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WARRANT AGREEMENT
Dated as of October ___, 1998
by and between
NTL INCORPORATED
and
THE CHASE MANHATTAN BANK
as Warrant Agent
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WARRANT AGREEMENT
TABLE OF CONTENTS(1)
Page
SECTION 1. Appointment of Warrant Agent.................................................. 2
SECTION 2. Issuance of Warrants.......................................................... 2
SECTION 3. Warrant Certificates.......................................................... 2
SECTION 4. Execution of Warrant Certificates............................................. 2
SECTION 5. Registration and Countersignature............................................. 3
SECTION 6. Registration of Transfers and Exchanges....................................... 3
SECTION 7. Terms of Warrants; Exercise of Warrants....................................... 4
SECTION 8. Reports....................................................................... 6
SECTION 9. Payment of Taxes.............................................................. 7
SECTION 10. Mutilated or Missing Warrant Certificates..................................... 7
SECTION 11. Reservation of Warrant Shares................................................. 7
SECTION 12. Obtaining Stock Exchange Listings............................................. 8
SECTION 13. Adjustment of Exercise Price and Number of Warrant Shares
Issuable...................................................................... 8
(a) Adjustment for Change in Capital Stock................................. 8
(b) Adjustment for Rights Issue............................................ 9
(c) Adjustment for Other Distributions..................................... 10
(d) Adjustment for Common Stock Issue...................................... 11
(e) Adjustment for Convertible Securities Issue............................ 13
(f) Current Market Price................................................... 16
(g) Consideration Received................................................. 16
(h) When De Minimis Adjustment May Be Deferred............................. 17
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(1) This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or
provisions.
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Page
(i) When No Adjustment Required............................................ 17
(j) Notice of Adjustment................................................... 17
(k) Voluntary Reduction.................................................... 17
(l) Reorganization of the Company.......................................... 18
(m) The Company Determination Final........................................ 19
(n) Warrant Agent's Disclaimer............................................. 19
(o) When Issuance or Payment May Be Deferred............................... 19
(p) Adjustment in Number of Shares......................................... 19
(q) Form of Warrants....................................................... 20
SECTION 14. No Dilution or Impairment..................................................... 20
SECTION 15. Fractional Interests.......................................................... 21
SECTION 16. Notices to Warrant Holders.................................................... 21
SECTION 17. Merger, Consolidation or Change of Name of Warrant Agent...................... 23
SECTION 18. Warrant Agent................................................................. 23
SECTION 19. Registration Statement........................................................ 26
(a) Shelf Registration of Warrant Shares................................... 26
(b) Registration Expenses.................................................. 26
SECTION 20. Change of Warrant Agent....................................................... 26
SECTION 21. Notices to the Company and Warrant Agent...................................... 27
SECTION 22. Supplements and Amendments.................................................... 28
SECTION 23. Successors.................................................................... 28
SECTION 25. Governing Law; Jurisdiction................................................... 28
SECTION 26. Benefits of This Agreement.................................................... 29
SECTION 27. Counterparts.................................................................. 29
SECTION 28. Further Assurances............................................................ 29
EXHIBIT A
Form of Initial Warrant Certificate............................................................... A-1
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WARRANT AGREEMENT dated as of October __, 1998, between NTL
INCORPORATED, a Delaware corporation (the "Company"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, as Warrant Agent (the "Warrant Agent").
WHEREAS, pursuant to the terms and conditions of (i) a Consent
Solicitation Statement of the Company dated September 17, 1998 (the "12 3/4%
Notes Consent Solicitation") relating to its 12 3/4% Series A Senior Deferred
Coupon Notes Due 2005 (the "12 3/4% Notes"), (ii) a Consent Solicitation of the
Company dated September 17, 1998 (the "11 1/2% Notes Consent Solicitation")
relating to the 11 1/2% Series B Senior Deferred Coupon Notes Due 2006 (the "11
1/2% Notes") and (iii) a Consent Solicitation Statement of the Company dated
September 17, 1998 (the "10% Notes Consent Solicitation", and together with the
12 3/4% Notes Consent Solicitation and the 11 1/2% Notes Consent Solicitation,
the "Consent Solicitation") relating to its 10% Series B Senior Notes Due 2007
(the "10% Notes", and together with the 12 3/4% Notes and the 11 1/2% Notes, the
"Notes"), the registered holders of the Notes were given the right to elect to
apply the consent payments payable by the Company pursuant to the Consent
Solicitation to purchase the Warrants hereinafter described (the "Warrants"), to
purchase shares of Common Stock, par value $.01 per share (the "Common Stock"),
of the Company (the Common Stock issuable upon exercise of the Warrants being
referred to herein as the "Warrant Shares"); and
WHEREAS, each Warrant entitles the holder of the Warrant, upon
exercise to receive from the Company, as adjusted as provided herein, one fully
paid and nonassessable share of Common Stock of the Company at the Exercise
Price (as defined herein) and accordingly, a maximum of 863,902 Warrants are
being offered pursuant to, and upon the terms and conditions set forth in, the
prospectus (the "Prospectus") of the Company which forms part of a registration
statement on Form S-3 dated September 18, 1998 (SEC No. 333-63015), filed by the
Company with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act") (such registration statement, as
amended, being referred to herein as the "Registration Statement"); and
WHEREAS, the Warrants shall bear the legend set forth in the
form of Warrant Certificate in Exhibit A attached hereto (the "Warrant Legend")
subject to the terms of the Warrant Agreement; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance of Warrant certificates and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:
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SECTION 1. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment
SECTION 2. Issuance of Warrants. Warrants shall be originally
issued, in accordance with Section 5, to each registered holder of the Notes as
of September 8, 1998 who elected in a properly executed consent to certain
amendments of the indenture governing the 12 3/4% Notes (the "12 3/4%
Indenture"), the indenture governing the 11 1/2% Notes (the "11 1/2% Indenture")
or the indenture governing the 10% Notes (the "10% Indenture", and together with
the 12 3/4% Indenture and the 11 1/2% Indenture, the "Indentures"), prior to the
expiration date of the Consent Solicitation, to apply the cash payment payable
in respect of that consent to purchase the Warrants (each such registered
holder, an "Electing Holder"). Issuance of the Warrants is conditional on (i)
the Registration Statement being declared effective by the SEC and no stop order
suspending the effectiveness of the Registration Statement having been issued by
the SEC and (ii) the Warrant Agent receiving from each Electing Holder a
confirmation, completed and executed in a manner reasonably satisfactory to the
Company, acknowledging receipt of the Prospectus and confirming that Electing
Holder's election to apply the cash payment to purchase Warrants.
