Exhibit 4.4
EXECUTION COPY
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SERIES A WARRANT AGREEMENT
between
AMF BOWLING WORLDWIDE, INC.
and
MELLON INVESTOR SERVICES LLC,
as Warrant Agent
March 8, 2002
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TABLE OF CONTENTS
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SECTION 1 Appointment of Warrant Agent.............................................................. 1
SECTION 2 Issuances ................................................................................ 1
SECTION 3 Form of Warrant Certificates.............................................................. 1
SECTION 4 Execution of Warrant Certificates......................................................... 2
SECTION 5 Registration and Countersignature......................................................... 2
SECTION 6 Registration of Transfers and Exchanges................................................... 3
SECTION 7 Duration and Exercise of Warrants......................................................... 6
SECTION 8 Cancellation of Warrants.................................................................. 10
SECTION 9 Mutilated or Missing Warrant Certificates................................................. 10
SECTION 10 Reservation of Shares..................................................................... 10
SECTION 11 Stock Exchange Listings................................................................... 11
SECTION 12 Adjustment of Exercise Price and Number of Shares Purchasable or Number of Warrants....... 11
SECTION 13 Fractional Shares......................................................................... 16
SECTION 14 Notices to Warrantholders................................................................. 16
SECTION 15 Merger, Consolidation or Change of Name of Warrant Agent.................................. 17
SECTION 16 Warrant Agent............................................................................. 18
SECTION 17 Change of Warrant Agent................................................................... 20
SECTION 18 Warrantholder Not Deemed a Stockholder.................................................... 21
SECTION 19 Notices to Company and Warrant Agent...................................................... 21
SECTION 20 Payment of Taxes and Charges.............................................................. 22
SECTION 21 Supplements and Amendments................................................................ 22
SECTION 22 Successors................................................................................ 23
SECTION 23 Termination............................................................................... 23
SECTION 24 Governing Law Venue and Jurisdiction...................................................... 23
SECTION 25 Benefits of this Agreement................................................................ 23
SECTION 26 Counterparts.............................................................................. 23
SECTION 27 Headings.................................................................................. 24
SECTION 28 Meaning of Terms Used in Agreement........................................................ 24
SECTION 29 Severability.............................................................................. 24
This SERIES A WARRANT AGREEMENT (this "Agreement") is dated as
of March 8, 2002, between AMF BOWLING WORLDWIDE, INC., a Delaware corporation
(the "Company"), and MELLON INVESTOR SERVICES LLC, a New Jersey limited
liability company (in its capacity as warrant agent hereunder, the "Warrant
Agent").
W I T N E S S E T H
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WHEREAS, pursuant to the Second Amended, Second Modified Plan
of Reorganization for the Company dated January 31, 2002 (as may be further
modified, supplemented or amended, the "Plan") under chapter 11 of title 11 of
the United States Code, 11 U.S.C. ss.ss.101 et seq., the Company proposes to
issue 1,764,706 Series A warrants (the "Warrants") entitling the holders to
purchase initially an aggregate of up to 1,764,706 shares (as may be adjusted
from time to time pursuant to this Agreement, the "Shares") of the Company's
Common Stock, par value $0.01 per share ("Common Stock");
WHEREAS, the Warrant Agent, at the request of the Company, has
agreed to act as the agent of the Company in connection with the issuance,
registration, transfer, exchange, exercise and conversion of the Warrants;
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions hereinafter set forth in this Agreement; and the Warrant Agent
hereby accepts such appointment, upon the terms and conditions hereinafter set
forth.
SECTION 2. Issuances. Subject to the provisions of this
Agreement, in accordance with the terms of the Plan, on (and from time to time
after) the Initial Distribution Date (as defined in the Plan), Warrants to
purchase the Shares will be issued and delivered by the Company in the amounts
and to the recipients specified in the Plan. On or after the Initial
Distribution Date, the Company will deliver, or cause to be delivered, one or
more Global Warrant Certificates (as defined below) evidencing the Warrants in
accordance with the terms of the Plan.
SECTION 3. Form of Warrant Certificates. Subject to Section 6
of this Agreement, the Warrants shall initially be issued in the form of one or
more global certificates (the "Global Warrant Certificates"), the forms of
election to exercise and of assignment to be printed on the reverse thereof, in
substantially the form set forth in Exhibit A hereto (including the information
set forth in footnote 1 thereto) together with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or with
any rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Warrant Certificates, as evidenced by
their execution of the Warrant Certificates.
The Global Warrant Certificates shall be deposited on or after
the Initial Distribution Date with, or with the Warrant Agent as custodian for,
The Depository Trust Company (the "Depositary") and registered in the name of
Cede & Co., as the Depositary's nominee. Each Global Warrant Certificate shall
represent such number of the outstanding Warrants as specified therein, and each
shall provide that it shall represent the aggregate amount of outstanding
Warrants from time to time endorsed thereon and that the aggregate amount of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate, in accordance with the terms of this Agreement. Upon
request, a Holder may receive from the Depositary and the Warrant Agent Warrants
in definitive form (the "Definitive Warrant Certificates" and, together with the
Global Warrant Certificates, the "Warrant Certificates"), substantially in the
form of Exhibit A (not including footnote 1 thereto) as set forth in Section 6
below.
SECTION 4. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board of Directors, its Chief Executive Officer, its President, a Vice President
or its Treasurer (each, an "Officer"). Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of any such Officer 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
Officer.
If any Officer 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 Officer had not ceased to be such
Officer of the Company; and any Warrant Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Agreement any
such person was not such officer.
SECTION 5. Registration and Countersignature. The Warrant
Agent shall, upon receipt of the Warrant Certificates duly executed on behalf of
the Company, countersign one or more Warrant Certificates evidencing the
Warrants and shall deliver such Warrant Certificates to or upon the written
order of the Company. A Warrant Certificate shall be, and shall remain, subject
to the provisions of this Agreement until such time as all of the Warrants
evidenced thereby shall have been duly exercised or shall have expired or been
canceled in accordance with the terms hereof.
No Warrant Certificate shall be valid for any purpose, and no
Warrant evidenced thereby shall be exercisable, until such Warrant Certificate
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that such Warrant Certificate so
countersigned has been duly issued hereunder.
The Warrant Agent shall keep, at an office designated for such
purpose, books (the "Warrant Register") in which, subject to such reasonable
regulations as it may prescribe, it shall register the Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates in accordance with
the procedures set forth in Section 6 of this Agreement, all in
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form satisfactory to the Company and the Warrant Agent. No service charge shall
be made for any exchange or registration of transfer of the Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. The Warrant Agent
shall have no obligation to effect an exchange or register a transfer unless and
until any payments required by the immediately preceding sentence have been
made.
Prior to due presentment for registration of transfer or
exchange of any Warrant in accordance with the procedures set forth in this
Agreement, the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered (the "Holder" of such Warrant) as the
absolute owner of such Warrant (notwithstanding any notation of ownership or
other writing made in a Warrant Certificate by anyone), for the purpose of any
exercise thereof, any distribution to the Holder thereof and for all other
purposes, and neither the Warrant Agent nor the Company shall be affected by
notice to the contrary.
SECTION 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrant Certificates
or Beneficial Interests Therein. The transfer and exchange of Global Warrant
Certificates 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
Certificate for a Definitive Warrant Certificate.
(i) Any Holder of a beneficial interest in a Global
Warrant Certificate may, upon request, exchange such beneficial
interest for a Definitive Warrant Certificate. Upon receipt by the
Warrant Agent from the Depositary or its nominee of written
instructions or such other form of instructions as is customary for
the Depositary on behalf of any person having a beneficial interest in
a Global Warrant Certificate, the Warrant Agent shall cause, in
accordance with the standing instructions and procedures existing
between the Depositary and Warrant Agent, the number of Warrants
represented by the Global Warrant Certificate to be reduced by the
number of Warrants to be represented by the Definitive Warrant
Certificates to be issued in exchange for the interest of such person
in the Global Warrant Certificate 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
Certificate.
(ii) Definitive Warrant Certificates issued in
exchange for a beneficial interest in a Global Warrant Certificate
pursuant to this Section 6(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 Warrant Certificates to
the persons in whose names such Warrants are so registered.
(c) Transfer and Exchange of Definitive Warrant
Certificates. When Definitive Warrant Certificates are presented to the Warrant
Agent with a request:
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(i) to register the transfer of the Definitive
Warrant Certificates; or
(ii) to exchange such Definitive Warrant Certificates
for an equal number of Definitive Warrant Certificates 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 Warrant Certificates presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Warrant Agent, duly executed
by the Holder thereof or by his attorney, duly authorized in writing.
