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WARRANT AGREEMENT
Dated as of August 24, 1998
by and among
▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc.
and
The Bank of New York
as Warrant Agent
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TABLE OF CONTENTS
SECTION 1. Certain Definitions................................................ 1
SECTION 2. Appointment of Warrant Agent....................................... 5
SECTION 3. Issuance of Warrants; Warrant Certificates......................... 5
SECTION 4. Separation of Warrants............................................. 14
SECTION 5. Registration and Countersignature.................................. 14
SECTION 6. Terms of Warrants; Exercise of Warrants............................ 15
SECTION 7. Payment of Taxes................................................... 17
SECTION 8. Mutilated or Missing Warrant Certificates.......................... 17
SECTION 9. Reservation of Warrant Shares...................................... 17
SECTION 10. [Intentionally Omitted]............................................ 18
SECTION 11. Adjustment of Exercise Price and Number of Warrant Shares.......... 18
SECTION 12. Statement on Warrants.............................................. 26
SECTION 13. No Dilution or Impairment; Capital and Ownership Structure......... 26
SECTION 14. Fractional Interest................................................ 26
SECTION 15. Notices to Warrant Holders......................................... 27
SECTION 16. Merger, Consolidation or Change of Name of Warrant Agent........... 28
SECTION 17. Warrant Agent...................................................... 29
SECTION 18. Resignation and Removal of Warrant Agent; Appointment of Successor. 30
SECTION 19. Registration....................................................... 31
SECTION 20. Reports............................................................ 31
SECTION 21. Rule 144A and Rule 144............................................. 31
SECTION 22. Notices to Company and Warrant Agent............................... 31
SECTION 23. Supplements and Amendments......................................... 32
SECTION 24. Successors......................................................... 32
SECTION 25. Governing Law...................................................... 32
SECTION 26. Benefits of This Agreement......................................... 32
SECTION 27. Counterparts....................................................... 33
WARRANT AGREEMENT, dated as of August 24, 1998 (the "AGREEMENT"),
between ▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc., a Delaware corporation (the
"COMPANY"), and The Bank of New York, as warrant agent (the "WARRANT AGENT").
WHEREAS, the Company proposes to issue warrants, as hereinafter
described (the "WARRANTS"), to purchase up to an aggregate of 172,926 shares of
Common Stock (as defined below), in connection with the offering of an aggregate
of $55,000,000 principal amount at maturity of the Company's 14% Senior Secured
Discount Notes due 2005 (the "NOTES") and 55,000 Warrants, each Warrant
entitling the holder thereof to purchase 3.14411 shares of Common Stock. The
Notes and Warrants will be sold in Units (the "UNITS"), each Unit consisting of
$1,000 principal amount of Notes and one Warrant.
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates (as defined below) and other matters as
provided herein.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company, the Warrant Agent and the Holders (as
defined below), the parties hereto agree as follows:
SECTION 1. Certain Definitions. As used in this Agreement, the
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following terms shall have the following respective meanings:
"144A GLOBAL WARRANT" means a Global Warrant in the form of Exhibit A
hereto bearing the Global Warrant Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
number of the Warrants sold in reliance on Rule 144A.
"AFFILIATE" of any specified Person means (A) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person and (B) any director, officer or
employee of such specified person. For purposes of this definition "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with") as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Warrant, the rules and
procedures of the Depositary, Euroclear and Cedel Bank that apply to such
transfer or exchange.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CEDEL BANK" means Cedel Bank, SA.
"CHANGE OF CONTROL" has the meaning ascribed to such term in the
Indenture.
"CLOSING DATE" means the date hereof.
"COMMISSION" means the Securities and Exchange Commission.
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"COMMON EQUITY SECURITIES" means Common Stock and securities
convertible into, or exercisable or exchangeable for, Common Stock or rights or
options to acquire Common Stock or such other securities, excluding the
Warrants.
"COMMON STOCK" means the common stock, par value $.001 per share, of
the Company, and any other capital stock of the Company into which such common
stock may be converted or reclassified or that may be issued in respect of, in
exchange for, or in substitution for, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
"COMPANY" means ▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc., a Delaware
corporation, and its successors and assigns.
"DEFINITIVE WARRANT" means a certificated Warrant registered in the
name of the holder thereof and issued in accordance with Section 3.5 hereof, in
the form of Exhibit A hereto except that such Warrant shall not bear the Global
Warrant Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Warrant" attached thereto.
"DEPOSITARY" means, with respect to the Warrants issuable or issued in
whole or in part in global form, the Person specified in Section 3.3 hereof as
the Depositary with respect to the Warrants, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DISINTERESTED DIRECTOR" means, in connection with any issuance of
securities that gives rise to a determination of the Fair Market Value thereof,
each member of the Board of Directors who is not an officer, employee, director
or other Affiliate of the party to whom the Company is proposing to issue the
securities giving rise to such determination.
"EUROCLEAR" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE DATE" means any time on or after the Separation Date.
"EXERCISE PRICE" means the purchase price per share of Common Stock to
be paid upon the exercise of each Warrant in accordance with the terms hereof,
which price shall initially be $0.001 per share, subject to adjustment from time
to time pursuant to Sections 11 or 13 hereof.
"GLOBAL WARRANT" means the Warrant in the form of Exhibit A hereto,
issued in accordance with Section 3.1(b) hereof.
"GLOBAL WARRANT LEGEND" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Global Warrants issued under
this Warrant Agreement.
"HOLDER" means a person who owns Registrable Securities.
"IAI WARRANTS" means the Warrants in the form of Exhibit A hereto
bearing the Private Placement Legend issued in certificate form and
denominations equal to the number of Warrants sold to Institutional Accredited
Investors.
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"INDENTURE" means the indenture, dated the date hereof, between the
Company and The Bank of New York, as trustee.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Warrant through a Participant.
"INITIAL PURCHASERS" means ▇▇▇▇▇▇▇▇▇ & Company, Inc. and BT Alex.
▇▇▇▇▇.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"IPO" means the first underwritten offering with gross proceeds of
more than $20.0 million of the Common Stock that is registered under the
Securities Act or admitted to listing on a recognized stock exchange or
automated quotation system.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the City of Chicago, Illinois or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on such payment for the intervening period.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTES" means the 14% Senior Secured Discount Notes due 2005 of the
Company, being issued pursuant to the Indenture.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Warrant Agent in form and substance reasonably
acceptable to the Warrant Agent. The counsel may be an employee of or counsel
to the Company, any subsidiary of the Company or the Warrant Agent.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof, including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
3.5(f)(i) to be placed on all Warrants issued under this Warrant Agreement
except where otherwise permitted by the provisions of this Warrant Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
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"REGISTRABLE SECURITIES" shall have the meaning ascribed to such term
in the Warrant Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of August 24, 1998, by and among the Company and the Initial
Purchasers relating to the Notes.
"REGULATION S" means Regulation S promulgated under the Securities
Act.
"REGULATION S GLOBAL WARRANT" means a Global Warrant in the form of
Exhibit A hereto bearing the Global Warrant Legends, the Private Placement
Legend and the Regulation S Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding number of the Warrants sold in reliance on
Rule 903 of Regulation S.
"RESTRICTED DEFINITIVE WARRANT" means a Definitive Warrant bearing the
Private Placement Legend.
"RESTRICTED GLOBAL WARRANT" means a Global Warrant bearing the Private
Placement Legend.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEPARATION DATE" means the earliest of (i) 180 days following the
Closing Date, (ii) the date of redemption of the Notes, (iii) the date on which
a registration statement with respect to a registered exchange offer for the
Notes is declared effective under the Securities Act, (iv) the date a Shelf
Registration Statement (as defined in the Registration Rights Agreement) with
respect to the Notes is declared effective under the Securities Act, (v) such
date as ▇▇▇▇▇▇▇▇▇ & Company, Inc., in its sole discretion, shall determine, (vi)
in the event of a Change of Control, the date the Company mails the required
notice thereof to the Note holders and (vii) upon an IPO.