SECTION 3. Warrant Certificates. The certificates evidencing
the Warrants to be delivered pursuant to this Agreement shall be in registered
form only and shall be substantially in the form set forth in Exhibit A attached
hereto.
SECTION 4. Execution of Warrant Certificates. Warrant
certificates shall be signed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, President or Vice President and Secretary or an
Assistant Secretary under its corporate seal. Each such signature upon the
Warrant certificates may be in the form of a facsimile signature of the present
or any future Chairman of the Board, Chief Executive Officer, President or Vice
President and Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Warrant certificates and for that purpose the Company may
adopt and use the facsimile signature of any person who shall have been Chairman
of the Board, Chief Executive Officer, President or Vice President and Secretary
or Assistant Secretary, notwithstanding the fact that at the time the Warrant
certificates shall be countersigned and delivered or disposed of he or she shall
have ceased to hold such office, so long as, and the Company hereby represents
that, under the Company's charter and by-laws, any Warrants or Warrant Shares so
issued would be validly issued. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant certificates.
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In case any officer of the Company who shall have signed any
of the Warrant certificates shall cease to be such officer before the Warrant
certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; so long as, and the Company hereby represents
that, under the Company's charter and by-laws, any Warrants or Warrant Shares so
issued would be validly issued; and any Warrant certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant certificate, shall be a proper officer of the Company to sign such
Warrant certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer, so long as, and the Company
hereby represents that, under the Company's charter and by-laws, any Warrants or
Warrant Shares so issued would be validly issued.
Warrant certificates shall be dated the date of
countersignature by the Warrant Agent and shall represent one or more whole
Warrants.
SECTION 5. Registration and Countersignature. The Warrant
Agent, on behalf of the Company, shall number and register the Warrant
certificates in a register as they are issued by the Company.
Warrant certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the Board,
Chief Executive Officer, President, Vice President and Secretary or Assistant
Secretary of the Company, initially countersign and deliver Warrants entitling
the holders thereof to purchase not more, nor less, than the number of Warrant
Shares referred to above in the first recital hereof (but subject to adjustment
as hereinafter provided) and shall countersign and deliver Warrants as otherwise
provided in this Agreement.
The Company and the Warrant Agent may deem and treat the
registered 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.
SECTION 6. Registration of Transfers and Exchanges. The
Warrant Agent shall from time to time register the transfer of any outstanding
Warrant certificates upon the records to be maintained by it for that purpose,
upon surrender thereof accompanied by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly executed by the
registered holder or holders thereof or by the duly appointed legal
representative thereof or by a
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duly authorized attorney. Upon any such registration of transfer, a new Warrant
certificate shall be issued to the transferee(s) and the surrendered Warrant
certificate shall be cancelled by the Warrant Agent. Cancelled Warrant
certificates shall thereafter be disposed of by the Company in accordance with
applicable law.
Warrant certificates may be exchanged at the option of the
holder(s) thereof, when surrendered to the Warrant Agent at its office for
another Warrant certificate or other Warrant certificates of like tenor and
representing in the aggregate a like number of Warrants. Warrant certificates
surrendered for exchange shall be cancelled by the Warrant Agent. Such cancelled
Warrant certificates shall then be disposed of by the Company in accordance with
applicable law.
No service charge shall be made for any transfer or exchange
of Warrant certificates, but the Company may require payment of a sum sufficient
to cover any stamp or other governmental charge or tax that may be imposed in
connection with any such transfer or exchange.
The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 6, the new Warrant certificates
issued pursuant to the provisions of this Section 6.