(d) Restrictions on Exchange or Transfer of a Definitive
Warrant Certificate for a Beneficial Interest in a Global Warrant Certificate. A
Definitive Warrant Certificate may not be exchanged for a beneficial interest in
a Global Warrant Certificate except upon satisfaction of the requirements set
forth below. Upon receipt by the Warrant Agent of a Definitive Warrant
Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Warrant Agent, together with written
instructions directing the Warrant Agent to make, or to direct the Depositary to
make, an endorsement on the Global Warrant Certificate to reflect an increase in
the number of Warrants represented by the Global Warrant Certificate equal to
the number of Warrants represented by such Definitive Warrant Certificate, then
the Warrant Agent shall cancel such Definitive Warrant Certificate 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 represented by the Global Warrant Certificate to be increased
accordingly. If no Global Warrant Certificates are then outstanding, the Company
shall issue and the Warrant Agent shall countersign a new Global Warrant
Certificate representing the appropriate number of Warrants.
(e) Restrictions on Transfer and Exchange of Global
Warrant Certificates. Notwithstanding any other provisions of this Agreement
(other than the provisions set forth in Section 6(f)), unless and until it is
exchanged in whole for Definitive Warrant Certificates, a Global Warrant
Certificate 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 Warrant Certificates in
Absence of Depositary. If at any time:
(i) the Depositary for the Global Warrant
Certificates notifies the Company that the Depositary is unwilling or
unable to continue as Depositary for the Global Warrant Certificates
and a successor Depositary for the Global Warrant Certificates is not
appointed by the Company within 90 days after delivery of such notice;
or
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(ii) the Company, in its sole discretion, notifies
the Warrant Agent in writing that it elects to cause the issuance of
Definitive Warrant Certificates 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
Warrant Certificates, in an aggregate number equal to the number of Warrants
represented by the Global Warrant Certificates, in exchange for such Global
Warrant Certificates.
(g) No Warrants, or shares of Common Stock issuable upon
exercise of the Warrants, shall be sold, exchanged or otherwise transferred in
violation of the Securities Act of 1933, as amended (the "Securities Act"), or
state securities laws. The Company or the Warrant Agent may require that, as a
condition to any sale, exchange or transfer of a Warrant or such shares of
Common Stock that the Holder deliver to the Company and the Warrant Agent an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company and to the Warrant Agent, to the effect that such sale, exchange
or transfer is made in compliance with the Securities Act and all applicable
state securities laws or pursuant to an exempt transaction under the Securities
Act and state securities laws. The provisions of this paragraph (g) shall not
apply to the exercise of any Warrant to the extent that the Shares issued upon
such exercise (and any unexercised portion of the Warrant so exercised) shall be
issued to the same Holder that exercised such Warrant.
(h) The Warrant Certificates and the shares of Common
Stock issuable upon exercise of the Warrants shall bear such legends as the
Company shall determine reflecting the restrictions in the immediately preceding
Section 6(g).
(i) Cancellation of Global Warrant Certificate. At such
time as all beneficial interests in Global Warrant Certificates have either been
exchanged for Definitive Warrant Certificates, redeemed, repurchased or
cancelled, all Global Warrant Certificates shall be returned to or retained and
cancelled by the Warrant Agent.
(j) Obligations with Respect to Transfers and Exchanges
of Warrants.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Warrant Agent is hereby
authorized to countersign, in accordance with the provisions of
Section 3 and this Section 6, Definitive Warrant Certificates and
Global Warrant Certificates as required pursuant to the provisions of
this Section 6 and for the purpose of any distribution of Warrant
Certificates contemplated by Section 12.
(ii) All Definitive Warrant Certificates and Global
Warrant Certificates issued upon any registration of transfer or
exchange of Definitive Warrant Certificates or Global Warrant
Certificates shall be the valid obligations of the Company, entitled
to the same benefits under this Agreement as the Definitive Warrant
Certificates or Global Warrant Certificates surrendered upon such
registration of transfer or exchange.
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(iii) No service charge shall be made to a Holder for
any registration, transfer or exchange.
(iv) So long as the Depositary, or its nominee, is
the registered owner of a Global Warrant Certificate, the Depositary
or such nominee, as the case may be, will be considered the sole owner
or holder of the Warrants represented by such Global Warrant
Certificate for all purposes under this Agreement. Except as provided
in Section 6(b) upon the exchange of a beneficial interest in a Global
Warrant Certificate for a Definitive Warrant Certificate, owners of
beneficial interests in a Global Warrant Certificate will not be
entitled to have any Warrants registered in their names, and will not
receive or be entitled to receive physical delivery of any such
Warrants as Definitive Warrant Certificates and will not be considered
the owners or holders thereof under the Warrants or this Agreement.
Neither the Company nor the Warrant Agent, in its capacity as
registrar for such Warrants, will have any responsibility or liability
for any aspect of the records relating to beneficial interests in a
Global Warrant Certificate or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
(v) Subject to Sections 6(b), (c), (d) and this
Section 6(j), the Warrant Agent shall, upon receipt of all information
required to be delivered hereunder, from time to time register the
transfer of any outstanding Warrants represented by Warrant
Certificates in the Warrant Register, upon surrender of Warrant
Certificates representing such Warrants at the Warrant Agent Office
(as defined below), duly endorsed, and accompanied by a completed form
of assignment, duly signed by the Holder thereof or by the duly
appointed legal representative thereof or by a duly authorized
attorney, such signature to be guaranteed by (i) a bank or trust
company, (ii) a broker or dealer that is a member of the National
Association of Securities Dealers, Inc. (the "NASD") or (iii) a member
of a national securities exchange. Upon any such registration of
transfer, a new Warrant Certificate shall be issued to the transferee.
SECTION 7. Duration and Exercise of Warrants. (a) The
Warrants shall expire at 5:00 p.m. on March 9, 2009 (such date, the "Expiration
Date"). On the Expiration Date, the Warrants will become void and of no value.
(b) Subject to the provisions of this Agreement,
including Section 12, each Warrant shall entitle the holder thereof to purchase
from the Company (and the Company shall issue and sell to such holder) one fully
paid and nonassessable Share at a price equal to $21.19 per share (as the same
may be hereafter adjusted pursuant to Section 12, the "Exercise Price").
(c) From and after the Initial Distribution Date under,
and as defined in, the Plan and until 5:00 p.m., New York City time, on the
Expiration Date with respect to such Warrant, the Holder of a Warrant may
exercise such Holder's right to purchase Shares by
(i) providing written notice of such election
("Warrant Exercise Notice") to exercise the Warrant to the Warrant
Agent at the address set forth in Section 19 hereof, "Re: AMF Bowling
Worldwide, Inc. Warrant Exercise", by hand or by facsimile, no later
than 5:00 p.m., New York City time, on the Expiration Date, which
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Warrant Exercise Notice shall be in the form of an election to purchase
Shares of Common Stock of the Company substantially in the form set
forth either (x) in Exhibit B-1 hereto, properly completed and executed
by the Holder; provided that such written notice may only be submitted
by persons who hold Definitive Warrant Certificates, or (y) in Exhibit
B-2 hereto, properly completed and executed by the Holder; provided
that such written notice may only be submitted with respect to Warrants
held through the book-entry facilities of the Depositary, by or through
persons that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m.,
New York City time, on the business day immediately prior to the
Settlement Date, as defined below, such Warrants to the Warrant Agent
by book-entry transfer through the facilities of the Depositary or (y)
no later than 5:00 p.m., New York City time, on the business day
immediately prior to the Settlement Date, the Warrant Certificates
evidencing such Warrants to the Warrant Agent if Definitive Warrant
Certificates have been issued and delivered pursuant to Section 3; and
(iii) paying the applicable Exercise Price multiplied
by the number of Shares in respect of which such Warrants are being
exercised (the "Exercise Amount"), together with any applicable taxes
and governmental charges. The date three business days after a Warrant
Exercise Notice is delivered is referred to for all purposes under
this Agreement as the "Settlement Date".