"TRUSTEE" means the trustee under the Indenture.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"WARRANT AGENT" means The Bank of New York or the successor or
successors of such Warrant Agent appointed in accordance with the terms hereof.
"WARRANT REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement, dated as of August 24, 1998, by and among the Company, the Initial
Purchasers and Capricorn Investors II, L.P. relating to the Warrants and the
Warrant Shares.
"WARRANT SHARES" means the shares of Common Stock issued or issuable
upon the exercise of the Warrants.
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SECTION 2. Appointment of Warrant Agent. The Company hereby appoints
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the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 3. Issuance of Warrants; Warrant Certificates.
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3.1. Form and Dating.
(a) General.
The Warrants shall be substantially in the form of Exhibit A hereto
(the "WARRANT CERTIFICATES"). The Warrants may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Warrant shall
be dated the date of the countersignature.
The terms and provisions contained in the Warrants shall constitute,
and are hereby expressly made, a part of this Warrant Agreement. The Company
and the Warrant Agent, by their execution and delivery of this Warrant
Agreement, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Warrant conflicts with the express
provisions of this Warrant Agreement, the provisions of this Warrant Agreement
shall govern and be controlling.
(b) Global Warrants.
Warrants issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Warrant Legend thereon and the
"Schedule of Exchanges of Interests in the Global Warrant" attached thereto).
Warrants issued in definitive form shall be substantially in the form of Exhibit
A attached hereto (but without the Global Warrant Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Warrant" attached thereto).
Each Global Warrant shall represent such of the outstanding Warrants as shall be
specified therein and each shall provide that it shall represent the number of
outstanding Warrants from time to time endorsed thereon and that the number of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Warrant to reflect the amount of any increase or
decrease in the number of outstanding Warrants represented thereby shall be made
by the Warrant Agent in accordance with instructions given by the holder thereof
as required by Section 3.5 hereof.
(c) Euroclear and Cedel Procedures Applicable.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Global
Warrant that are held by Participants through Euroclear or Cedel Bank.
3.2. Execution.
An Officer shall sign the Warrants for the Company by manual or
facsimile signature.
If the Officer whose signature is on a Warrant no longer holds that
office at the time a Warrant is authenticated, the Warrant shall nevertheless be
valid.
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A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been authenticated under this Warrant Agreement.
The Warrant Agent shall, upon a written order of the Company signed by
an Officer (a "WARRANT COUNTERSIGNATURE ORDER"), countersign Warrants for
original issue up to the number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the Company to
countersign Warrants. Such an agent may countersign Warrants whenever the
Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as an Agent to deal with the Company or an
Affiliate of the Company.
3.3. Warrant Agent.
The Company shall maintain an office or agency where Warrants may be
presented for registration of transfer or for exchange ("WARRANT AGENT"). The
Warrant Agent shall keep a register of the Warrants and of their transfer and
exchange. The Company may appoint one or more co-Warrant Agents. The term
"WARRANT AGENT" includes any co-Warrant Agent. The Company may change any
Warrant Agent without notice to any holder. The Company shall notify the
Warrant Agent in writing of the name and address of any Agent not a party to
this Warrant Agreement. If the Company fails to appoint or maintain another
entity as Warrant Agent, the Warrant Agent shall act as such. The Company or
any of its subsidiaries may act as Warrant Agent.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Warrants.
The Company initially appoints the Warrant Agent to act as the Warrant
Agent with respect to the Global Warrants.
3.4. Holder Lists.
The Warrant Agent shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all holders. If the Warrant Agent is not the Warrant Agent, the Company shall
furnish to the Warrant Agent at such other times as the Warrant Agent may
request in writing, a list in such form and as of such date as the Warrant Agent
may reasonably require of the names and addresses of the holders of Warrants.
3.5. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Agreement and the procedures of
the Depositary therefor.
(b) Exchange of a Beneficial Interest in a Global Warrant for a
Definitive Warrant.
(i) Any holder of a beneficial interest in a Global Warrant may
upon request exchange such beneficial interest for a Definitive
Warrant. Upon receipt by the Warrant Agent of written instructions or
such other form of instructions as is customary for the
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Depositary from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Warrant and, in the case of a
Registrable Security, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being delivered to the
Person designated by the Depositary as being the beneficial
owner, a certification to that effect (in substantially the form
of Exhibit B hereto);
(B) if such beneficial interest is being transferred (1) to
a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act, or (2) pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act (based on an
opinion of counsel if the Company so requests) or (3) pursuant to
an effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of
Exhibit B hereto);
(C) if such beneficial interest is being transferred to any
institutional "accredited investor," within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act pursuant to a
private placement exemption from the registration requirements of
the Securities Act (based on an opinion of counsel if the Company
so requests), a certification to that effect (in substantially
the form of Exhibit B hereto) and a certification from the
applicable transferee;
(D) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (and based on an opinion of
counsel if the Company so requests), a certification to that
effect (in substantially the form of Exhibit B); or
(E) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements
of the Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect (in
substantially the form of Exhibit B hereto);
then the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and Warrant Agent,
the number of Warrants and Warrant Shares represented by the Global Warrant to
be reduced by the number of Warrants and Warrant Shares to be represented by the
Definitive Warrants to be issued in exchange for the interest of such Person in
the Global Warrant and, following such reduction, the Company shall execute and
the Warrant Agent shall countersign and deliver to the transferee, as the case
may be, a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 3.5(b) shall be
registered in such names as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct
the Warrant Agent. The Warrant Agent shall deliver such Definitive
Warrants to the Persons in whose names such Warrants are so
registered.
(c) Transfer and Exchange of Definitive Warrants.
When Definitive Warrants are presented to the Warrant Agent with a
request:
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(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if its requirements for such transactions are met; provided, however, that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Warrant Agent, duly executed by the holder
thereof or by his or her attorney, duly authorized in writing; and
(y) in the case of Registrable Securities, such request shall be
accompanied by the following additional information and documents, as
applicable:
(A) if such Registrable Security is being delivered to the
Warrant Agent by a holder for registration in the name of such holder,
without transfer, a certification from such holder to that effect (in
substantially the form of Exhibit B hereto);
(B) if such Registrable Security is being transferred (1)
to a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the Securities
Act, or (2) pursuant to an exemption from registration in accordance
with Rule 144 under the Securities Act (and based on an opinion of
counsel if the Company so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a certification to
that effect (in substantially the form of Exhibit B hereto);
(C) if such Registrable Security is being transferred to an
institutional "accredited investor," within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act pursuant to a
private placement exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so
requests), a certification to that effect (in substantially the form
of Exhibit B hereto) and a certification from the applicable
transferee;
(D) if such Registrable Security is being transferred
pursuant to an exemption from registration in accordance with Rule 904
under the Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect (in substantially
the form of Exhibit B hereto); or
(E) if such Registrable Security is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act (and based on an opinion of counsel if the Company
so requests), a certification to that effect (in substantially the
form of Exhibit B hereto).
(d) Restrictions on Exchange or Transfer of a Definitive Warrant for
a Beneficial Interest in a Global Warrant. A Definitive Warrant may not be
exchanged for a beneficial interest in a Global Warrant except upon satisfaction
of the requirements set forth below. Upon receipt by the
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Warrant Agent of a Definitive Warrant, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Warrant Agent,
together with:
(i) if such Definitive Warrant is a Registrable Security,
certification from the holder thereof (in substantially the form of
Exhibit B hereto) to the effect that such Definitive Warrant is being
transferred by such holder either (A) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act, or (B) outside the
United States to a foreign Person in a transaction meeting the
requirements of Rule 904 under the Securities Act (and based on an
opinion of counsel if the Company so requests), or (C) if such
Definitive Warrant is registered pursuant to an effective registration
statement under the Securities Act, certification from the holder
thereof (in substantially the form of Exhibit B hereto) to the effect
that such Definitive Warrant is being transferred to such holder
pursuant to an effective registration statement under the Securities
Act; and
(ii) whether or not such Definitive Warrant is a Registrable
Security, written instructions directing the Warrant Agent to make, or
to direct the Depositary to make, an endorsement on the Global Warrant
to reflect an increase in the number of Warrants and Warrant Shares
represented by the Global Warrant equal to the number of Warrants and
Warrant Shares represented by such Definitive Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants and Warrant Shares represented by the Global Warrant to be increased
accordingly. If no Global Warrants are then outstanding, the Company shall
issue and the Warrant Agent shall countersign a new Global Warrant representing
the appropriate number of Warrants and Warrant Shares.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 3.5), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrants in Absence of Depositary.