SECTION 7. Terms of Warrants; Exercise of Warrants. Subject to
the terms of this Agreement, each Warrant holder shall have the right, which may
be exercised from the date of original issuance of the Warrant certificates
pursuant to the terms of this Agreement and prior to 5:00 p.m. New York city
time on the tenth anniversary thereof (the "Expiration Date"), to exercise each
Warrant and 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 (as herein defined)
then in effect for such Warrant Shares; provided, however, that no Warrant
holder shall be entitled to exercise such holder's Warrants at any time unless
at the time of exercise the Registration Statement is effective under the Act,
and no stop order suspending the effectiveness of the Registration Statement has
been issued by the SEC; and provided, further, that if the Company or a holder
of Warrants reasonably believes (as evidenced by notice to the Warrant Agent of
such belief) that the exercise of any Warrant requires prior compliance with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules and
regulations thereunder, any such exercise shall be contingent upon such prior
compliance as evidenced by notice from the Company to the Warrant Agent of such
compliance. Each Warrant, when exercised will entitle the holder thereof to
purchase one fully paid and nonassessable share of Common Stock at the Exercise
Price. Each Warrant not exercised prior to the Expiration Date shall become void
and all rights thereunder and all rights in respect thereof under this Agreement
shall cease as of such time.
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Save as expressly provided otherwise in this Agreement, no adjustments as to
dividends will be made upon exercise of the Warrants.
A Warrant may be exercised upon surrender to the Company at
the principal corporate trust office of the Warrant Agent referred to in Section
21 (the "Warrant Agent Office") of the certificate or certificates evidencing
the Warrants to be exercised with the form of election to purchase on the
reverse thereof duly filled in and signed, which signature shall be guaranteed
by an "eligible guarantor" as defined in the regulations promulgated under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and upon
payment to the Warrant Agent for the account of the Company of the exercise
price of $[______](2) (the "Exercise Price"), as adjusted as herein provided,
for each Warrant Share then exercised. Payment of the aggregate Exercise Price
shall be made (i) in United States dollars or (ii) by certified or official bank
check payable to the order of the Company. In lieu of the payment of the
Exercise Price as aforesaid, the holder of a Warrant may request the payment of
"Spread", which shall be delivered by the Company by delivering Common Stock
with an aggregate current market price (as of the date of receipt of the request
by the Company) equal to the difference between the current market price of per
share of Common Stock less the Exercise Price multiplied by the number of
Warrants being exercised.
Subject to the provisions of Section 9 hereof, upon such
surrender of Warrants and payment of the Exercise Price, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the holder and in such name or names, as the Warrant holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants together with cash as provided in
Section 15 hereof; provided, however, that if any consolidation, merger or lease
or sale of assets is proposed to be effected by the Company as described in
subsection (l) of Section 13 hereof, or a tender offer or an exchange offer for
shares of Common Stock of the Company shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence together
with cash as provided in Section 15 hereof. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such Warrant Shares
as of the date of the surrender of such Warrants and payment of the Exercise
Price. No fractional shares shall be issued upon exercise of any Warrants in
accordance with Section 15 hereof.
The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part (in whole shares)
and, in the event that a certificate evidencing Warrants is exercised in respect
of fewer than all of the Warrant Shares issuable on such exercise at any time
prior to the date of
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(2) The initial Exercise Price shall be the current market price per share
of Common Stock (determined in accordance with Section 13(f)) on the
date of original issuance of the Warrants.
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expiration of the Warrants, a new certificate evidencing the remaining Warrant
or Warrants will be issued, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant certificate or
certificates pursuant to the provisions of this Section and of Section 5 hereof,
and the Company, whenever required by the Warrant Agent, will supply the Warrant
Agent with Warrant certificates duly executed on behalf of the Company for such
purpose.
All Warrant certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent. Such cancelled Warrant certificates
shall then be disposed of by the Company in accordance with applicable law. 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, the SEC
Reports (as defined below) and any notices given or received hereunder available
for inspection by the holders of the Warrants during normal business hours at
its office. The Company shall supply the Warrant Agent from time to time with
such numbers of copies of this Agreement as the Warrant Agent may request.
SECTION 8. Reports. So long as any of the Warrants remain
outstanding, the Company shall cause copies of all quarterly and annual
financial reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act in effect on the date of this Agreement ("SEC
Reports") to be filed with the Warrant Agent and mailed to the holders of
Warrants who have previously delivered to the Company or the Warrant Agent a
written request for SEC Reports, in each case, within 15 days after filing with
the SEC. If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Company shall nevertheless continue to cause SEC
Reports, in form and substance (including footnotes) substantially the same as
those that it would be required to file pursuant to Section 13 or 15(d) of the
Exchange Act as in effect on the date of this Agreement if it were then subject
to the requirements of either such Section, to be so filed with the SEC for
public availability (unless the SEC will not accept such a filing) and with the
Warrant Agent and mailed to the holders of Warrants, in each case, within the
same time periods as would have applied (including under the preceding sentence)
had the Company then been subject to the requirements of Section 13 or 15(d) of
the Exchange Act. The Company shall make all such information available to
investors, securities analysts and broker dealers who request it in writing.