(d) The Exercise Amount shall be payable in lawful money
of the United States of America either (i) by wire transfer in immediately
available funds of the Exercise Amount to an account of the Warrant Agent
specified in writing by the Warrant Agent for such purpose, no later than 5:00
p.m., New York City time, on the business day immediately prior to the
Settlement Date, (ii) by surrender to the Warrant Agent through the facilities
of the Depositary for cancellation of shares of Common Stock newly acquired upon
exercise of the Warrant, valued at the Market Price (as hereinafter defined)
equal to the Exercise Amount or (iii) by a combination of the methods described
in clauses (i) and (ii) of this subparagraph (d). The term "Market Price" shall
mean (x) the average closing price of a share of Common Stock for the ten
consecutive trading days immediately preceding, but not including, the date of
exercise of this Warrant as reported on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or (y) if not listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices during such ten trading day
period in the over-the-counter market as reported by the NASD Automated
Quotation System ("Nasdaq") National Market or any comparable system or (z) in
all other cases, as determined in good faith by the Board of Directors of the
Company (including any authorized committee thereof, the "Board of Directors"),
whose determination shall be conclusive absent manifest error.
(e) Any exercise of a Warrant pursuant to the terms of
this Agreement shall be irrevocable and shall constitute a binding agreement
between the Holder and the Company, enforceable in accordance with its terms.
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(f) The Warrant Agent shall notify the Depositary of (x)
the Warrant Agent's account at the Depositary to which the Warrants must be
delivered by the business day immediately prior to the Settlement Date for those
Warrants to be exercised through the book-entry facilities of the Depositary and
(y) the address, phone number and facsimile number where holders of the Warrants
can contact the Warrant Agent to which Warrant Exercise Notices are to be
submitted.
(g) Promptly following delivery of Warrants to a Holder,
the Warrant Agent shall notify such Holder (through the clearing system) of (i)
the Warrant Agent's account at the Depositary to which holders must deliver
Warrants on the business day immediately prior to the Settlement Date, (ii) the
Warrant exercise procedures of the Depositary and (iii) the address, telephone
number and facsimile number where Holders can contact the Warrant Agent and to
which Holders must submit Warrant Exercise Notices if they decide to exercise
their Warrants. At such time, the Warrant Agent shall also provide then Holders
with a Warrant Exercise Notice and the pertinent instructions as to how to
exercise their Warrants.
(h) The Warrant Agent shall:
(i) examine all Warrant Exercise Notices and all
other documents delivered to it by or on behalf of holders as
contemplated by the Warrant Certificates to ascertain whether, on
their face, such Warrant Exercise Notices and any such other documents
have been executed and completed in accordance with their terms and
the terms of the Warrant Certificates;
(ii) determine whether the exercising Warrant Holder
has delivered the related Warrants to the Warrant Agent's account at
the Depositary. In each case where a Warrant Exercise Notice or other
document appears on its face to have been improperly completed or
executed or some other irregularity in connection with the exercise of
the Warrants exists, the Warrant Agent shall endeavor to inform the
appropriate parties (including the person submitting such instrument)
of the need for fulfillment of all requirements, specifying those
requirements which appear to be unfulfilled. Except to the extent
provided in the immediately preceding sentence, the Warrant Agent
shall be under no duty to give notice to any person of any
irregularities in Warrant Exercise Notices, delivery of Warrants or
any other document completed or executed in connection therewith nor
shall it incur any liability for failure to give such notice;
(iii) inform the Company of and cooperate with and
assist the Company in resolving any reconciliation problems between
Warrant Exercise Notices received and delivery of Warrants to the
Warrant Agent's account;
(iv) advise the Company no later than one business
day after receipt of a Warrant Exercise Notice, of (i) the receipt of
such Warrant Exercise Notice and the number of Warrants exercised in
accordance with the terms and conditions of this Agreement, (ii) the
instructions with respect to delivery of the shares of Common Stock of
the Company deliverable upon such exercise, subject to timely receipt
from the
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Depositary of the necessary information, and (iii)
such other information as the Company shall reasonably require;
(v) notify, by such time as necessary to ensure a
prompt closing, the Depositary, with a copy to the Company, each
account at the Depositary to be credited with Common Stock and the
amount thereof to be credited to each such account; and
(vi) subject to Common Stock being made available to
the Warrant Agent by or on behalf of the Company for delivery to
accounts within the Depositary, liaise with the Depositary and
endeavor to effect such delivery to the relevant accounts at the
Depositary in accordance with its requirements.
(i) All questions as to the validity, form and
sufficiency (including time of receipt) of a Warrant exercise will be determined
by the Company in its sole discretion, which determination shall be final and
binding. The Warrant Agent shall incur no liability for or in respect of such
determination by the Company. The Company reserves the right to reject any and
all Warrant Exercise Notices not in proper form or for which any corresponding
agreement by the Company to exchange would, in the opinion of the Company, be
unlawful. Such determination by the Company shall be final and binding on the
Holders, absent manifest error. Moreover, the Company reserves the absolute
right to waive any of the conditions to the exercise of Warrants or defects in
Warrant Exercise Notices with regard to any particular exercise of Warrants. The
Company shall be under no duty to give notice to the holders of the Warrants of
any irregularities in any exercise of Warrants, nor shall it incur any liability
for the failure to give such notice.
(j) As soon as practicable after the exercise of any
Warrant, the Company shall issue, or otherwise deliver, in authorized
denominations to or upon the order of the Holder of the Warrant Certificates
evidencing such Warrants, either
(i) if such Holder holds the Warrants being exercised
through the Depositary's book-entry transfer facilities, by same-day
credit to such Holder's account at the Depositary or to the account of
a participant in the Depositary the number of Shares to which such
Holder is entitled, in each case registered in such name and delivered
to such account as directed in the Warrant Exercise Notice by such
Holder or by the direct participant in the Depositary through which
such Holder is acting, or
(ii) if such Holder holds the Warrants being
exercised in the form of Definitive Warrant Certificates, by delivery
to the address designated by such Holder in its Warrant Exercise
Notice of a physical certificate representing the number of Shares to
which such Holder is entitled, in fully registered form, registered in
such name or names as may be directed by such Holder. If less than all
of the Warrants evidenced by a Warrant Certificate surrendered upon
the exercise of Warrants are exercised at any time prior to the date
of expiration for the Warrants , a new Warrant Certificate or
Certificates shall be issued for the remaining number of Warrants
evidenced by the Warrant Certificate so surrendered, and the Warrant
Agent is hereby authorized to
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countersign the required new Warrant Certificate or Certificates
pursuant to the provisions of Section 6 and this Section 7.
SECTION 8. Cancellation of Warrants. If the Company shall
purchase or otherwise acquire Warrants, the Warrant Certificates representing
such Warrants shall thereupon be delivered to the Warrant Agent and be cancelled
by it and retired. The Warrant Agent shall cancel all Warrant Certificates
surrendered for exchange, substitution, transfer or exercise in whole or in
part. Such cancelled Warrant Certificates shall thereafter be disposed of in a
manner satisfactory to the Company.
SECTION 9. 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 and deliver, 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 the loss, theft or
destruction of such Warrant Certificate and the posting of an indemnity or bond,
if requested by either the Company or the Warrant Agent, also 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 and as required by Section 8-405 of
the Uniform Commercial Code as in effect in the State of New York.
SECTION 10. Reservation of Shares. For the purpose of enabling
it to satisfy any obligation to issue Shares upon exercise of Warrants, the
Company will at all times through the Expiration Date, reserve and keep
available, free from preemptive rights and out of its aggregate authorized but
unissued or treasury shares of Common Stock, the number of Shares deliverable
upon the exercise of all outstanding Warrants, and the transfer agent for the
Company's Common Stock (such agent, in such capacity, as may from time to time
be appointed by the Company, the "Transfer Agent") is hereby irrevocably
authorized and directed at all times to reserve such number of authorized and
unissued or treasury shares of Common Stock as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with such
Transfer Agent and with every transfer agent for any shares of the Company's
capital stock issuable upon the exercise of Warrants pursuant to Section 7. The
Warrant Agent is hereby irrevocably authorized to requisition from time to time
from such Transfer Agent stock certificates issuable upon exercise of
outstanding Warrants, and the Company will supply such Transfer Agent with duly
executed stock certificates for such purpose.
Before taking any action that would cause an adjustment
pursuant to Section 12 reducing any Exercise Price below the then par value (if
any) of the Shares issuable upon exercise of the Warrants, the Company will take
any corporate action that may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Shares at such Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock issued
upon exercise of the Warrants will, upon issuance in accordance with the terms
of this Agreement, be fully paid
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and nonassessable and free from all taxes, liens, charges and security interests
created by or imposed upon the Company with respect to the issuance and holding
thereof.
SECTION 11. Stock Exchange Listings. So long as any Warrants
remain outstanding, the Company will use commercially reasonable efforts to take
all necessary action to have the shares of Common Stock, immediately upon their
issuance upon exercise of Warrants, (i) listed on each national securities
exchange on which the Common Stock is then listed or (ii) if the Common Stock is
not then listed on any national securities exchange, listed for quotation on the
Nasdaq National Market System or such other over-the-counter quotation system,
if any, on which the Common Stock may then be listed.