If at any time:
(i) the Depositary for the Global Warrants notifies the Company
that the Depositary is unwilling or unable to continue as Depositary
for the Global Warrants and a successor Depositary for the Global
Warrants is not appointed by the Company within 90 days after delivery
of such notice; or
(ii) the Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Definitive
Warrants under this Agreement,
then the Company shall execute, and the Warrant Agent, upon written instructions
signed by an officer of the Company, shall countersign and deliver Definitive
Warrants, in an aggregate number equal to the number of Warrants represented by
the Global Warrants, in exchange for such Global Warrants.
(g) Legends.
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The following legends shall appear on the face of all Global Warrants
and Definitive Warrants issued under this Warrant Agreement unless specifically
stated otherwise in the applicable provisions of this Warrant Agreement.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Warrant and each Definitive Warrant (and all Warrants issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS
ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7)
OR REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR 904 OF THE SECURITIES ACT WHERE THE PURCHASER, PRIOR TO
SUCH TRANSACTION, FURNISHES THE WARRANT AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
WARRANT AGENT) AND, IF SUCH TRANSFER IS IN RESPECT OF A FAIR MARKET
VALUE OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE WARRANT AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT
AGENT) AND, IF SUCH TRANSFER IS IN RESPECT OF A FAIR MARKET VALUE OF
SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
10
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY
IN VIOLATION OF THE FOREGOING."
(B) Notwithstanding the foregoing, any Global Warrant or
Definitive Warrant issued pursuant to subparagraphs (b)(i)(B)(2) or
(3), (c)(y)(B)(2) or (3) or (d)(i)(c) to this Section 3.5 (and all
Warrants issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Warrant Legend. Each Global Warrant shall bear a
legend in substantially the following form:
"THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF THE
WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE WARRANT AGREEMENT, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE WARRANT AGENT FOR CANCELLATION PURSUANT
TO SECTION 3.8 OF THE WARRANT AGREEMENT AND (IV) THIS GLOBAL WARRANT MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY."
(iii) Unit Legend. Each Warrant issued prior to the Separation
Date shall bear a legend in substantially the following form:
"THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED
AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSIST OF
$1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 14% SENIOR SECURED NOTES DUE
2005 OF THE COMPANY (THE "NOTES") AND ONE WARRANT (THE "WARRANT") INITIALLY
ENTITLING THE HOLDER THEREOF TO PURCHASE 3.14411 SHARES OF COMMON STOCK,
PAR VALUE $0.001 PER SHARE, OF THE COMPANY. PRIOR TO THE EARLIEST TO OCCUR
OF (i) 180 DAYS FOLLOWING THE ISSUANCE OF THE WARRANTS, (ii) THE DATE OF
REDEMPTION OF THE NOTES, (iii) THE DATE ON WHICH A REGISTRATION STATEMENT
WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(iv) SUCH DATE AS ▇▇▇▇▇▇▇▇▇ & COMPANY, INC., IN ITS SOLE DISCRETION SHALL
DETERMINE, (v) IN THE EVENT OF A CHANGE OF CONTROL (AS DEFINED IN THE
INDENTURE RELATING TO THE NOTES) OCCURS, THE DATE THE COMPANY MAILS THE
REQUIRED NOTICE THEREOF TO HOLDERS AND (vii) UPON AN IPO (AS DEFINED IN THE
WARRANT AGREEMENT PURSUANT TO WHICH THE WARRANTS HAVE BEEN
11
ISSUED) OF THE COMPANY'S COMMON STOCK. THE WARRANTS EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES."
(iv) Regulation S. Legend. Each Warrant that is a Registrable
Security shall bear the following legend on the fact thereof:
"THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND THE WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. IN ORDER TO EXERCISE THIS
WARRANT, THE HOLDER MUST FURNISH TO THE COMPANY AND THE WARRANT AGENT
EITHER (A) A WRITTEN CERTIFICATION THAT IT IS NOT A U.S. PERSON AND THE
WARRANT IS NOT BEING EXERCISED ON BEHALF OF A U.S. PERSON OR (B) A WRITTEN
OPINION OF COUNSEL TO THE EFFECT THAT THE SECURITIES DELIVERED UPON
EXERCISE OF THE WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR
THAT THE DELIVERY OF SUCH SECURITIES IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. TERMS IN THIS LEGEND HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(h) Cancellation and/or Adjustment of Global Warrants.
At such time as all beneficial interests in a particular Global
Warrant have been exercised or exchanged for Definitive Warrants or a particular
Global Warrant has been exercised, redeemed, repurchased or canceled in whole
and not in part, each such Global Warrant shall be returned to or retained and
canceled by the Warrant Agent in accordance with Section 3.8 hereof. At any
time prior to such cancellation, if any beneficial interest in a Global Warrant
is exercised or exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Warrant or for
Definitive Warrants, the amount of Warrants represented by such Global Warrant
shall be reduced accordingly and an endorsement shall be made on such Global
Warrant by the Warrant Agent or by the Depositary at the direction of the
Warrant Agent to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Warrant, such other Global
Warrant shall be increased accordingly and an endorsement shall be made on such
Global Warrant by the Warrant Agent or by the Depositary at the direction of the
Warrant Agent to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent shall countersign Global
Warrants and Definitive Warrants upon the Company's order or at the
Warrant Agent's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Warrant or to a holder of a Definitive Warrant
for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other
than
12
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 7 hereof).
(iii) All Global Warrants and Definitive Warrants issued upon
any registration of transfer or exchange of Global Warrants or
Definitive Warrants shall be the duly authorized, executed and issued
warrants for Common Stock of the Company, not subject to any
preemptive rights, and entitled to the same benefits under this
Warrant Agreement, as the Global Warrants or Definitive Warrants
surrendered upon such registration of transfer or exchange.
(iv) Prior to due presentment for the registration of a transfer
of any Warrant, the Warrant Agent, any Agent and the Company may deem
and treat the Person in whose name any Warrant is registered as the
absolute owner of such Warrant for all purposes and none of the
Warrant Agent, any agent or the Company shall be affected by notice to
the contrary.
(v) The Warrant Agent shall countersign Global Warrants and
Definitive Warrants in accordance with the provisions of Section 3.2
hereof.
(j) Facsimile Submissions to Warrant Agent.
All certifications, certificates and Opinions of Counsel required to
be submitted to the Warrant Agent pursuant to this Section 3.5 to effect a
registration of transfer or exchange may be submitted by facsimile. The form of
letter of representations referred to in (2)(C) and (E) of the Private Placement
Legend to be furnished to the Warrant Agent are attached hereto as Exhibit D and
E, respectively.
Notwithstanding anything herein to the contrary, as to any
certificates and/or certifications delivered to the Warrant Agent pursuant to
this Section 3.5, the Warrant Agent's duties shall be limited to confirming that
any such certifications and certificates delivered to it are in the form of
Exhibits B attached hereto. The Warrant Agent shall not be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates. As to any Opinions of Counsel delivered
pursuant to this Section 3.5, the Warrant Agent may rely upon, and be fully
protected in relying upon, such opinions.
3.6. Replacement Warrants.
If any mutilated Warrant is surrendered to the Warrant Agent or the
Company and the Warrant Agent receives evidence to its satisfaction of the
destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent, and any agent for
purposes of the countersignature from any loss that any of them may suffer if a
Warrant is replaced. The Company may charge for its expenses in replacing a
Warrant.
Every replacement Warrant is an additional warrant of the Company and
shall be entitled to all of the benefits of this Warrant Agreement equally and
proportionately with all other Warrants duly issued hereunder.