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SECTION 9. Payment of Taxes. No service charge shall be made
to any holder of a Warrant for any exercise, exchange or registration of
transfer of Warrant certificates, and the Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant certificate
surrendered upon the exercise of a Warrant, 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 10. Mutilated or Missing Warrant Certificates. If any
of the Warrant certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue and the Warrant Agent shall 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 such indemnity and security therefor
as is customary and reasonably satisfactory to them, if requested. Applicants
for such substitute Warrant shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe.
SECTION 11. Reservation of Warrant Shares. The Company will at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants.
The Company or the transfer agent for the Common Stock 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 represented by the
Warrants as aforesaid (the "Transfer Agent") will be irrevocably authorized and
directed at all times to reserve such number of authorized shares as shall be
required for such purpose. The Company will keep a copy of this Agreement on
file with the Transfer Agent for any shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from
time to time from such Transfer Agent the stock certificates required to honor
outstanding Warrants upon exercise thereof in accordance with the terms of this
Agreement.
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The Company will supply such Transfer Agent with duly executed certificates for
such purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 15 hereof. The Company will furnish such Transfer
Agent a copy of all notices of adjustments and certificates related thereto,
transmitted to each holder pursuant to Section 16 hereof.
Before taking any action which would cause an adjustment
pursuant to Section 13 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take all corporate action
necessary, in the opinion of its counsel (which may be counsel employed by the
Company), in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will be, upon payment of the Exercise Price and
issuance thereof, fully paid, nonassessable, free of preemptive rights and free
from all taxes, liens, charges and security interests with respect to the issue
thereof.
SECTION 12. Obtaining Stock Exchange Listings. The Company
shall also from time to time take all action necessary so that the Warrant
Shares, immediately upon their issuance upon the exercise of Warrants, will be
listed on the Nasdaq Stock Market National Market or such other principal
securities exchanges, interdealer quotation systems and markets within the
United States of America, if any, on which other shares of Common Stock are then
listed or quoted.
SECTION 13. Adjustment of Exercise Price and Number of Warrant
Shares Issuable. 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 13. For purposes of
this Section 13, "Common Stock" means the Common Stock and any other stock of
the Company, however designated, for which the Warrants may be exercisable.
(a) Adjustment for Change in Capital Stock.
If, after the date of this Agreement, 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;
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(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 and the number and kind of shares of capital stock of
the Company issuable upon the exercise of a Warrant shall be proportionately
adjusted so that the holder of any Warrant thereafter exercised may receive the
aggregate number and kind of shares of capital stock of the Company which he
would have owned immediately following such action if such Warrant had been
exercised immediately prior to such action.
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.
If after an adjustment a holder of a Warrant upon exercise may
receive shares of two or more classes or series of capital stock of the Company,
the Company shall determine the allocation of the adjusted Exercise Price
between the classes or series of capital stock based on the relative fair market
values (determined in good faith by the Board of Directors of the Company) of
such class or classes of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class or series of capital stock shall
thereafter again be subject to adjustment on the terms applicable to Common
Stock in this Section 13.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for Rights Issue.
If, after the date of this Agreement, the Company distributes
any options, warrants or other rights (however classified) 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 or securities
convertible into, or exchangeable or exercisable for, Common Stock at a price
per share (or with an initial conversion, exchange or exercise price) less than
the current market price per share on that record date, the Exercise Price shall
be adjusted in accordance with the following formula:
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N x P
O + -----
M
E' = E x -----------
O + N
where:
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 current market price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such
options, warrants or other rights (however classified) are issued and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive the options, warrants or other rights (however
classified). If at the end of the period during which such rights, options or
warrants are exercisable, not all options, warrants or other rights (however
classified) 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, after the date of this Agreement, the Company distributes
to all holders of its Common Stock, or securities convertible into, or
exchangeable for, Common Stock (other than, in the case of such securities,
pursuant to the stated terms of such securities) any of its assets (including
cash), debt securities, preferred stock or any options, warrants or other rights
to purchase debt securities, assets or other securities of the Company, the
Exercise Price shall be adjusted in accordance with the following formula:
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M - F
E' = E x -------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price 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 applicable to one share of
Common Stock. The Board of Directors shall determine the
fair market value.
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 subsection (c) does not apply to: (i) options, warrants
or other rights referred to in subsection (b) of this Section 13; (ii)
securities convertible into or exchangeable for shares of Common Stock referred
to in sub-section (e) of this Section 13; (iii) a dividend payable in shares of
Common Stock, or (iv) any cash dividend that, when added to all other cash
dividends paid in the 12 months prior to the declaration date of such dividend
(excluding any such other dividend included in a previous adjustment of the
Exercise Price pursuant to this sub-section (c)), does not exceed 5% of the
current market price of such Common Stock.
(d) Adjustment for Common Stock Issue.
If, after the date of this Agreement, the Company issues
shares of Common Stock for a consideration per share less than the current
market price per share of Common Stock 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' = E x -----------
A
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E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the current market price per share of Common Stock on the
date of issuance of such additional shares.