SECTION 12. Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants. The Exercise Price, the number of shares of
Common Stock purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 12.
(a) If the Company shall (i) pay a dividend or make a
distribution on Common Stock consisting of shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock or (iv)
issue, in a reclassification of the Common Stock, other securities of the
Company (including any such reclassification in connection with a consolidation
or merger of the Company in which the Company is the surviving entity), the
number of Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the holder of each Warrant shall be entitled
upon exercise to receive the kind and number of Shares or other securities of
the Company which such holder would have owned or have been entitled to receive
after the happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.
(b) (i) If the Company at any time or from time to time
after the date hereof shall distribute to all holders of Common Stock
(including any such distribution made to the shareholders of the Company in
connection with a consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness, cash or assets
(other than (A) distributions and dividends payable in shares of Common
Stock or (B) cash dividends or distributions paid out of retained earnings
or surplus legally available for such dividends or distributions), then, in
each case, the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the record date for the determination
of shareholders entitled to receive such distribution by a fraction, the
numerator of which shall be the Market Price (as determined pursuant to
Section 7(d)) per share of Common Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive for all purposes) of the
portion of the evidences of indebtedness or assets so to be distributed,
applicable to one share, and the denominator of which shall be such Market
Price per share of Common Stock. Such adjustment shall become effective at
the close of business on such record date.
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(ii) If any capital reorganization of the Company, or
any reclassification of the Common Stock, or any consolidation or
merger of the Company with or into any other person, or any sale,
lease or other transfer of all or substantially all of the assets of
the Company to any other person, shall be effected in such a way that
the holders of the holders of the Common Stock shall be entitled to
receive stock, securities, cash or other property (whether such stock,
securities, cash or other property are issued or distributed by the
Company or any other person) with respect to or in exchange for the
Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, lease or other
transfer, lawful and adequate provision shall be made whereby the
holders of the Warrants shall have the right to acquire and receive
upon exercise of such Warrants such shares of stock, securities, cash
or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger, sale, lease or other
transfer) with respect to or in exchange for such number of
outstanding shares of Common Stock as would have been received upon
exercise of such Warrants had such Warrants been exercised immediately
before such reorganization, reclassification, consolidation, merger,
sale, lease or other transfer, subject to adjustments (as determined
in good faith by the Board of Directors of the Company). Adjustments
for events subsequent to the effective date of such reorganization,
reclassification, consolidation, merger, sale, lease or other transfer
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Agreement. In any such event, effective
provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving person, or in any contract
of sale, merger, conveyance, lease, transfer or otherwise, so that the
provisions set forth herein for the protection of the rights of the
holders of the Warrants shall thereafter continue to be applicable;
and any such resulting or surviving person shall expressly assume the
obligation to deliver, upon exercise of the Warrants, such shares of
stock, securities, cash and other property. The provisions of this
Section 12(b)(ii) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, leases or other
transfers.
(iii) If any capital reorganization of the Company,
reclassification of the Common Stock, consolidation or merger of the
Company with or into any other person, or any sale, lease or other
transfer of all or substantially all of the assets of the Company to
any other person, in each case on or prior to the third anniversary of
the date of this Agreement, shall be effected in such a way that the
holders of the Common Stock shall be entitled to receive consideration
in which cash represents at least ninety-five percent (95%) (as
determined in good faith by the Board of Directors of the Company) of
the total consideration (whether distributed by the Company or any
other person), in exchange for the surrender of their shares of Common
Stock or, in the case of a sale of assets, in exchange for the assets
subject to such sale, which, together with any other consideration
issued or paid, is at least equal, in the aggregate, to the Minimum
Consideration (as determined in good faith by the Board of Directors
of the Company) with respect to or in exchange for the Common Stock or
assets (any such reorganization, reclassification, consolidation,
merger, sale, lease or other transfer, a "Cash Transaction"), then, as
a condition of such Cash Transaction, lawful and adequate provision
shall be made whereby each holder of Warrants shall have the right
(the "Repurchase Right") to require the Company to repurchase such
holder's Warrants, in whole or in part, for the Repurchase Price (as
defined below). Such Repurchase Right
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may be exercised by the holder of Warrants by written notice to the
Company within thirty (30) days of consummation of the Cash
Transaction, and the Company shall cause the applicable Repurchase
Price to be paid to the holder in cash within three (3) business days
of such notice of exercise. In any such event, effective provisions
shall be made in the certificate or articles of incorporation of the
resulting or surviving person, or in any contract of sale, merger,
conveyance, lease, transfer or otherwise, so that the provisions set
forth herein for the protection of the rights of the holders of the
Warrants shall thereafter continue to be applicable; and any such
resulting or surviving person shall expressly assume the obligation to
deliver, upon exercise of the Warrants, the Repurchase Price pursuant
to this Section 12(b)(iii).
(iv) The Company shall notify all holders of
Warrants, in the manner provided in Section 14, of any Cash
Transaction at least thirty (30) days prior to such transaction and of
the Repurchase Right set forth herein arising as a result thereof.
Such notice shall state:
(1) the expected date of the consummation of the
Cash Transaction;
(2) the date by which the Repurchase Right must
be exercised;
(3) the applicable Repurchase Price;
(4) a description of the consideration to be
paid per share of Common Stock in the Cash
Transaction to the holders of Common Stock; and
(5) a description of the procedure which a
holder must follow to exercise its Repurchase Right,
and the place or places where its Warrants are to be
surrendered for payment of the Repurchase Price.
No failure of the Company to give the foregoing notices or
defect therein shall limit any holder's right to exercise a Repurchase Right or
affect the validity of the proceedings for the repurchase of Warrants.
(v) For purposes of Section 12(b)(iii):
(A) "Minimum Consideration" means $625,000,000
less the amount of the Company's indebtedness for borrowed
money and capitalized leases outstanding at the time
immediately prior to the consummation of the Cash Transaction,
determined on a consolidated basis.
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(B) "Repurchase Price" means, with respect to a
Cash Transaction occurring:
(1) during the period commencing on the
date of this Agreement until but not including the
first anniversary thereof, (x) $12,000,000 multiplied
by (y) the quotient obtained by dividing the number
of the Warrants initially issued that remain
outstanding by the total number of Warrants initially
issued;
(2) during the period commencing on the
first anniversary of the date of this Agreement until
but not including the second anniversary thereof, (x)
$6,000,000 multiplied by (y) the quotient obtained by
dividing the number of the Warrants initially issued
that remain outstanding by the total number of
Warrants initially issued; and
(3) during the period commencing on the
second anniversary of the date of this Agreement
until and including the third anniversary thereof,
(x) $3,000,000 multiplied by (y) the quotient
obtained by dividing the number of the Warrants
initially issued that remain outstanding by the total
number of Warrants initially issued.
(vi) The number of shares of Common Stock purchasable
upon the exercise of each Warrant (but not the Exercise Price per
share of Common Stock purchased) shall be adjusted from time to time
by adding to the number of shares of Common Stock purchasable upon the
exercise of each Warrant (as may be adjusted pursuant to the other
provisions of this Agreement) immediately prior to such adjustment,
the quotient determined by dividing the number of Series B Warrant
Shares by 10,000,000. The "number of Series B Warrant Shares" shall be
the sum, without duplication, of that number of shares of Common Stock
(1) issued prior to, or to be issued contemporaneously with, the
exercise of such Warrants hereunder, upon the exercise (including a
deemed exercise or any exercise or exchange by operation of law
pursuant to a Cash Transaction) of the Series B Warrants ("Series B
Warrants") pursuant to that certain Series B Warrant Agreement of the
Company of even date herewith, and (2) if the shares of Common Stock
are listed or admitted to trading on a national securities exchange or
the Nasdaq National Market or any comparable system, issuable upon
exercise of the Series B Warrants (including any successor warrants
received pursuant to such transaction) for which the exercise price
thereof is lower than the Trading Price of the Common Stock or other
securities purchasable upon exercise thereof. For purposes of this
Section 12(b)(vi), "Trading Price" shall mean the average closing
price of a share of Common Stock for the ten consecutive trading days
immediately preceding, but not including, the date of exercise of this
Warrant as reported on the principal national securities exchange, the
Nasdaq National Market or any comparable system on which the shares of
Common Stock are listed or admitted to trading.