13
3.7. Temporary Warrants
Until certificates representing Warrants are ready for delivery, the
Company may prepare and the Warrant Agent, upon receipt of a Warrant
Authentication Order, shall authenticate temporary Warrants. Temporary Warrants
shall be substantially in the form of certificated Warrants but may have
variations that the Company considers appropriate for temporary Warrants and as
shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent shall countersign
definitive Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the benefits
of this Warrant Agreement.
3.8. Cancellation.
Subject to Section 3.7 hereof, the Company at any time may deliver
Warrants to the Warrant Agent for cancellation. The Warrant Agent and no one
else shall cancel all Warrants surrendered for registration of transfer,
exchange, exercise, replacement or cancellation (subject to the record retention
requirement of the Exchange Act). The Company may not issue new Warrants to
replace Warrants that have been exercised or that have been delivered to the
Warrant Agent for cancellation.
SECTION 4. Separation of Warrants. The Notes and Warrants shall not
----------------------
be separately transferable prior to the Separation Date.
SECTION 5. Registration and Countersignature.
---------------------------------
(a) The Warrant Agent, on behalf of the Company, shall number and
register the Warrant Certificates in a register as they are issued by the
Company.
(b) Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the Board,
the President or the Treasurer of the Company, initially countersign, issue and
deliver Warrants entitling the Holders thereof to purchase not more than the
number of Warrant Shares referred to above in the first recital hereof and shall
countersign and deliver Warrants as otherwise provided in this Agreement.
(c) The Company and the Warrant Agent may deem and treat the
Holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary. Prior to a Separation Date, the
Depository Trust Company shall be deemed the registered Holder of such Warrants
for all purposes hereunder.
SECTION 6. Terms of Warrants; Exercise of Warrants. Subject to the
---------------------------------------
terms of this Agreement, each Warrant Holder shall have the right, which may be
exercised commencing at the opening of business on the Exercise Date to receive
from the Company the number of fully paid and nonassessable Warrant Shares which
the Holder may at the time be entitled to receive on exercise of such Warrants
and payment of the Exercise Price; provided that no Warrant Holder shall be
entitled to exercise such Holder's Warrants at any time, unless, at the time of
exercise (A), (i) a registration statement under the Securities Act relating to
the Warrant Shares has been filed with, and declared effective by, the
Commission, and no stop order suspending the effectiveness of such registration
14
statement has been issued by the Commission or (ii) the issuance of the Warrant
Shares is permitted pursuant to an exemption from the registration requirements
of the Securities Act and (B) such Warrant Shares are qualified for sale or
exempt from qualification under the applicable securities laws of the states in
which the various holders of the Warrants or other Persons to whom it is
proposed that the Warrant Shares be issued on exercise of the Warrants reside.
No adjustments as to dividends will be made upon exercise of the Warrants. Upon
the occurrence of a Change of Control or an IPO, Holders will be required to
exercise their Warrants at such time in the manner set forth in Section 6.
In order to exercise all or any of the Warrants represented by a
Warrant Certificate, (i) in the case of Definitive Warrants, the holder thereof
must surrender for exercise the Warrant Certificate to the Company at the office
of the Warrant Agent at its New York corporate trust office, (ii) in the case of
a book-entry interest in a Global Warrant, the exercising Participant whose name
appears on a securities position listing of the Depositary as the holder of such
book-entry interest must comply with the Depositary's procedures relating to the
exercise of such book-entry interest in such Global Warrant and (iii) in the
case of both Global Warrants and Definitive Warrants, the holder thereof or the
Participant, as applicable, must deliver to the Company at the office of the
Warrant Agent the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be a medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, which is set forth in the form of
Warrant Certificate as adjusted as herein provided, for the number of Warrant
Shares in respect of which such Warrants are then exercised. In addition, if
the holder is exercising warrants sold pursuant to Regulation S, (A) such holder
must certify in writing that (i) it is not a "U.S. person" within the meaning of
Rule 902(k) of Regulation S under the Securities Act, (ii) the Warrants are not
being purchased or exercised on behalf of or for the account or benefit of a
"U.S. person", (iii) such Holder will resell such Warrants only in accordance
with the provisions of Rules 901 through 905 of Regulation S, pursuant to
registration under the Securities Act or pursuant to an available exemption from
registration, and (iv) such Holder will not engage in hedging transactions with
regard to the Warrants and the shares issuable on exercise of such Warrants
unless in compliance with the Securities Act or (B) give a written opinion of
counsel to the effect that the warrant and the securities delivered upon
exercise thereof have been registered under the Securities Act or are exempt
from registration thereunder.
Payment of the aggregate Exercise Price shall be made (i) in cash or
by certified or official bank check, payable to the order of the Company, (ii)
by tendering Notes having an aggregate principal amount at the time of tender,
plus accrued and unpaid interest, if any, thereon, to the date of exercise (or
if such exercise occurs prior to December 1, 2002, an Accreted Value (as defined
in the Indenture) on the date of exercise) equal to the Exercise Price, (iii) by
tendering Warrants having a fair market value equal to the Exercise Price or
(iv) by tendering a combination of cash, Notes and Warrants. For purposes of
clause (iii) above, the fair market value of the Warrants shall be determined as
follows: (A) to the extent the Common Stock is publicly traded and listed on
the Nasdaq National Market or a national securities exchange, the fair market
value shall be equal to the greater of (1) the difference between (a) the
average closing price as quoted on the Nasdaq National Market of the Common
Stock for each of the 10 trading days immediately prior to the exercise date
(or, if the Common Stock is listed on a national securities exchange, the
average closing price as reported on such national securities exchange during
such 10-trading-day period) and (b) the Exercise Price, and (2) zero; or (B) to
the extent the Common Stock is not publicly traded, or otherwise is not listed
on a national securities exchange, the fair market value shall be equal to the
value per share as determined in good faith by the Board of Directors of the
Company.
The exercise of Warrants by Holders of beneficial interest in Global
Warrants shall be effected in accordance with this Agreement and the procedures
of the Depositary therefor. If Notes are
15
surrendered in payment of the Exercise Price, the Warrant Agent shall deliver
such Notes to the Company and the Company shall deliver such Notes to the
Trustee for cancellation and, upon written notification from the Trustee to the
Company that such Notes were in good form, the Company shall notify the Warrant
Agent in writing that the Company has received full and proper payment of the
Exercise Price. Upon surrender of any Notes in payment of the Exercise Price and
cancellation of such Notes, the Trustee or the Depositary (as defined in the
Indenture) at the direction of the Trustee, as applicable, shall issue a new
Note with a principal amount at maturity adjusted to reflect the reduction for
payment of the Exercise Price, in accordance with Article 2 of the Indenture.
Subject to the provisions of Section 9 hereof, upon surrender of
Warrants and payment of the Exercise Price as provided above, the Warrant Agent
shall thereupon promptly notify the Company, and the Company shall promptly
transfer to the Holder of such Warrant Certificate a certificate or certificates
for the appropriate number of Warrant Shares or other securities or property
(including any money) to which the Holder is entitled, registered or otherwise
placed in, or payable to the order of, such name or names as may be directed in
writing by the Holder, and shall deliver such certificate or certificates
representing the Warrant Shares and any other securities or property (including
any money) to the person or persons entitled to receive the same, together with
an amount in cash in lieu of any fraction of a share as provided in Section 14.
Any such certificate or certificates representing the Warrant Shares shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a Holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.
The Warrants shall be exercisable commencing on the Exercise Date, at
the election of the Holders thereof, either in full or from time to time in
part. If less than all the Warrants represented by a Definitive Warrant are
exercised, such Definitive Warrant shall be surrendered and a new Definitive
Warrant of the same tenor and for the number of Warrants which were not
exercised shall be executed by the Company and delivered to the Warrant Agent
and the Warrant Agent shall countersign the new Definitive Warrant, registered
in such name or names as may be directed in writing by the holder, and shall
deliver the new Definitive Warrant to the Person or Persons entitled to receive
the same. The Warrant Agent shall make such notations on Schedule A to each
Global Warrant as are required to reflect any change in the number of Warrants
represented by such Global Warrant resulting from any exercise in accordance
with the terms hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall
be canceled by the Warrant Agent. The Warrant Agent shall account promptly to
the Company with respect to Warrants exercised and concurrently pay to the
Company all monies received by the Warrant Agent for the purchase of the Warrant
Shares through the exercise of such Warrants. The Warrant Agent shall keep
copies of this Agreement and any notices given or received hereunder by or from
the Company available for inspection by the Holders during normal business hours
at its office. The Company shall supply the Warrant Agent from time to time
with such numbers of copies of this Agreement as the Warrant Agent may
reasonably request.