A = the number of shares of Common Stock 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 subsection (d) does not apply to:
(1) any of the transactions described in subsections
(a), (b) and (c) of this Section 13,
(2) the exercise of Warrants or other warrants
outstanding on the date of this Agreement, or the conversion or
exchange of other securities outstanding on the date of this Agreement
which are convertible into or exchangeable for Common Stock,
(3) Common Stock issued to the Company's employees,
consultants or directors under bona fide stock option or purchase plans
or benefit plans adopted or assumed by the Board of Directors or the
Company's Compensation Committee,
(4) Common Stock issuable upon the exercise of rights
or warrants issued to the holders of Common Stock for which adjustment
was made previously pursuant to subsections (b) or (c) of this Section
13,
(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,
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(6) Common Stock issued in a bona fide public
offering pursuant to a firm commitment underwriting,
(7) Common Stock issued in a bona fide private
placement through a placement agent or a bona fide private offering
through initial purchasers pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the Act
and applicable state securities laws, where the placement agent or, as
the case may be, each of the initial purchasers is a member firm of the
National Association of Securities Dealers, Inc. to persons that are
not Affiliates (as defined in the Indentures) of the Company (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 Warrant Agent, shall exceed
15%),
(8) Common Stock issued to Affiliates of the Company
simultaneous with, and resulting in at least the same net proceeds per
share of Common Stock to the Company as, an issuance referred to in
paragraphs (6) or (7) of this Section 13(d), provided that Affiliates
of the Company do not purchase in the aggregate more than 15% of the
shares of Common Stock issued pursuant to paragraph (7) of this Section
13(d),
(9) Such shares of Common Stock as may become
issuable upon the exercise of any of the securities referred to in the
paragraphs (1) through (4) of this Section 13(d) by reason of
adjustments required pursuant to anti-dilution provisions applicable to
such securities as in effect on the date hereof, but only if and to the
extent that such adjustments are required as the result of the original
issuance of the Warrants, or
(10) Such shares of Common Stock as may become
issuable upon the exercise of any of the securities referred to in the
paragraphs (2) through (4) of this Section 13(d) by reason of
adjustments required pursuant to anti-dilution provisions applicable to
such securities as in effect on the date hereof, in order to reflect
any subdivision or combination of Common Stock, by reclassification or
otherwise, or any dividend on Common Stock payable in Common Stock.
(e) Adjustment for Convertible Securities Issue.
If, after the date of this Agreement, the Company issues any
securities convertible into or exchangeable for Common Stock (other than
securities issued in transactions described in subsections (a), (b) and (c) of
this
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Section 13) for a consideration per share of Common Stock initially deliverable
upon conversion or exchange of such securities less than the current market
price per share of Common Stock on the date of issuance of such securities, the
Exercise Price shall be adjusted in accordance with this formula:
where:
P
O + -----
M
E(1) = E x -----------
O + D
E(1) = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities.
P = the aggregate consideration received for the issuance of
such securities.
M = the current market price per share on the date of issuance
of such securities.
D = the maximum number of shares of Common Stock deliverable
upon conversion of 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,
provided that (a) no further adjustment of the Exercise Price shall be made upon
the subsequent issue or sale of shares of Common Stock upon the conversion or
exchange of such convertible securities, except in the case of any such
convertible securities which contain provisions requiring an adjustment,
subsequent to the date of the issue or sale thereof, of the number of shares of
Common Stock issuable upon the conversion or exchange of such convertible
securities by reason of (x) a change of control of the Company, (y) the
acquisition by any Person or group of Persons of any specified number or
percentage of the voting securities of the Company or (z) any similar event or
occurrence, each such case to be deemed hereunder to involve a separate issuance
of shares of Common Stock, or convertible securities, as the case may be; and
(b) if such convertible securities by
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their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number of shares of
common stock issuable, upon the exercise, conversion or exchange thereof (by
change of rate or otherwise), the Exercise Price computed upon the original
issue, sale, grant or assumption thereof, and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming effective, be
recomputed to reflect such increase or decrease insofar as it affects the rights
of conversion or exchange under such convertible securities, which are
outstanding at such time.
If all of the Common Stock deliverable upon conversion or
exchange of such securities has not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price that 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.
This subsection (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;
(3) convertible securities issued in a bona fide
private placement through a placement agent or a bona fide private
offering through initial purchasers pursuant to an exemption from, or
in transactions not subject to, the registration requirements of the
Act and applicable state securities laws, where the placement agent or,
as the case may be, each of the initial purchasers is a member firm of
the National Association of Securities Dealers, Inc. (except to 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 resolution of the Board of Directors which shall be
filed with the Warrant Agent, shall exceed 15%) or
(4) stock options issued to the Company's employees,
consultants or directors under bona fide stock option or purchase plans
or benefit plans adopted or assumed by the Board of Directors or the
Company's Compensation Committee.
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(f) Current Market Price.
All references in subsections (b), (c), (d) and (e) of this
Section 13 and in Section 7 and Section 15 to "the current market price per
share of Common Stock" on any date mean the average of the Quoted Prices of the
Common Stock for 30 consecutive trading days commencing 45 trading days before
the date in question. The "Quoted Price" of the Common Stock is the last
reported sales price of the Common Stock as reported by the Nasdaq Stock
Market's National Market ("Nasdaq") or if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common Stock on such
exchange which shall be for consolidated trading if applicable to such exchange,
or if not so reported or listed, the last reported bid price of the Common
Stock. If prices of the Common Stock are not so reported or the Common Stock is
not quoted on Nasdaq or listed on a securities exchange, then the references in
those subsections to "the current market price per share of Common Stock" shall
mean the fair market value of a share of Common Stock as determined by the Board
of Directors of the Company on such basis as it in good faith considers
appropriate (without regard to any illiquidity or minority discounts).