(c) No adjustment in the number of Shares purchasable
hereunder shall be required unless such adjustment would require an increase or
decrease of at least one percent (1.0%) in the number of Shares purchasable upon
the exercise of each Warrant;
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provided, however, that any adjustments that by reason of this Section 12(c) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent and to
the nearest one-hundredth of a share, as the case may be.
(d) Except as provided in Section 12(b)(vi), whenever the
number of shares of Common Stock purchasable upon the exercise of any Warrant is
adjusted as herein provided (whether or not the Company then or thereafter
elects to issue additional Warrants in substitution for an adjustment in the
number of Shares as provided in Section 12(f)), the Exercise Price payable upon
exercise of such Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of Shares purchasable upon the exercise of such Warrant
immediately prior to such adjustment, and of which the denominator shall be the
number of Shares so purchasable immediately thereafter.
(e) For the purpose of this Section 12, the term "shares
of Common Stock" shall mean (i) the shares of stock designated as the Common
Stock of the Company at the date of this Agreement, or (ii) any other class of
stock resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value. If at any time, as a result of an adjustment
made pursuant to Section 12(a), the holders of Warrants shall become entitled to
purchase any shares of the Company other than shares of Common Stock, thereafter
the number of such other shares so purchasable upon exercise of each Warrant and
the applicable Exercise Price of such shares shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to such shares contained in Section 12(a) through (d),
inclusive, above, and the provisions contained in this Agreement with respect to
such shares, shall apply on like terms to any such other shares.
(f) The Company may elect, in its sole discretion, on or
after the date of any adjustment required by paragraphs (a) of this Section 12,
to adjust the number of Warrants in substitution for an adjustment in the number
of Shares purchasable upon the exercise of a Warrant. Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be exercisable
for the same number of Shares as immediately prior to such adjustment. Each
Warrant held of record prior to such adjustment of the number of Warrants shall
become that number of Warrants (calculated to the nearest one-hundredth)
obtained by dividing the applicable Exercise Price in effect prior to adjustment
of such Exercise Price by the applicable Exercise Price in effect after
adjustment of such Exercise Price. The Company shall notify the holders of
Warrants of its election to adjust the number of Warrants in the same manner as
provided in the first paragraph of Section 14, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made, and shall give prompt written notice thereof to the Warrant Agent. This
record date may be the date on which the Exercise Price is adjusted or any day
thereafter. Upon each adjustment of the number of Warrants pursuant to this
Section 12(f) the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Warrants on such record date Warrant
Certificates evidencing, subject to Section 13, the additional Warrants to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Warrant Certificates held by such holders
prior
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to the date of adjustment, and upon surrender thereof, if required by the
Company, new Warrant Certificates evidencing all the Warrants to be issued,
executed and registered in the manner specified in Sections 4 and 5 (and which
may bear, at the option of the Company, the applicable adjusted Exercise Price)
and shall be registered in the names of the holders of record of Warrant
Certificates on the record date specified in the notice.
(g) Except as provided in Section 12(a), no adjustment in
respect of any dividends shall be made during the term of a Warrant or upon the
exercise of a Warrant.
(h) Irrespective of any adjustments in an 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. The Company, however, may at any time in its sole
discretion make any change in the form of Warrant Certificate that it may deem
appropriate to give effect to such adjustments and that does not affect the
substance of the Warrant Certificate (including the rights, duties or
obligations of the Warrant Agent), and any Warrant Certificate thereafter
issued, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
SECTION 13. Fractional Shares. Notwithstanding any adjustment
pursuant to Section 12 in the number of Shares purchasable upon the exercise of
a Warrant, the Company shall not be required to issue Warrants to purchase
fractions of Shares, or to issue fractions of Shares upon exercise of the
Warrants, or to distribute certificates which evidence fractional Shares.
SECTION 14. Notices to Warrantholders. Upon any adjustment of
the number of shares of Common Stock purchasable upon exercise of each Warrant,
any Exercise Price or the number of Warrants outstanding including any
adjustment pursuant to Section 12, the Company, within 20 calendar days
thereafter, shall (i) cause to be filed with the Warrant Agent a certificate
signed by the Chairman of the Board, Chief Executive Officer, the President or
any Vice President of the Company setting forth the event giving rise to such
adjustment, such Exercise Price and either the number of Shares purchasable upon
exercise of each Warrant or the additional number of Warrants to be issued for
each previously outstanding Warrant, as the case may be, after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such adjustment was made, 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
holder's address appearing on the Warrant Register, written notice of such
adjustments by first-class mail, postage prepaid. Where appropriate, such 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 14. The Warrant Agent shall be
fully protected in relying in good faith on any such certificate and in making
any adjustment described therein and shall have no duty with respect to, and
shall not be deemed to have knowledge of, any adjustment unless and until it
shall have received such a certificate.
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If:
(a) the Company shall order, declare, make or pay any
dividend payable in any securities upon its shares of Common Stock or make any
distribution (other than a cash dividend) to the holders of its shares of Common
Stock; or
(b) the Company shall offer to the holders of its shares
of Common Stock any additional shares of Common Stock or securities convertible
into shares of Common Stock or any right to subscribe thereto; or
(c) there shall be a dissolution, liquidation or winding
up of the Company (other than in connection with a consolidation, merger or sale
of all or substantially all of its property, assets and business as an
entirety);
then the Company shall (i) cause written notice of such event to be filed with
the Warrant Agent and shall cause written notice of such event to be given to
each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrant Register, by first-class mail, postage prepaid,
and (ii) make a public announcement in a daily newspaper of general circulation
in New York City of such event, and make prompt written notification thereof to
the Warrant Agent, such giving of notice and publication to be completed at
least 10 calendar days (or 20 calendar days in any case specified in clause (c)
above) prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution or subscription rights, or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. The failure to give the notice required
by this Section 14 or any defect therein shall not affect the legality or
validity of any distribution, right, warrant, dissolution, liquidation or
winding up or the vote upon or any other action taken in connection therewith.
SECTION 15. Merger, Consolidation or Change of Name of Warrant
Agent. Any person into which the Warrant Agent may be merged or converted or
with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which the Warrant Agent is a party, or any person
succeeding to the shareholder services business of the Warrant Agent, shall be
the successor to the Warrant Agent hereunder without the execution or filing of
any document or any further act on the part of any of the parties hereto, if
such person would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 17. If any of the Warrant Certificates have been
countersigned but not delivered at the time such successor to the Warrant Agent
succeeds under this Agreement, 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 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 Warrant Agent; and
in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.
If at any time the name of the Warrant Agent is changed and at
such time any of the Warrant Certificates have been countersigned but not
delivered, the Warrant Agent whose name has changed may adopt the
countersignature under its prior name; and if at that time any of
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the Warrant Certificates have not 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
provided in the Warrant Certificates and in this Agreement.
SECTION 16. Warrant Agent. The Warrant Agent undertakes only
the duties and obligations expressly imposed by this Agreement and the Warrant
Certificate, in each case 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 accuracy of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. Except as
otherwise provided herein, the Warrant Agent assumes no responsibility with
respect to the execution, delivery or distribution of the Warrant Certificates.
(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, nor
shall it at any time be under any duty or responsibility to any holder of a
Warrant to make or cause to be made any adjustment in any Exercise Price or in
the number of Shares issuable upon exercise of any Warrant (except as instructed
by the Company), or to determine whether any facts exist that may require any
such adjustments, or with respect to the nature or extent of or method employed
in making any such adjustments when made.
(c) The Warrant Agent may consult at any time with
counsel satisfactory to it (who may also be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company or 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, absent gross negligence, bad faith or willful misconduct
(each as determined by a final order, judgment, ruling or decree of a court of
competent jurisdiction) in the selection and continued retention of such counsel
and the reliance on such counsel's advice.
(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 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 under
this Agreement, to reimburse the Warrant Agent upon demand for all expenses,
taxes and governmental charges and other charges of any kind and nature incurred
by the Warrant Agent in the preparation, administration, delivery, execution and
amendment of this Agreement and the performance of its duties under this
Agreement and to indemnify the Warrant Agent and save it harmless against any
and all losses, liabilities and expenses, including judgments, damages, fines,
penalties, claims, demands,
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settlements, costs and reasonable counsel fees and expenses, for anything done
or omitted by the Warrant Agent arising out of or in connection with this
Agreement except as a result of its gross negligence, bad faith or willful
misconduct (each as determined by a final order, judgment, ruling or decree of a
court of competent jurisdiction). The costs and expenses incurred by the Warrant
Agent in enforcing the right to indemnification shall be paid by the Company
unless it is determined by a final order, judgment, decree or ruling of a court
of competent jurisdiction that the Warrant Agent is not entitled to
indemnification due to its gross negligence, bad faith or willful misconduct.