All certificates representing Warrant Shares issued in a transaction
exempt from registration under the Securities Act shall bear the following
legend (provided that if no legend is required none shall be placed on the
Warrant Shares):
THIS SECURITY MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.
16
SECTION 7. Payment of Taxes. The Company will pay all documentary
----------------
stamp taxes attributable (a) to the initial issuance of Warrant Shares upon the
exercise of Warrants or (b) to any separation of the Warrants and Notes;
provided that, in each case, the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue of
any Warrant Certificates or any certificates for Warrant Shares in a name other
than that of the Holder of a Warrant Certificate surrendered upon the exercise
of a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 8. Mutilated or Missing Warrant Certificates. In case any of
-----------------------------------------
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
reasonably satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 9. Reservation of Warrant Shares.
-----------------------------
(a) The Company will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its authorized and issued Common Stock held in its treasury, for
the purpose of enabling it to satisfy any obligation to issue Warrant Shares
upon exercise of Warrants, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Warrants.
(b) The Company or, if appointed by the Company, the transfer agent
for the Common Stock (the "TRANSFER AGENT") and every subsequent transfer agent
for any shares of the Company's capital stock issuable upon the exercise of any
of the rights of purchase aforesaid will be irrevocably authorized and directed
at all times to reserve such number of authorized shares as shall be required
for such purpose. The Company shall keep a copy of this Agreement on file with
the Transfer Agent and with every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon the exercise thereof in accordance
with the terms of this Agreement. The Company shall supply such Transfer Agent
with duly executed certificates for such purposes and shall provide or otherwise
make available any cash which may be payable. The Company shall furnish such
Transfer Agent a copy of all notices of adjustments and certificates related
thereto, transmitted to each Holder of the Warrants pursuant to Section 15
hereof.
(c) Before taking any action which would cause an adjustment pursuant
to Sections 11 or 13 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take any corporate action
which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
(d) The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants in accordance with the terms of this Agreement
(including the terms of the Exercise
17
Price) will, upon issue, be duly and validly issued, fully paid and
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issue thereof.
SECTION 10. [Intentionally Omitted]
SECTION 11. Adjustment of Exercise Price and Number of Warrant
--------------------------------------------------
Shares. The Exercise Price and the number of Warrant Shares issuable upon the
------
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 11.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of its
capital stock; then the Exercise Price in effect immediately prior to such
action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of shares of
capital stock of the Company which such holder would have owned immediately
following such action if such Warrant had been exercised immediately prior to
such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60 days
after the record date mentioned below to purchase shares of Common Stock at a
price per share less than the Fair Market Value per share on that record date,
the Exercise Price shall be adjusted in accordance with the formula:
N x P
-----
O +
M
E = Ex ---------
O + N
where:
18
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the Fair Market Value per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock any of
its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company, the Exercise Price shall
be adjusted in accordance with the formula:
M - F
E' = Ex -----
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Market Value per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants to be distributed in respect of
one share of Common Stock as determined in good faith by the
Board of Directors of the Company (the "BOARD OF DIRECTORS").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section 11(c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this subsection does not apply to rights, options
or warrants referred to in Section 11(b) hereof.
19
(d) Adjustment for Common Stock Issue.
---------------------------------
If the Company issues shares of Common Stock for a consideration per
share less than the Fair Market Value per share on the date the Company fixes
the offering price of such additional shares, the Exercise Price shall be
adjusted in accordance with the formula:
P
-----
O + M
E' = Ex -----
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the Fair Market Value per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the issuance
of such additional shares.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This Section 11(d) does not apply to:
(1) any of the transactions described in Sections 11(b) and (c)
hereof,
(2) the exercise of Warrants, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock,
(3) Common Stock issued to the Company's employees under bona fide
employee benefit plans adopted by the Board of Directors and approved by the
holders of Common Stock when required by law, if such Common Stock would
otherwise be covered by this Section 11(d),
(4) Common Stock upon the exercise of rights or warrants issued to
the holders of Common Stock,
(5) Common Stock issued to shareholders of any person which merges
into the Company in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
20
(6) the issuance of shares of Common Stock pursuant to rights,
options or warrants which were originally issued in a Non-Affiliate Sale (as
defined below) together with one or more other securities as part of a unit at a
price per unit,
(7) Common Stock issued in a bona fide public offering pursuant to a
firm commitment underwriting, or
(8) Common Stock issued in a bona fide private placement through a
placement agent which is a member firm of the National Association of Securities
Dealers, Inc. (except to the extent that any discount from the current market
price attributable to restrictions on transferability of the Common Stock, as
determined in good faith by the Board of Directors and described in a Board
resolution which shall be filed with the Trustee, shall exceed 20%).
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or exchangeable
for Common Stock (other than securities issued in transactions described in
Sections 11(b) and (c) hereof) for a consideration per share of Common Stock
initially deliverable upon conversion or exchange of such securities less than
the Fair Market Value per share on the date of issuance of such securities, the
Exercise Price shall be adjusted in accordance with this formula:
P
-----
O + M
E' = Ex -----
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Market Value per share on the date of issuance of such
securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities have not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
21
This Section 11(e) does not apply to:
(1) convertible securities issued to shareholders of any person which
merges into the Company, or with a subsidiary of the Company, in proportion to
their stock holdings of such person immediately prior to such merger, upon such
merger,
(2) convertible securities issued in a bona fide public offering
pursuant to a firm commitment underwriting, or
(3) convertible securities issued in a bona fide private placement
through a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. (except to the extent that any discount from the
current market price attributable to restrictions on transferability of Common
Stock issuable upon conversion, as determined in good faith by the Board of
Directors and described in a Board resolution which shall be filed with the
Trustee, shall exceed 20% of the then current market price).
(f) Consideration Received.
For purposes of any computation respecting consideration received
pursuant to Sections 11 (d) and (e) hereof, the following shall apply:
(1) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided that in no case
shall any deduction be made for any commissions, discounts or other expenses
incurred by the Company for any underwriting of the issue or otherwise in
connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in good
faith by the Board of Directors (irrespective of the accounting treatment
thereof), whose determination shall be conclusive, and described in a Board
resolution which shall be filed with the Warrant Agent;
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor shall be
deemed to be the consideration received by the Company for the issuance of such
securities, plus the additional consideration, if any, to be received by the
Company upon the conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (1) and (2) of this
subsection); and
(4) in the case of the issuance of shares of Common Stock pursuant to
rights, options or warrants which rights, options or warrants were originally
issued together with one or more other securities as part of a unit, the
consideration shall be deemed to be (i) the fair value of such rights, options
or warrants at the time of issuance thereof as determined in good faith by the
Board of Directors whose determination shall be conclusive and described in a
Board resolution which shall be filed with the Warrant Agent, plus (ii) the
additional consideration, if any, to be received by the Company upon the
exercise, conversion or exchange thereof (as determined in the same manner as
provided in clause (1) and (2) of this subsection).
(g) Fair Market Value. In Sections 11(d) and (e) hereof, the "FAIR
MARKET VALUE" per security at any date of determination shall be (1) in
connection with a sale by the Company to a party that is not an Affiliate of the
Company in an arm's-length transaction (a "NON-AFFILIATE SALE"), the price
22
per security at which such security is sold and (2) in connection with any sale
by the Company to an Affiliate of the Company, (a) the last price per security
at which such security was sold in a Non-Affiliate Sale within the three-month
period preceding such date of determination or (b) if clause (a) is not
applicable, the fair market value of such security determined in good faith by
(i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded. Notwithstanding the
foregoing, any sale to ▇▇▇▇▇▇▇▇▇ & Company, Inc. (or any successor thereto)
pursuant to an underwritten public offering registered under the Securities Act
shall be deemed to be and treated as a Non-Affiliate Sale.