(g) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d) and (e) of this Section 13, 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 disinterested members
of the Board of Directors (irrespective of the accounting treatment
thereof), whose determination shall be conclusive (absent manifest
error), and described in a resolution of the Board of Directors which
shall be filed with the Warrant Agent; and
(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 minimum consideration, if any, to be received by the Company
upon the conversion
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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).
(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 l% 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 13 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
subsections (a), (b), (c), (d) or (e) of this Section 13 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 rights to purchase Common Stock
purchased at the fair market value thereof (determined in good faith by the
Board of Directors of the Company) pursuant to any of the Company's plans for
reinvestment of dividends or interest.
No adjustment need be made for a change in the par value, or
from par value to no par value, or from no par value to 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.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 16 hereof.
(k) Voluntary Reduction.
The Company from time to time may, as the Board of Directors
deems appropriate, 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
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period; provided, however, 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 it will be in
effect.
A reduction of the Exercise Price pursuant to this Section
13(k), other than a reduction which the Company has irrevocably committed will
be in effect for so long as any Warrants are outstanding, does not change or
adjust the Exercise Price otherwise in effect for purposes of subsections (a),
(b), (c), (d) and (e) of this Section 13.
(l) Reorganization of the Company.
(1) If the Company consolidates or merges with or
into, or transfers or leases all or substantially all of 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 of a Warrant 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 (any such person,
the "Successor Guarantor"), shall enter into a supplemental Warrant
Agreement so providing and further providing for adjustment which shall
be as nearly equivalent as may be practical to the adjustments provided
for in this Section 13. The Successor Guarantor shall mail to Warrant
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 .
(2) Notwithstanding paragraph (1) of this Section
13(l), in the case of any merger, reverse stock split, or other
transaction in which the publicly held Common Stock shall be converted
into the right to receive a consideration consisting solely of cash,
(A) this Warrant Agreement and each Warrant shall terminate and (B)
each holder of a Warrant, without having to take any other action than
the surrendering of such Warrant to the Company, shall receive an
amount equal to the amount (if any) by which the price per share
payable to, or which would be received by, any public
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holder of Common Stock in connection with such transaction exceeds the
Exercise Price effective at that time.
(3) If this subsection (l) applies, subsections (a),
(b), (c), (d) and (e) of this Section 13 do not apply.
(m) The Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to subsection (c), (d), (e), (f), (g) or (i) of this Section
13 is (absent manifest error) conclusive if such determination is made in good
faith.
(n) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment
under this Section 13 or Section 14 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 subsection (l) of this
Section 13 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 13 or Section 14.
(o) When Issuance or Payment May Be Deferred.
In any case in which this Section 13 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 15 hereof; provided, however, that the Company shall deliver
to such holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional Warrant Shares, other capital stock
and cash upon the occurrence of the event requiring such adjustment.
(p) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 13, 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
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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 of 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.
(q) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 14. No Dilution or Impairment. (a) If any event shall
occur as to which the provisions of Section 13 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 a
firm of independent certified public accountants of recognized national standing
(which may be the regular auditors of the Company), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in Section 13, necessary to preserve, without
dilution or impairment, the purchase rights, represented by this Warrant. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to the
Warrant Agent and the holders of the Warrants and shall make the adjustments
described therein.
(b) 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
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24
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 (i) 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 (ii) 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 13(l) shall not be prohibited by or require any
adjustment under this Section 14.
SECTION 15. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares 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 Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 15,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall notify the Warrant Agent in writing of the Amount to be paid in
lieu of the fraction of a Warrant Share and concurrently pay or provide to the
Warrant Agent for repayment to the Warrant holder an amount in cash equal to the
product of (i) such fraction of a Warrant Share and (ii) the difference of the
current market price of a share of Common Stock over the Exercise Price.
SECTION 16. Notices to Warrant Holders. Upon any adjustment of
the Exercise Price pursuant to Section 13 hereof, the Company shall within 15
days thereafter (i) cause to be filed with the Warrant Agent a certificate of a
firm of independent public accountants of recognized national standing selected
by the Board of Directors of the Company (which may be the regular auditors of
the Company) setting forth the Exercise Price after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered holders of
the Warrant certificates at such registered holder's address appearing on the
Warrant register written notice of such adjustments by first-class mail, postage
prepaid. Where appropriate, such
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25
notice may be given in advance and included as a part of the notice required to
be mailed under the other provisions of this Section 16.
In case:
(a) The Company shall authorize the issuance to all holders of
shares of Common Stock of options, warrants or other rights (howsoever
classified) 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 subsection (a) of 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) The Company proposes to take any action (other than
actions of the character described in Section 13(a)) which would require an
adjustment of the Exercise Price pursuant to Section 13; then, in each case, 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 his
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 is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for
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26
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up. 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, lease,
dissolution, liquidation or winding up, 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 17. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
or agency 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. If, at the time such successor to the
Warrant Agent by merger or consolidation succeeds to the agency created by this
Agreement, 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 if, at that time any of the
Warrant certificates shall not have been countersigned, any such 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 in this Agreement.