(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 furnishes the Warrant Agent with reasonable security and
indemnity for any costs or expenses that may be incurred. 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 or judgment shall be for the
ratable benefit of the registered holders of the Warrants, as their respective
rights or interests may appear.
(g) The Warrant Agent, and any stockholder, affiliate,
director, officer or employee thereof, 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 is interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it was not
the Warrant Agent under this Agreement, or a stockholder director, officer or
employee of the Warrant Agent, as the case may be. 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 that it may do or
refrain from doing in connection with this Agreement except in connection with
its own gross negligence, bad faith or willful misconduct (each as determined by
a final order, judgment, decree or ruling of a court of competent jurisdiction).
In no event will the Warrant Agent be liable for special, indirect, incidental,
punitive or consequential loss or damage of any kind whatsoever, even if the
Warrant Agent has been advised of the possibility of such loss or damage. Any
liability of the Warrant Agent under this Agreement to the Company will be
limited to the amount of fees paid by the Company to the Warrant Agent.
(i) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Warrant Agent for the carrying out or performing
of the provisions of this Agreement.
(j) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due and validly authorized execution hereof by the
Warrant Agent) or in respect of the validity or execution of
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any Warrant Certificate (except its due and validly authorized countersignature
thereof), nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of the Shares
to be issued pursuant to this Agreement or any Warrant Certificate or as to
whether the Shares will when issued be validly issued, fully paid and
nonassessable or as to the Exercise Price or the number of Shares issuable upon
exercise of any Warrant.
(k) The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Treasurer, the Secretary or an
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Warrant Agent and the Warrant Agent shall
not be liable for any action taken, suffered to be taken, or omitted to be taken
by it in good faith in accordance with instructions of any such officer or in
good faith reliance upon any statement signed by any one of such officers of the
Company with respect to any fact or matter (unless other evidence in respect
thereof is herein specifically prescribed) which may be deemed to be
conclusively proved and established by such signed statement.
(l) No provision of this Agreement shall require the
Warrant Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(m) If the Warrant Agent shall receive any notice or
demand (other than notice of or demand for exercise of Warrants) addressed to
the Company by the holder of the Warrant Certificates pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
(n) The provisions of this Section 16 shall survive the
termination of this Agreement, the exercise or expiration of the Warrants and
the resignation or removal of the Warrant Agent.
SECTION 17. Change of Warrant Agent. If the Warrant Agent
resigns (such resignation to become effective not earlier than 90 calendar days
after the giving of written notice thereof to the Company and the registered
holders of Warrant Certificates) or shall be adjudged a bankrupt or insolvent,
or shall file a voluntary petition in bankruptcy or make an assignment for the
benefit of its creditors or consent to the appointment of a receiver of all or
any substantial part of its property or affairs or shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
or meet its debts generally as they become due, or if an order of any court
shall be entered approving any petition filed by or against the Warrant Agent
under the provisions of bankruptcy laws or any similar legislation, or if a
receiver, trustee or other similar official of it or of all or any substantial
part of its property shall be appointed, or if any public officer shall take
charge or control of it or of its property or affairs, for the purpose of
rehabilitation, conservation, protection, relief, winding up or liquidation, or
becomes incapable of acting as Warrant Agent or if the Board of Directors of the
Company by resolution removes the Warrant Agent (such removal to become
effective not earlier than 30 calendar days
-20-
after the filing of a certified copy of such resolution with the Warrant Agent
and the giving of written notice of such removal to the registered holders of
Warrant Certificates), the Company shall appoint a successor to the Warrant
Agent. If the Company fails to make such appointment within a period of 60
calendar days after such removal or after it has been so notified in writing of
such resignation or incapacity by the Warrant Agent or by the registered holder
of a Warrant Certificate (in the case of incapacity), then the registered holder
of any Warrant Certificate may apply to any court of competent jurisdiction for
the appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company. Any successor
Warrant Agent, whether appointed by the Company or by such a court, shall be a
bank or trust company, in good standing, incorporated under the laws of any
state or of the United States of America. As soon as practicable after
appointment of the successor Warrant Agent, the Company shall cause written
notice of the change in the Warrant Agent to be given to each of the registered
holders of the Warrant Certificates at such holder's address appearing on the
Warrant Register. After appointment, the successor Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed. The former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder and execute and deliver, at the
expense of the Company, any further assurance, conveyance, act or deed necessary
for the purpose. Failure to give any notice provided for in this Section 17 or
any defect therein, shall not affect the legality or validity of the removal of
the Warrant Agent or the appointment of a successor Warrant Agent, as the case
may be.
SECTION 18. Warrantholder Not Deemed a Stockholder. 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 receive
dividends or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
SECTION 19. 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 any registered holder of any Warrant Certificate to or on the Company
shall be sufficiently given or made if sent by certified mail, return receipt
requested, addressed (until another address is filed in writing by the Company
with the Warrant Agent), or by facsimile transmission with receipt confirmed, as
follows:
AMF Bowling Worldwide, Inc.
0000 XXX Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel and Chief Financial Officer
Facsimile No.: (000) 000-0000
If the Company fails to maintain such office or agency or
fails to give such notice of any change in the location thereof, presentation
may be made and notices and demands may be served at the principal office of the
Warrant Agent.
-21-
Any notice pursuant to this Agreement to be given by the
Company or by any registered holder of any Warrant Certificate to the Warrant
Agent shall be sufficiently given if sent by certified mail, return receipt
requested, addressed (until another address is filed in writing by the Warrant
Agent with the Company), or by facsimile transmission with receipt confirmed, as
follows:
Mellon Investor Services LLC
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
With a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
The Warrant Agent maintains a Warrant Agent Office at:
Mellon Investor Services LLC
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
SECTION 20. Payment of Taxes and Charges. The Company will
from time to time promptly pay to the Warrant Agent, or make provisions
satisfactory to the Warrant Agent for the payment of, all taxes and charges that
may be imposed by the United States or any state upon the Company or the Warrant
Agent in connection with the issuance or delivery of shares of Common Stock upon
the exercise of any Warrants, but any taxes or charges in connection with the
issuance of Warrant Certificates or certificates for shares of Common Stock in
any name other than that of the registered holder of the Warrant Certificate
surrendered shall be paid by such registered holder; and, in such case, the
Company shall not be required to issue or deliver any Warrant Certificate or
certificate for shares of Common Stock until such taxes or charges shall have
been paid or it has been established to the Company's satisfaction that no tax
or charge is due. The Warrant Agent shall have no duty or obligation under this
Section unless and until it is satisfied that all such taxes and/or charges have
been paid.
SECTION 21. Supplements and Amendments.
This Agreement constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and may not
be amended, except in a writing signed by both of them.
-22-
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement (a) without the approval of any holders of
Warrant Certificates in order to cure any ambiguity, manifest error or other
mistake in this Agreement, or to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provision herein, or
to make any other provisions in regard to matters or questions arising hereunder
that the Company and the Warrant Agent may deem necessary or desirable and that
shall not adversely affect, alter or change the interests of the holders of the
Warrants or (b) with the prior written consent of holders of the Warrants
exercisable for a majority of the Shares then issuable upon exercise of the
Warrants then outstanding; provided, however that each amendment or supplement
that decreases the Warrant Agent's rights or increases its duties and
responsibilities hereunder shall also require the prior written consent of the
Warrant Agent.
SECTION 22. 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 23. Termination. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date when all Warrants have been exercised. The provisions of
Section 16, this Section 23, Section 24 and Section 25 shall survive such
termination and the resignation or removal of the Warrant Agent.
SECTION 24. Governing Law Venue and 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 laws of such State,
irrespective of any contrary result otherwise required by applicable conflict or
choice of law rules. Each party hereto consents and submits to the jurisdiction
of the courts of the State of New York and of the federal courts of the Southern
District of New York in connection with any action or proceeding brought against
it that arises out of or in connection with, that is based upon, or that relates
to this Agreement or the transactions contemplated hereby. In connection with
any such action or proceeding in any such court, each party hereto hereby waives
personal service of any summons, complaint or other process and hereby agrees
that service thereof may be made in accordance with the procedures for giving
notice set forth in Section 19 hereof. Each party hereto hereby waives any
objection to jurisdiction or venue in any such court in any such action or
proceeding and agrees not to assert any defense based on lack of jurisdiction or
venue in any such court in any such action or proceeding.