In Sections 11(b) and (c) hereof, the "FAIR MARKET VALUE" per security
at any date of determination shall be (a) the last price per security at which
such security was sold by the Company in a Non-Affiliate Sale within the three-
month period preceding such date of determination or (b) if clause (a) is not
applicable, the fair market value of such security determined in good faith by
(i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to in Sections
11(a), (b), (c), (d) or (e) hereof, if Warrant holders are to participate in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction.
No adjustment need be made for (i) rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest or (ii) a
change in the par value or no par value of the Common Stock.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(j) Notice of Adjustment.
23
Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 15 hereof.
(k) Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided that in no event may the
Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period in which it will be
in effect.
A reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of Sections 11 (a), (b), (c),
(d) and (e) hereof.
(l) Notice of Certain Transactions.
If (i) the Company takes any action that would require an adjustment
in the Exercise Price pursuant to Sections 11(a), (b), (c), (d) or (e) hereof
and if the Company does not arrange for Holders to participate pursuant to
Section 11(i) hereof, (ii) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to Section 11(m) hereof, or (iii) there
is a liquidation or dissolution of the Company, then the Company shall mail to
Holders a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
(m) Reorganization of the Company.
If the Company consolidates or merges with or into, or transfers or
leases all or substantially all its assets to, any person, upon consummation of
such transaction the Warrants shall automatically become exercisable for the
kind and amount of securities, cash or other assets which the Holder would have
owned immediately after the consolidation, merger, transfer or lease if the
Holder had exercised the Warrant immediately before the effective date of the
transaction. Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the person to which such sale or conveyance shall have been
made, shall enter into a supplemental Warrant Agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 11(m). The successor
Company shall mail to Holders a notice describing the supplemental Warrant
Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this Section 11(m) applies, Sections 11(a), (b), (c), (d) and (e)
hereof do not apply.
(n) Company Determination Final.
24
Any determination that the Company or the Board of Directors must make
pursuant to Section 11(a), (b), (c), (d), (e), (f), (g) or (i) hereof is
conclusive.
(o) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment under
this Section 11 should be made, how it should be made or what it should be. The
Warrant Agent has no duty to determine whether any provisions of a supplemental
Warrant Agreement under Section 11(m) hereof are correct. The Warrant Agent
makes no representation as to the validity or value of any securities or assets
issued upon exercise of Warrants. The Warrant Agent shall not be responsible
for the Company's failure to comply with this Section 11.
(p) When Issuance or Payment May Be Deferred.
In any case in which this Section 11 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 14 hereof; provided that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's right
to receive such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(q) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this Section
11, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
E
---
N' = N x E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise of
a Warrant by payment of the adjusted Exercise Price.
N = the number or Warrant Shares previously issuable upon exercise
of a Warrant by payment of the Exercise Price prior to
adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
SECTION 12. Statement on Warrants. Irrespective of any adjustment in
the number or kind of shares issuable upon the exercise of the Warrants,
Warrants theretofore or thereafter issued may continue to express the same price
and number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
25
SECTION 13. No Dilution or Impairment; Capital and Ownership
------------------------------------------------
Structure. If any event shall occur as to which the provisions of Section 11 are
---------
not strictly applicable but the failure to make any adjustment would adversely
affect the purchase rights represented by the Warrants in accordance with the
essential intent and principles of such Section, then, in each such case, the
Company shall appoint an investment banking firm of recognized national standing
that does not have a direct or material indirect financial interest in the
Company or any of its subsidiaries, who has not been, and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of its directors, officers, employees, affiliates or stockholders are) a
promoter, director or officer of the Company or any of its subsidiaries, which
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in Section 11, necessary to
preserve, without dilution, the purchase rights represented by the Warrants.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the holders of the Warrants and shall make the adjustments described therein.
The Company will not, by amendment of its certificate of incorporation
or through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of the Warrants,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holder of the Warrants against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (a)
will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock on the exercise of the Warrants from time to time outstanding and
(b) will not take any action which results in any adjustment of the Exercise
Price if the total number of Warrant Shares issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock then authorized by the Company's certificate of incorporation and
available for the purposes of issue upon such exercise. A consolidation,
merger, reorganization or transfer of assets involving the Company covered by
Section 11(m) shall not be prohibited by or require any adjustment under this
Section 13.
SECTION 14. Fractional Interest. The Company shall not be required to
-------------------
issue fractional shares of Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon such exercise shall be computed on the basis of the aggregate number of
shares of Common Stock acquirable on exercise of the Warrants so presented. If
any fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall direct the Transfer Agent to pay an amount in cash
calculated by it to equal the then current market price per share multiplied by
such fraction computed to the nearest whole cent less such fraction of the
Exercise Price. The Holders, by their acceptance of the Warrant Certificates,
expressly waive any and all rights to receive any fraction of a share of Common
Stock or a stock certificate representing a fraction of a share of Common Stock.
SECTION 15. Notices to Warrant Holders. Upon any adjustment of the
--------------------------
Exercise Price pursuant to Sections 11 or 13, the Company shall promptly
thereafter (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of nationally recognized standing selected by
the Board of Directors of the Company (who may be the regular auditors of the
Company) setting forth the Exercise Price after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered Holders of
26
the Warrant Certificates (or the DTC participants with interests in the Global
Warrant) at his address appearing on the Warrant register written notice of such
adjustments by first-class mail, postage prepaid. The Warrant Agent shall be
entitled to rely on the above-referenced accountant's certificate and shall be
under no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time to any Holder desiring an inspection thereof
during reasonable business hours. The Warrant Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any facts
exist that may require any adjustment of the number of shares of Common Stock or
other stock or property issuable on exercise of the Warrants or the Exercise
Price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed in making such adjustment or the validity
or value (or the kind or amount) of any shares of Common Stock or other stock or
property which may be issuable on exercise of the Warrants. The Warrant Agent
shall not be responsible for any failure of the Company to make any cash payment
or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other common stock or property upon the exercise of any Warrant.
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other
than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock
or distributions referred to in Section 13 hereof); or
(c) of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or a tender offer
or exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) a Change of Control occurs; or
(f) the Company proposes to take any other action that would require
an adjustment of the Exercise Price or the number of Warrant Shares
pursuant to Section 13;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered Holders of the Warrant Certificates at
such Holder's address appearing on the Warrant register, at least 20 days (or 10
days in any case specified in clauses (a) or (b) above) prior to the applicable
record date hereinafter specified, or promptly in the case of events for which
there is no record date, by first class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of record of shares of Common Stock
to be entitled to receive any such rights, options, warrants or distribution are
to be determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (iii) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up or Change of Control is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of
27
Common Stock shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up or Change of
Control. The failure to give the notice required by this Section 16 or any
defect therein shall not affect the legality or validity of any distribution,
right, option, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or Change of Control or the vote upon
any action. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 16. Merger, Consolidation or Change of Name of Warrant Agent.
--------------------------------------------------------
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the business of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor warrant agent under the provisions of
Section 17. Any such successor Warrant Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by first class mail, postage prepaid)
to each Holder at such Holder's last address as shown on the register maintained
by the Warrant Agent pursuant this Agreement. In case at the time such successor
to the Warrant Agent shall succeed to the agency created by this Agreement, and
in case at that time any of the Warrant Certificates shall have been
countersigned but not delivered, any such successor to the Warrant Agent may
adopt the countersignature of the original Warrant Agent; and in case at that
time any of the Warrant Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrant Certificates either
in the name of the predecessor Warrant Agent or in the name of the successor to
the Warrant Agent; and in all such cases such Warrant Certificates shall have
the full force and effect provided in the Warrant Certificates and in this
Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 17. Warrant Agent. The Warrant Agent undertakes the duties
-------------
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company and the Warrant Agent assumes
no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrant Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or
in the Warrant Certificates to be complied with by the Company.