SECTION 18. 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. 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.
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27
(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.
(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) 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. The Warrant Agent shall not be bound by
any notice or demand, or any waiver, modification, termination or
revision of this Agreement or any of the terms hereof, unless evidenced
by a writing between the Company and the Warrant Agent.
(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 (including reasonable counsel fees), taxes (including
withholding taxes) and governmental charges and other charges of any
kind and nature incurred by the Warrant Agent in the execution,
delivery and performance of its responsibilities under this Agreement
and to indemnify the Warrant Agent and save it harmless against any and
all liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution,
delivery and performance of its responsibilities under this Agreement
except as a result of its 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
registered 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
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28
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 registered holders of the Warrants, as their
respective rights or interests may appear.
(g) Except as required by law, the Warrant Agent, and any
stockholder, director, officer or employee of the Warrant Agent, may
buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in any 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 express
provisions hereof. The Warrant Agent shall not be liable for anything
which it may do or refrain from doing in connection with this
Agreement, except for its own negligence or bad faith, provided, that,
in no event shall the Warrant Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Warrant Agent has been advised of
the likelihood of such loss or damage and regardless of the form of
action.
(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 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.
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SECTION 19. Registration Statement.
(a) Shelf Registration of Warrant Shares. The Company shall
use its best efforts to keep the Registration Statement continuously effective
until 30 days after the Expiration Date.
(b) Registration Expenses.
All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether the Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses in compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Warrant Shares and printing of Prospectuses), messenger and delivery services
and telephone calls; (iv) all fees and disbursements of counsel for the Company;
(v) all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance); and (vi) the Company's internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses of
any annual audit, rating agency fees and the fees and expenses of any person,
including special experts retained by the Company.
(c) Notwithstanding the foregoing, during any consecutive 365-
day period, the Company shall have the privilege to suspend availability of the
Registration Statement for up to two 30 consecutive day periods, except for the
consecutive 30-day period immediately prior to the Expiration Date, if the
Company's Board of Directors in good faith determines in the exercise of its
reasonable judgment that there is a valid business purpose for such suspension.
SECTION 20. Change of Warrant Agent. If the Warrant Agent
shall become incapable of acting as Warrant Agent or shall resign as provided
below, the Company shall appoint a successor to such 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 incapacity by the Warrant Agent or by the
registered holders of a majority of Warrant certificate, then the registered
holder of any Warrant certificates may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to such Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. The registered holders of a majority of the unexercised Warrants shall
be entitled at any time to remove the Warrant Agent and appoint a successor to
such Warrant Agent. Such
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successor to the Warrant Agent need not be approved by the Company or the former
Warrant Agent. After appointment the successor to the Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor to the Warrant
Agent any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section 20, however, or any defect therein,
shall not affect the legality or validity of the appointment of a successor to
the Warrant Agent.
The Warrant Agent may resign at any time and be discharged
from the obligations hereby created by so notifying the Company in writing at
least 30 days in advance of the proposed effective date of its resignation. If
no successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent.
SECTION 21. Notices to the Company and Warrant Agent. Any
notice or demand authorized by this Agreement to be given or made by the Warrant
Agent or by the registered 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:
NTL Incorporated
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Any notice pursuant to this Agreement to be given by the
Company or by the registered 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 at the
Warrant Agent Office as follows:
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00
Xxx Xxxxx Xxxxxxxxx Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trustee
Administration Department
Notice may also be given by facsimile transmission (effective
when receipt is acknowledged) or by overnight delivery service (effective the
next business day).
SECTION 22. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Warrant certificates in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way adversely affect the interests of the holders of Warrant
certificates. Any amendment or supplement to this Agreement that has a adverse
effect on the interests of holders shall require the written consent of
registered holders of a majority of the then outstanding Warrants (excluding
Warrants held by the Company or 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 in
accordance with Section 13 or 14 hereof).
SECTION 23. 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 24. Termination. This Agreement shall terminate at
5:00 p.m., New York, New York time on the Expiration Date. Notwithstanding the
foregoing, this Agreement will terminate on such earlier date on which all
outstanding Warrants have been exercised. The provisions of Section 18 hereof
shall survive such termination, and the provisions of Section 19 hereof shall
survive for 30 days after such termination.
SECTION 25. Governing Law; Jurisdiction. This Agreement and
each Warrant certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the internal laws of said State. The parties
hereto irrevocably consent to the jurisdiction of the courts of the State of New
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York and any federal court located in such state in connection with any action,
suit or proceeding arising out of or relating to this Agreement.
SECTION 26. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Company, the Warrant Agent and the registered holders of the Warrant
certificates any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Warrant Agent and the registered holders of the Warrant certificates.
SECTION 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.