SECTION 25. 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,
and 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 26. Counterparts. This Agreement may be executed in
any number of counterparts and each such counterpart shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
-23-
SECTION 27. Headings. The headings of sections of this
Agreement have been inserted for convenience of reference only, are not to be
considered a part hereof and in no way modify or restrict any of the terms or
provisions hereof.
SECTION 28. Meaning of Terms Used in Agreement. The language
used in this Agreement shall be deemed to be the language chosen by the parties
to express their mutual intent, and no rule of strict construction shall be
applied against any party. Any references to any federal, state, local or
foreign statute or law shall also refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. Unless the context otherwise
requires: (a) a term has the meaning assigned to it by this Agreement; (b) forms
of the word "include" mean that the inclusion is not limited to the items
listed; (c) "or" is disjunctive but not exclusive; (d) words in the singular
include the plural, and in the plural include the singular; (e) provisions apply
to successive events and transactions; (f) "hereof", "hereunder", "herein" and
"hereto" refer to the entire Agreement and not any section or subsection; (g)
"$" means the currency of the United States; (h) "business day" means any day,
except for Saturday and Sunday, on which banks are not required or authorized by
law or executive order to close in New York City; and (i) "person" means a
natural person, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or other entity, or a governmental entity or any department, agency
or political subdivision thereof.
SECTION 29. Severability. If any part of this Agreement shall
be held to be invalid or unenforceable by any court, or regulatory agency or
body, such invalidity or unenforceability shall attach only to such part and
shall not affect the validity or enforceability of the rest of this Agreement.
Furthermore, in lieu of any such invalid or unenforceable provision or
condition, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms and commercial effect to such invalid
or unenforceable provision as may be possible and be valid and enforceable.
[The next page is the signature page]
-24-
IN WITNESS WHEREOF, the parties hereto have caused this Series
A Warrant Agreement to be executed and delivered as of the day and year first
above written.
AMF BOWLING WORLDWIDE, INC.
By:____________________________
Name:
Title:
MELLON INVESTOR SERVICES LLC
By:____________________________
Name:
Title:
-25-
EXHIBIT A
[FORM OF FACE OF SERIES A WARRANT CERTIFICATE]
VOID AFTER MARCH 9, 2009
This Global Warrant Certificate is held by The Depositary Trust Company (the
"Depositary") 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) this Global Warrant Certificate may be exchanged in whole but not in
part pursuant to Section 6(a) of the Warrant Agreement, (ii) this Global Warrant
Certificate may be delivered to the Warrant Agent for cancellation pursuant to
Section 6(i) of the Warrant Agreement and (iii) this Global Warrant Certificate
may be transferred to a successor Depositary with the prior written consent of
the Company./(1)/
Unless this Global Warrant Certificate is presented by an authorized
representative of the Depositary to the Company or the Warrant Agent for
registration of transfer, exchange or payment and any certificate issued is
registered in the name of Cede & Co. or such other entity as is requested by an
authorized representative of the Depositary (and any payment hereon is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of the Depositary), any transfer, pledge or other use hereof for
value or otherwise by or to any person is wrongful because the registered owner
hereof, Cede & Co., has an interest herein./(1)/
Transfers of this Global Warrant Certificate shall be limited to transfers in
whole, but not in part, to nominees of the Depositary or to a successor thereof
or such successor's nominee, and transfers of portions of this Global Warrant
Certificate shall be limited to transfers made in accordance with the
restrictions set forth in Section 6 of the Warrant Agreement./(1)/
No registration or transfer of the securities issuable pursuant to the Warrant
will be recorded on the books of the Company until such provisions have been
complied with.
----------
/(1)/ These paragraphs are to be included only if the Warrant is in the form of
Global Warrant Certificate.
A-1
CUSIP No. 030985 11 3
No. _____ WARRANT TO PURCHASE _____________
SHARES OF COMMON STOCK
AMF BOWLING WORLDWIDE, INC.
WARRANT TO PURCHASE COMMON STOCK
This Series A Warrant Certificate ("Warrant Certificate")
certifies that _______________ or its registered assigns, is the registered
holder of a Warrant (the "Warrant") of AMF Bowling Worldwide, Inc., a Delaware
corporation (the "Company"), to purchase the number of shares (the "Shares") of
Common Stock, par value $0.01 per share (the "Common Stock"), of the Company set
forth above. This Warrant expires on March 9, 2009, (such date, the "Expiration
Date") and entitles the holder to purchase from the Company the number of fully
paid and nonassessable Shares set forth above at the exercise price (the
"Exercise Price") multiplied by the number of Shares set forth above (the
"Exercise Amount"), payable to the Company (i) by wire transfer in immediately
available funds of the Exercise Amount to an account of the Warrant Agent
specified in writing by the Warrant Agent for such purpose, no later than 5:00
p.m., New York City time, on the business day immediately prior to the
Settlement Date (as defined in the Warrant Agreement), (ii) by surrender to the
Warrant Agent through the facilities of the Depositary for cancellation of
shares of Common Stock newly acquired upon exercise of the Warrant, valued at
the Market Price (as defined in the Warrant Agreement) equal to the Exercise
Amount or (iii) by a combination of the methods described in clauses (i) and
(ii) above. The initial Exercise Price shall be $21.19.
Subject to the terms and conditions set forth herein and in
the Warrant Agreement, this Warrant may be exercised by the Holder thereof, by:
(i) providing written notice of such election
("Warrant Exercise Notice") to exercise the Warrant to the Warrant
Agent at the address set forth in the Warrant Agreement, "Re: AMF
Bowling Worldwide, Inc. Warrant Exercise", by hand or by facsimile, no
later than 5:00 p.m., New York City time, on the Expiration Date,
which Warrant Exercise Notice shall be in the form of an election to
purchase Shares of Common Stock of the Company substantially in the
form set forth either (x) in Exhibit B-1 to the Warrant Agreement,
properly completed and executed by the Holder; provided that such
written notice may only be submitted by persons who hold Definitive
Warrant Certificates, or (y) in Exhibit B-2 to the Warrant Agreement,
properly completed and executed by the Holder; provided that such
written notice may only be submitted with respect to Warrants held
through the book-entry facilities of the Depositary, by or through
persons that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m.,
New York City time, on the business day immediately prior to the
Settlement Date, such Warrants to the Warrant Agent by book-entry
transfer through the facilities of the Depositary or (y) no later than
5:00 p.m., New York City time, on the business day immediately prior
to the Settlement Date, the Warrant Certificates evidencing such
Warrants to the Warrant Agent
A-2
if Definitive Warrant Certificates have been issued and delivered
pursuant to the Warrant Agreement; and
(iii) paying the applicable Exercise Amount, together
with any applicable taxes and governmental charges.
The Exercise Price and the number of shares of Common Stock
purchasable upon exercise of this Warrant are subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement.
No Warrant may be exercised prior to the Initial Distribution
Date or after the Expiration Date. After the Expiration Date, the Warrants will
become wholly void and of no value.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
WARRANT CERTIFICATE SET FORTH ON THE REVERSE HEREOF. 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.
A-3
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed by its duly authorized officer.
Dated: ________________
AMF BOWLING WORLDWIDE, INC.
By:___________________________
Name:
Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
as Warrant Agent
By:_____________________
Name:
Title:
A-4
[FORM OF REVERSE OF SERIES A WARRANT CERTIFICATE]
AMF BOWLING WORLDWIDE, INC.
The Warrant evidenced by this Warrant Certificate is a part of
a duly authorized issue of Warrants to purchase a maximum of 1,764,706 shares of
Common Stock issued pursuant to that certain Series A Warrant Agreement, dated
as of March 8, 2002 (the "Warrant Agreement"), duly executed and delivered by
the Company and Mellon Investor Services LLC, as Warrant Agent (the "Warrant
Agent"). The Warrant Agreement hereby is 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 inspected at the Warrant Agent Office and is
available upon written request addressed to the Company. All capitalized terms
used herein but not defined that are defined in the Warrant Agreement shall have
the meanings assigned to them therein.