28
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
Holder of any Warrant Certificate in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the opinion
or the advice of such counsel.
(d) Before the Warrant Agent acts or refrains from acting, it may
require an officer's certificate or an opinion of counsel, or both. The
Warrant Agent shall incur no liability or responsibility to the Company or
to any Holder of any Warrant Certificate for any action taken in reliance
on any Warrant Certificate, certificate of shares, notice, resolution,
waiver, consent, order, certificate, or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature reasonably incurred by the Warrant Agent in the execution of this
Agreement and to indemnify the Warrant Agent and save it harmless against
any and all liabilities, including judgments, reasonable costs and counsel
fees, for anything done or omitted by the Warrant Agent in the execution of
this Agreement or arising out of or in connection with its performance of
its obligations or duties under this Agreement, except to the extent such
liabilities are attributable to its gross negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Holders of Warrant
Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such
action as it may consider proper, whether with or without any such security
or indemnity. All rights of action under this Agreement or under any of
the Warrants may be enforced by the Warrant Agent without the possession of
any of the Warrant Certificates or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant
Agent and any recovery of judgment shall be for the ratable benefit of the
Holders of the Warrants, as their respective rights or interests may
appear.
(g) The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Warrant Agent under this Agreement. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Company or for
any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do
or refrain from doing in connection with this Agreement except for its own
gross negligence or bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant
Shares or other securities or property deliverable as provided in
29
this Agreement, or to determine whether any facts exist which may require
any of such adjustments, or with respect to the nature or extent of any
such adjustments, when made, or with respect to the method employed in
making the same. The Warrant Agent shall not be accountable with respect to
the validity or value or the kind or amount of any Warrant Shares or of any
securities or property which may at any time be issued or delivered upon
the exercise of any Warrant or with respect to whether any such Warrant
Shares or other securities will when issued be validly issued and fully
paid and nonassessable, and makes no representation with respect thereto.
SECTION 18. Resignation and Removal of Warrant Agent; Appointment of
--------------------------------------------------------
Successor. No resignation or removal of the Warrant Agent and no appointment of
---------
a successor warrant agent shall become effective until the acceptance of
appointment by the successor warrant agent as provided herein. The Warrant Agent
may resign its duties and be discharged from all further duties and liability
hereunder (except liability arising as a result of the Warrant Agent's own
negligence or willful misconduct) after giving written notice to the Company.
The Company may remove the Warrant Agent upon written notice, and the Warrant
Agent shall thereupon in like manner be discharged from all further duties and
liabilities hereunder, except as aforesaid. The Warrant Agent shall, at the
Company's expense, cause to be mailed (by first class mail, postage prepaid) to
each Holder of a Warrant at his last address as shown on the register of the
Company maintained by the Warrant Agent a copy of said notice of resignation or
notice of removal, as the case may be. Upon such resignation or removal, the
Company shall appoint in writing a new warrant agent. If the Company shall fail
to make such appointment within a period of 30 days after it has been notified
in writing of such resignation by the resigning Warrant Agent or after such
removal, then the resigning Warrant Agent or the Holder of any Warrant may apply
to any court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by such a
court, shall be a corporation doing business under the laws of the United States
or any state thereof, in good standing and having a combined capital and surplus
of not less than $50,000,000. The combined capital and surplus of any such new
warrant agent shall be deemed to be the combined capital and surplus as set
forth in the most recent annual report of its condition published by such
warrant agent prior to its appointment, provided that such reports are published
at least annually pursuant to law or to the requirements of a federal or state
supervising or examining authority. After acceptance in writing of such
appointment by the new warrant agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance, conveyance, act or deed; but
if for any reason it shall be necessary or expedient to execute and deliver any
further assurance, conveyance, act or deed, the same shall be done at the
expense of the Company and shall be legally and validly executed and delivered
by the resigning or removed Warrant Agent. Not later than the effective date of
any such appointment, the Company shall give notice thereof to the resigning or
removed Warrant Agent. Failure to give any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation of the Warrant Agent or the appointment of a new warrant agent, as
the case may be.
SECTION 19. Registration. The Company and the Warrant Agent
------------
acknowledge that Holders shall have the registration rights set forth in the
Warrant Registration Rights Agreement, a copy of which is attached hereto as
Exhibit C.
SECTION 20. Reports. So long as any of the Warrants remain
-------
outstanding, and to the extent the Company is required to send such documents to
the holders of its outstanding Common Stock, whether or not required by the
rules and regulations of the Securities and Exchange Commission (the
"Commission"), the Company shall furnish to the registered Holders of the
Warrants (and to the beneficial Holders, upon request) (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms l0-Q and 10-K if the Company were required
30
to file such Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants; and (ii) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were required to file such
reports.
SECTION 21. Rule 144A and Rule 144. The Company hereby agrees with
----------------------
each Holder, for so long as any Registrable Securities remain outstanding, and
during any period in which the Company (i) is not subject to Section 13 or 15(d)
of the Exchange Act, to make available, upon request of any Holder of
Registrable Securities, to such Holder or beneficial owner of Registrable
Securities, the information required by Rule 144A(d)(4) under the Securities Act
in order to permit resales of such Registrable Securities pursuant to Rule 144A,
and (ii) is subject to Section 13 or 15(d) of the Exchange Act, to make all
filings required thereby in a timely manner in order to permit resales of such
Registrable Securities pursuant to Rule 144.
SECTION 22. Notices to Company and Warrant Agent. Any notice or
------------------------------------
demand authorized by this Agreement to be given or made by the Warrant Agent or
by the Holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by
the Holder(s) of any Warrant Certificate to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company) to the Warrant Agent as follows:
The Bank of New York
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ ]
Attention: Corporate Trust Trustee Administration
SECTION 23. Supplements and Amendments. The Company and the Warrant
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any Holders of Warrant Certificates in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not in any
way materially adversely affect the interests of any Holder of Warrant
Certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of Holders shall require the written consent of
Holders representing a majority of the then outstanding Warrants (excluding
Warrants held by the Company or
31
any of its Affiliates). The consent of each Holder of a Warrant affected shall
be required for any amendment pursuant to which the Exercise Price would be
increased or the number of Warrant Shares purchasable upon exercise of Warrants
would be decreased (other than pursuant to adjustments provided by this
Agreement). The Warrant Agent shall be entitled to receive and, subject to
Section 17, shall be fully protected in relying upon, an officers' certificate
and opinion of counsel as conclusive evidence that any such amendment or
supplement is authorized or permitted hereunder, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms.
SECTION 24. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 25. Governing Law. THIS AGREEMENT AND EACH WARRANT
-------------
CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PRINCIPLES.
SECTION 26. Benefits of This Agreement. (a) Nothing in this
--------------------------
Agreement shall be construed to give to any person or corporation other
than the Company, the Warrant Agent and the Holders of the Warrant
Certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Warrant Agent and the Holders of the Warrant
Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of
the Company, including, without limitation, the right to receive dividends
or subscription rights, the right to vote, to consent, to exercise any
preemptive right, to receive any notice of meetings of stockholders for the
election of directors of the Company or any other matter or to receive any
notice of any proceedings of the Company, except as may be specifically
provided for herein. The Holders of the Warrants are not entitled to share
in the assets of the Company in the event of the liquidation, dissolution
or winding up of the Company's affairs.
(c) All rights of action in respect of this Agreement are vested in
the Holders of the Warrants, and any Holder of any Warrant, without the
consent of the Warrant Agent or the Holder of any other Warrant, may, on
such Holder's own behalf and for such Holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Company suitable to enforce, or otherwise in respect of, such Holder's
rights hereunder, including the right to exercise, exchange or surrender
for purchase such Holder's Warrants in the manner provided in this
Agreement.
SECTION 27. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
[Signature Page Follows]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
▇▇▇. ▇▇▇▇▇▇' HOLDING COMPANY, INC.