SECTION 28. Further Assurances. From time to time on and after
the date hereof, the Company shall deliver or cause to be delivered to the
Warrant Agent such further documents and instruments and shall do and cause to
be done such further acts as the Warrant Agent shall reasonably request (it
being understood that the Warrant Agent shall have no obligation to make such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
NTL INCORPORATED
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Warrant
Agent,
By:
--------------------------------------
Name:
Title:
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Form of Warrant Certificate EXHIBIT A
[Face]
EXERCISABLE ON OR AFTER THE DATE OF THIS CERTIFICATE (IF A REGISTRATION
STATEMENT RELATING TO THE WARRANT SHARES IS IN EFFECT) AND ON OR BEFORE
__________, 2008 [THE TENTH ANNIVERSARY OF THE DATE OF ORIGINAL ISSUANCE OF THE
WARRANTS]
No. _____ CUSIP No. _________ __________ Warrants
WARRANT CERTIFICATE
NTL INCORPORATED
This Warrant Certificate certifies that _________________________________
______________________________, or registered assigns, is the registered holder
of _____________________________________________________________________________
Warrants expiring on __________, 2008, the tenth anniversary of the date of
original issuance of the Warrants (the "Warrants"), to purchase shares of the
Common Stock, par value $.01 (the "Common Stock"), of NTL Incorporated, a
Delaware corporation (the "Company"). Each Warrant entitles the holder upon
exercise at any time from 9:00 a.m. on the date of this Warrant certificate to
5:00 p.m. New York, New York time, on __________, 2008 [the tenth anniversary of
the date of original issuance of the Warrants] to receive from the Company one
fully paid and nonassessable share of Common Stock (each a "Warrant Share") for
each Warrant at the initial exercise price (the "Exercise Price") of $[_____]
per share payable (i) in United States dollars or (ii) by certified or official
bank check to the order of the Company. 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. All capitalized
terms not defined herein shall have the meanings assigned to such terms in the
Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York, New
York Time on __________, 2008 [the tenth anniversary of the date of original
issuance of the Warrants] , and to the extent not exercised by such time such
Warrants shall become void.
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.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, NTL Incorporated has caused this Warrant
Certificate to be signed by the undersigned Chairman of the Board, Chief
Executive Officer, President or Vice President and the undersigned Secretary or
Assistant Secretary and has caused its corporate seal to be affixed hereunto or
imprinted hereon.
Dated: ______________________________
NTL INCORPORATED
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Countersigned: (seal)
THE CHASE MANHATTAN BANK,
as Warrant Agent
By: ______________________________
Authorized Officer
35
Form of Warrant Certificate
[Reverse]
THE COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE "COMMON STOCK")
FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. ACCORDINGLY, NO
WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT
ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i) A REGISTRATION STATEMENT
UNDER THE ACT RELATING TO THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF THIS WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH,
AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE
"SEC"), AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (ii) THE ISSUANCE
OF THE WARRANT SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT.
By accepting a Warrant Certificate bearing the legend above, each holder shall
be bound by all of the terms and provisions of the Warrant Agreement (a copy of
which is available on request to the Company or the Warrant Agent) as fully and
effectively as if such holder had signed the same.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring on __________, 2008 [the tenth
anniversary of the date of original issuance of the Warrants], entitling the
holder upon exercise to receive shares of Common Stock of the Company (the
"Common Stock"), and are issued or to be issued pursuant to a Warrant Agreement
dated as of _______, 1998 (the "Warrant Agreement"), duly executed and delivered
by the Company to The Chase Manhattan Bank, 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.
The holder of the Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with the
form of election to purchase set forth below on this Warrant Certificate
properly completed and executed,
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36
together with payment of the Exercise Price in accordance with the provisions
set forth on the face of this Warrant Certificate. 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 and the number of shares of Common Stock
issuable upon exercise of this Warrant, in each case, set forth on the face
hereof may, subject to certain conditions, be adjusted. If the Exercise Price is
adjusted, the Warrant Agreement provides that the number of shares of Common
Stock issuable upon the exercise of each Warrant may 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.
Warrant Certificates, when surrendered at the principal
corporate trust office of the Warrant Agent by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant
Certificate or Warrant Certificates of like tenor evidencing in the aggregate a
like number of Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the principal corporate trust office of the Warrant Agent
a new Warrant Certificate or Warrant Certificates of like tenor and evidencing
in the aggregate a like number of Warrants shall be issued to the transferee(s)
in exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder(s) hereof 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.
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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 (check one)______tenders payment for such shares to the order
of NTL Incorporated in the amount of $_____ per share of Common Stock in
accordance with the terms hereof, in cash or by certified or official bank check
to the order of the Company, or _______ elects to receive payment of the
applicable Spread (as defined in the Warrant Agreement).
The undersigned requests that a certificate for such shares be
registered in the name _____________________________, whose address is
_______________________________________ and that 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 ________________________.
Date: _______________
Your Signature: ______________________________________
(Sign exactly as your name appears on the face of this
Warrant)
Signature Guarantee:
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ASSIGNMENT FORM
To assign this Warrant, fill in the form below: (I) or (we) assign and
transfer this Warrant to
_____________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________ to transfer this Warrant on
the books of the Company. The agent may substitute another to act for him.
_____________________________________________________________
Date: __________________
Your Signature: _______________________________________________
(Sign exactly as your name appears on the face of this Warrant)
Signature Guarantee:
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