Agreement.
A-4
32
THIS GLOBAL WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
A-5
33
IN WITNESS WHEREOF, Xxxxxxx Xxxxx Xxxxxx Holdings Inc. has
caused this instrument to be duly executed.
Dated: ________, 19___ XXXXXXX XXXXX BARNEY HOLDINGS INC.,
by
Name:
Title:
[Corporate Seal]
Attest:
--------------------
Assistant Secretary
Countersigned for authentication
purposes only as of the date
above written:
CITIBANK, N.A.,
as Warrant Agent,
by
------------------------
Authorized Officer
A-6
34
[Form of Warrant Agreement]
EXHIBIT B
FORM OF EXERCISE NOTICE
Citibank, N.A.
c/o Citicorp Data Distribution Inc.
000 Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
1. We refer to the Warrant Agreement dated as of July , 1998
(the "Warrant Agreement"), among Xxxxxxx Xxxxx Xxxxxx Holdings Inc. (the
"Company"), , as Warrant Agent (the "Warrant Agent"), and Xxxxx Xxxxxx Inc., as
Determination Agent (the "Determination Agent"). On behalf of certain beneficial
owners, each of whom we certify is exercising no fewer than Warrants that are
covered by this Exercise Notice and whose Warrants have been, or will be,
transferred to the Warrant Agent in accordance with the provisions of the
Representations Letter relating to the Warrants, we hereby irrevocably exercise
- Warrants (the "Tendered Warrants"). We hereby acknowledge that the Warrants
being exercised and this Exercise Notice must be received by you by 3:00 P.M.,
New York City time, on a Business Day in order for the Valuation Date for the
Tendered Warrants to be the Business Day following such Business Day and that,
if the Warrants being exercised and this Exercise Notice are received by you
after 3:00 P.M., New York City time, on a Business Day (or, in the case of
Warrants held through CEDEL or Euroclear, if the Warrants are not received by
3:00 p.m., New York City time, on the first Business Day following such Business
Day) the Valuation Date of the Tendered Warrants shall be the Business Day next
succeeding such Business Day, in each case subject to certain provisions of the
Warrant Agreement.
2. If you determine that this Exercise Notice has not been
duly completed, or is not in proper form, this Exercise Notice will be void and
of no effect and will be deemed not to have been delivered.
X-0-0
00
0. We hereby direct you to make payment to us of amounts
payable to our clients as a result of the exercise of the Warrants hereunder as
follows:
By cashier's check or an official bank check;
By wire transfer to the following U.S. Dollar
bank account in the United States:
(Minimum payments of $100,000 only)
Bank:______________________________
Account No.:_______________________
ABA Routing No.: __________________
Reference: _________________________
4. [ALL/PART OF] the Tendered Warrants covered hereby [ARE/ARE
NOT] subject to the Limit Option.(2)
Number of Warrants subject to the Limit Option (the
"Contingently Tendered Warrants"):___________
5. Each client on whose behalf we are exercising Warrants
pursuant to this Exercise Notice has certified to us that it is not exercising
in excess of - Warrants on behalf of any beneficial owner or in concert with any
other beneficial owner on the date of this Exercise Notice.
6. Each client on whose behalf we are exercising Warrants
pursuant to the Exercise Notice has certified that the number of Contingently
Tendered Warrants and the number of Warrants not subject to the Limit Option
shall in each case not be less than -.
FOR PARTICIPANTS ONLY
7. We hereby certify that we are a Participant of The
Depository Trust Company (the "Depository") with the present right to use and
receive its services.
Capitalized terms used but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
Dated: ____________, 19___
[NAME OF DEPOSITORY PARTICIPANT]
[Participant Number]
[NAME OF EUROCLEAR PARTICIPANT]
[Participant Number]
(2) Separate Notices of Exercise shall be submitted with respect to
Warrants subject to the Limit Option and Warrants not subject to the
Limit Option.
A-1-2
36
[CENTRALE DE LIVRAISON DE VALEURS
MOBILIERES S.A.]
[Participant Number]
By____________________________________
Authorized Signature
Address:
Telephone: (____) ____-_________
A-1-3
37
[Form of Warrant Agreement]
EXHIBIT C
CONFIRMATION OF EXERCISE
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
We hereby confirm receipt of your Exercise Notice with respect
to _______________ Warrants (the "Tendered Warrants") which were transferred by
you to our DTC Participant Account No. 2659. We have found such Notice to be
duly completed and in proper form, and we have verified, in the manner provided
in the Warrant Agreement (the "Warrant Agreement"), dated as of July -, 1998,
among Xxxxxxx Xxxxx Xxxxxx Holdings Inc., Citibank, N.A. and Xxxxx Xxxxxx Inc.,
that you are a Depository Participant. The Valuation Date of the Tendered
Warrants was the close of business on ____________ in New York City.
[As set forth in your Exercise Notice, none of the Warrants
covered thereby is subject to the Limit Option. Accordingly, for purposes
hereof, all such Warrants shall constitute Tendered Warrants, which number we
hereby confirm to be __________________.] [Your Exercise Notice stated that the
Warrants covered thereby are subject to the Limit Option. The applicable Initial
Index Value for such Warrants is _______ and the Spot Index Value for the date
that would otherwise be the Valuation Date for such Warrants is
________________. Such Spot Index Value is not less than such Initial Index
Value by -. Accordingly, for purposes hereof, all such Warrants shall constitute
Tendered Warrants. We hereby confirm the number of such Tendered Warrants to be
______________.]
We hereby confirm that the aggregate Cash Settlement Value of
the Tendered Warrants is $_____________ ($_____ per Warrant), which will be made
available to you by wire transfer to the bank account designated in your
Exercise Notice for payment on the fifth Business Day following the Valuation
Date for such Warrants.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
Dated: _____________, 19___
CITIBANK, N.A., as Warrant Agent,
by
38
Authorized Signature
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
Dated: _____________, 19___
You are hereby notified that [the Exercise Notice delivered by
you was determined by us not to have been [duly completed] [in proper form]]
[such Warrants were not transferred to our DTC Participant Account No. 2659 on a
timely basis as provided in the Warrant Agreement] [we did not receive from
Euroclear a Euroclear Confirmation that proper delivery of the Warrants to which
the Exercise Notice delivered by you relates would be made on a timely basis],
as set forth in the Warrant Agreement (the "Warrant Agreement"), dated as of
July -, 1998, among Xxxxxxx Xxxxx Xxxxxx Holdings Inc., Citibank, N.A. and Xxxxx
Xxxxxx Inc.. Accordingly, we have rejected your Exercise Notice as being
unsatisfactory as to form.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
CITIBANK, N.A., as Warrant Agent,
by
Authorized Signature
39
EXHIBIT D
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
We refer to your Exercise Notice dated ____________, 19___,
with respect to __________ Warrants that were subject to the Limit Option. The
applicable [Initial Index Value] for such Warrants is _____ and the Spot Index
Value for the date that would otherwise be the Valuation Date for such Warrants
is ______. Such Spot Index Value is less than the [Initial Index Value] for such
Warrants by -. Accordingly, we have rejected such Exercise Notice pursuant to
the Limit Option.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement, dated as of July -, 1998,
among Xxxxxxx Xxxxx Xxxxxx Holdings Inc, Citibank, N.A. and Xxxxx Xxxxxx Inc.
Dated: ______________, 19___
CITIBANK, N.A., as Warrant Agent,
by
Authorized Signature
-3-