By: ______________________________
Name:
Title:
THE BANK OF NEW YORK
By: ______________________________
Name:
Title:
33
EXHIBIT A
[Form of Warrant Certificate]
[Face]
Unit Legend. Each Warrant issued prior to the Separation Date shall
bear the following legend (the "UNIT LEGEND") on the face thereof:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSIST OF $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THE 14% SENIOR SECURED NOTES DUE 2005 OF THE COMPANY (THE
"NOTES") AND ONE WARRANT (THE "WARRANT") INITIALLY ENTITLING THE HOLDER THEREOF
TO PURCHASE 3.14411 SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE, OF THE
COMPANY. PRIOR TO THE EARLIEST TO OCCUR OF (i) 180 DAYS FOLLOWING THE ISSUANCE
OF THE WARRANTS, (ii) THE DATE OF REDEMPTION OF THE NOTES, (iii) THE DATE ON
WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (iv) SUCH DATE AS ▇▇▇▇▇▇▇▇▇ & COMPANY, INC., IN ITS
SOLE DISCRETION SHALL DETERMINE, (v) IN THE EVENT OF A CHANGE OF CONTROL (AS
DEFINED IN THE INDENTURE RELATING TO THE NOTES) OCCURS, THE DATE THE COMPANY
MAILS THE REQUIRED NOTICE THEREOF TO HOLDERS AND (vii) UPON AN IPO (AS DEFINED
IN THE WARRANT AGREEMENT PURSUANT TO WHICH THE WARRANTS HAVE BEEN ISSUED) OF THE
COMPANY'S COMMON STOCK. THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED
ONLY TOGETHER WITH, THE NOTES.
No. _______ ____ Warrants
CUSIP No. ________
Warrant Certificate
▇▇▇. ▇▇▇▇▇▇' HOLDING COMPANY, INC.
This Warrant Certificate certifies that Cede & Co., or its registered
assigns, is the registered holder of Warrants (the "WARRANTS") to purchase
Common Stock, par value $.001 (the "COMMON STOCK"), of ▇▇▇. ▇▇▇▇▇▇' Holding
Company, Inc., a Delaware corporation (the "COMPANY"). Each Warrant entitles
the registered holder upon exercise at any time from 9:00 a.m. on the Separation
Date referred to below (the "EXERCISE DATE") to receive from the Company 3.14411
fully paid and nonassessable shares of Common Stock (the "WARRANT SHARES") at
the initial exercise price (the "EXERCISE PRICE") of $.001 per share payable
upon surrender of this Warrant Certificate and payment of the Exercise Price at
the office or agency of the Warrant Agent, but only subject to the conditions
set forth herein and in the Warrant Agreement referred to on the reverse hereof.
The Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
A-1
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the internal laws of the State of New York.
A-2
IN WITNESS WHEREOF, ▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc.. has caused this
Warrant Certificate to be signed.
▇▇▇. ▇▇▇▇▇▇' HOLDING COMPANY, INC.
By: ____________________________________
Name:
Title:
Dated: August 24, 1998
Countersigned:
The Bank of New York,
as Warrant Agent
By:_______________________
Authorized Signature
[Form of Warrant]
[Reverse]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT
HAS ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A) (1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES
ACT) (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904
OF THE SECURITIES ACT WHERE THE PURCHASER, PRIOR TO SUCH
TRANSACTION, FURNISHES THE WARRANT AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED
FROM THE WARRANT AGENT) AND, IF SUCH TRANSFER IS IN RESPECT OF A
FAIR MARKET VALUE OF SECURITIES LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN
IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN
BE OBTAINED FROM THE WARRANT AGENT) AND, IF SUCH TRANSFER IS IN
RESPECT OF A FAIR MARKET VALUE OF SECURITIES LESS THAN $250,000,
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES
A-3
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY
IN VIOLATION OF THE FOREGOING.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants entitling the holder on exercise to receive shares
of Common Stock, par value $.001, of the Company (the "COMMON STOCK"), and are
issued or to be issued pursuant to a Warrant Agreement dated as of August 24,
1998 (the "WARRANT AGREEMENT"), duly executed and delivered by the Company to
The Bank of New York, as warrant agent (the "WARRANT AGENT"), which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Warrant Agreement.
Warrants may be exercised at any time from 9:00 a.m. on or after the
Separation Date. The holder of Warrants evidenced by this Warrant Certificate
may exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price at the office of the Warrant Agent, all in
accordance with the Warrant Agreement. In the event that upon any exercise of
Warrants evidenced hereby the number of Warrants exercised shall be less than
the total number of Warrants evidenced hereby, there shall be issued to the
holder hereof or his assignee a new Warrant Certificate evidencing the number of
Warrants not exercised. No adjustment shall be made for any dividends on any
Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof and/or the number of
shares of Common Stock issuable upon the exercise of each Warrant shall, subject
to certain conditions, be adjusted. No fractions of a share of Common Stock will
be issued upon the exercise of any Warrant, but the Company will pay the cash
value thereof determined as provided in the Warrant Agreement.
The Warrant Agreement, together with the Warrant Registration Rights
Agreement referred to therein, provides that the Company shall be bound by
certain registration obligations with respect to the Common Stock issuable upon
exercise of the Warrants.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but
A-4
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-5
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _______ shares of Common
Stock and herewith tenders payment for such shares to the order of ▇▇▇. ▇▇▇▇▇▇'
HOLDING COMPANY, INC., in the amount of $__________ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _______________, whose address is __________________
and that such shares be delivered to ___________, whose address is
____________________________. If said number of shares is less than all of the
shares of Common Stock purchasable hereunder, the undersigned requests that a
new Warrant Certificate representing the remaining balance of such shares be
registered in the name of ______________________, whose address is
____________________, and that such Warrant Certificate be delivered to whose
address is ____________________.
___________________________________
Signature
Date:
___________________________________
Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-6
SCHEDULE OF EXCHANGES OF GLOBAL WARRANTS
----------------------------------------
The following exchanges of a part of this Global Warrant have been made:
Number of Warrants
Amount of decrease Amount of increase in this Global
in Number of in Number of Warrant following Signature of
warrants in this Warrants in this such decrease or authorized signatory
Date of Exchange Global Warrant Global Warrant increase of Warrant Agent
-----------------------------------------------------------------------------------------------------------
A-7
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
WARRANTS
Re: _____________ Warrants to Purchase Common Stock (the "WARRANTS") of ▇▇▇.
▇▇▇▇▇▇' HOLDING COMPANY, INC.
This Certificate relates to ______ Warrants held in *__________ book-
entry or * _____________ definitive form by __________ (the "TRANSFEROR").
The Transferor*:
[_] has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrants held by the
depositary a Warrant or Warrants in definitive, registered form equal to its
beneficial interest in such Global Warrant (or the portion thereof indicated
above); or
[_] has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor does hereby certify that the Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and that the transfer
of this Warrant does not require registration under the Securities Act of 1933,
as amended (the "SECURITIES ACT") because:
[_] Such Warrant is being acquired for the Transferor's own account
without transfer (in satisfaction of Section 7 of the Warrant Agreement).
[_] Such Warrant is being transferred (i) to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A.
[_] Such Warrant is being transferred (i) in accordance with Rule 144
under the Securities Act (and based on an opinion of counsel if the Company so
requests) or (ii) pursuant to an effective registration statement under the
Securities Act and the Transferor is named as a selling security holder in the
prospectus that forms a part of such registration statement or a supplement
thereto and the Transferor has complied with prospectus delivery requirement if
required to do so.
[_] Such Warrant is being transferred to an institutional accredited
investor within the meaning of Rule 50l(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption from the registration
requirements of the Securities Act (together with a certification).
__________
* Check applicable box.
[_] Such Warrant is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based on an opinion of counsel if the Company so requests).
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Date:
EXHIBIT D
ACCREDITED INVESTOR LETTER
EXHIBIT E
FORM OF LETTER OF REPRESENTATIONS TO BE DELIVERED BY PURCHASERS OF WARRANTS
PURSUANT TO REGULATION S
EXHIBIT C
FORM OF WARRANT REGISTRATION RIGHTS AGREEMENT
C-1