Warrants may be exercised to purchase Shares from the Company
from the Initial Distribution Date through 5:00 p.m. New York City time on the
Expiration Date, at the Exercise Price set forth on the face hereof, subject to
adjustment as described in the Warrant Agreement. Subject to the terms and
conditions set forth herein and in the Warrant Agreement, the Holder of the
Warrant evidenced by this Warrant Certificate may exercise such Warrant by:
(i) providing a Warrant Exercise Notice to the
Warrant Agent at the address set forth in the Warrant Agreement, "Re:
AMF Bowling Worldwide, Inc. Warrant Exercise", by hand or by
facsimile, no later than 5:00 p.m., New York City time, on the
Expiration Date, which Warrant Exercise Notice shall be in the form of
an election to purchase Shares of Common Stock of the Company
substantially in the form set forth either (x) in Exhibit B-1 to the
Warrant Agreement, properly completed and executed by the Holder;
provided that such written notice may only be submitted by persons who
hold Definitive Warrant Certificates, or (y) in Exhibit B-2 to the
Warrant Agreement, properly completed and executed by the Holder;
provided that such written notice may only be submitted with respect
to Warrants held through the book-entry facilities of the Depositary,
by or through persons that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m.,
New York City time, on the business day immediately prior to the
Settlement Date, such Warrants to the Warrant Agent by book-entry
transfer through the facilities of the Depositary or (y) no later than
5:00 p.m., New York City time, on the business day immediately prior
to the Settlement Date, the Warrant Certificates evidencing such
Warrants to the Warrant Agent if Definitive Warrant Certificates have
been issued and delivered pursuant to Section 3; and
(iii) paying the applicable Exercise Amount, together
with any applicable taxes and governmental charges.
A-1-R
The Exercise Amount shall be payable (i) by wire transfer in immediately
available funds of the Exercise Amount to an account of the Warrant Agent
specified in writing by the Warrant Agent for such purpose, no later than 5:00
p.m., New York City time, on the business day immediately prior to the
Settlement Date, (ii) by surrender to the Warrant Agent through the facilities
of the Depositary for cancellation of shares of Common Stock newly acquired upon
exercise of the Warrant, valued at the Market Price (as defined in the Warrant
Agreement) equal to the Exercise Amount or (iii) by a combination of the methods
described in clauses (i) and (ii) above. The initial Exercise Price shall be
$21.19.
In the event that upon any exercise of the Warrant evidenced
hereby the number of Shares actually purchased shall be less than the total
number of Shares purchasable upon exercise of the Warrant evidenced hereby,
there shall be issued to the holder hereof, or such holder's assignee, a new
Warrant Certificate evidencing a Warrant to purchase the Shares not so
purchased. No adjustment shall be made for any cash dividends on any Shares
issuable upon exercise of this Warrant. After the Expiration Date, unexercised
Warrants shall become wholly void and of no value.
The Company shall not be required to issue fractions of Shares
or any certificates that evidence fractional Shares.
Warrant Certificates, when surrendered at the Warrant Agent
Office by the registered holder thereof in person or by a legal representative
or attorney duly authorized in writing, by mail or by book-entry delivery
through the facilities of the Depositary 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 a Warrant to purchase in the aggregate a
like number of Shares.
No Warrants may be sold, exchanged or otherwise transferred in
violation of the Securities Act or state securities laws. The Company or the
Warrant Agent may require that, as a condition to any sale, exchange or transfer
of a Warrant that the holder deliver to the Company and the Warrant Agent an
opinion of counsel, which opinion of counsel shall be reasonably satisfactory to
the Company, to the effect that such sale, exchange or transfer is made in
compliance with the Securities Act and all applicable state securities laws or
pursuant to an exempt transaction under the Securities Act and such state
securities laws. The provisions of this paragraph shall not apply to the
exercise of any Warrant to the extent that the Shares issued upon such exercise
(and any unexercised portion of the Warrant so exercised) shall be issued to the
same registered holder that exercised such Warrant.
The Company and Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to the
contrary.
[Balance of page intentionally remains blank]
A-2-R
EXHIBIT B-1
[FORM OF ELECTION TO EXERCISE FOR WARRANT HOLDERS
HOLDING WARANTS IN FORM OF DEFINITIVE WARRANT
CERTIFICATES WHEN WARRANT CERTIFICATES WILL BE
PHYSICALLY DELIVERED IN CONNECTION WITH THE
WARRANT EXERCISE]
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase ____ newly issued
shares of Common Stock of AMF Bowling Worldwide, Inc. (the "Company") at the
Exercise Price of $____ per share. The undersigned represents, warrants and
promises that it has the full power and authority to exercise and deliver the
Warrants exercised hereby.
The undersigned represents, warrants and promises that it has
delivered or will deliver in payment for such Shares $__________ [select one of
the following] [(i) by wire transfer in immediately available funds of the
Exercise Amount to an account of the Warrant Agent specified in writing by the
Warrant Agent for such purpose, no later than 5:00 p.m., New York City time, on
the business day immediately prior to the Settlement Date], [(ii) by surrender
to the Warrant Agent for cancellation of shares of Common Stock newly acquired
upon exercise of the Warrant, valued at the Market Price (as defined in the
Warrant Agreement) equal to the Exercise Amount] or [(iii) by a combination of
the methods described in clauses (i) and (ii) above, in accordance with the
terms hereof]:
The undersigned requests that a certificate representing the Shares be
registered and delivered as follows:
------------------------------------
Name
------------------------------------
Address
------------------------------------
Delivery Address (if different)
B-1-1
If such number of Shares is less than the aggregate number of Shares purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the balance of such Shares shall be registered and delivered as follows:
------------------------------------
Name
------------------------------------
Address
------------------------------------
Delivery Address (if different)
--------------------------------- ------------------------------------
Social Security or Other Taxpayer Signature
Identification Number of Holder
Note: The above signature must
correspond with the name as written
upon the face of this Warrant
Certificate in every particular,
without alteration or enlargement or
any change whatsoever. If the
certificate representing the Shares
or any Warrant Certificate
representing Warrants not exercised
is to be registered in a name other
than that in which this Warrant
Certificate is registered, the
signature of the holder hereof must
be guaranteed.
SIGNATURE GUARANTEED:
---------------------------------
X-0-0
XXXXXXX X-0
[FORM OF ELECTION TO EXERCISE WARRANT FOR
HOLDERS HOLDING WARRANTS THROUGH BOOK-ENTRY
FACILITIES OF THE DEPOSITORY TRUST COMPANY
WHEN EXERCISE OF WARRANT WILL OCCUR THROUGH
SUCH FACILITIES]
[TO BE COMPLETED BY DIRECT PARTICIPANT IN THE DEPOSITORY TRUST COMPANY]
AMF Bowling Worldwide, Inc.
Warrants to Purchase _____ Shares of Common Stock
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the
right, represented by ______ Warrants held for its benefit through the
book-entry facilities of The Depository Trust Company (the "Depositary"), to
purchase ____ newly issued shares of Common Stock of AMF Bowling Worldwide, Inc.
(the "Company") at the Exercise Price of $____ per share.
The undersigned represents, warrants and promises that (1) it
has delivered or will deliver no later than 5:00 p.m., New York time, on two
business days after the date on which this Warrant Exercise Notice is delivered
the number of Warrants specified below to the Warrant Agent's account at the
Depositary by book-entry transfer; (2) it has the full power and authority to
exercise and deliver the Warrants exercised hereby; and (3) it has delivered the
exercise price of U.S. $___ for each Warrant exercised hereby, [(i) by wire
transfer in immediately available funds of the Exercise Amount to an account of
the Warrant Agent specified in writing by the Warrant Agent for such purpose, no
later than 5:00 p.m., New York City time, on the business day immediately prior
to the Settlement Date], [(ii) by surrender to the Warrant Agent through the
facilities of the Depositary for cancellation of shares of Common Stock newly
acquired upon exercise of the Warrant, valued at the Market Price (as defined in
the Warrant Agreement) equal to the Exercise Amount] or [(iii) by a combination
of the methods described in clauses (i) and (ii) above, in accordance with the
terms hereof]
The undersigned requests that the principal amount of Warrants
exercised hereby be in registered form in the authorized denominations,
registered in such names and delivered, all as specified in accordance with the
instructions set forth below; provided, that if the shares of Common Stock are
evidenced by global securities, the shares of Common Stock shall be registered
in the name of the Depositary or its nominee.
B-2-1
Dated: _______________
NOTE: THIS EXERCISE NOTICE MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. THE WARRANT AGENT SHALL NOTIFY
YOU (THROUGH THE CLEARING SYSTEM) OF (1) THE WARRANT AGENT'S ACCOUNT AT THE
DEPOSITARY TO WHICH YOU MUST DELIVER YOUR WARRANTS ON THE EXERCISE DATE AND (2)
THE ADDRESS, PHONE NUMBER AND FACSIMILE NUMBER WHERE YOU CAN CONTACT THE WARRANT
AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED.
NAME OF DIRECT PARTICIPANT IN THE DEPOSITARY:
-----------------------------------------------------
(PLEASE PRINT)
ADDRESS:
--------------------------------------------
----------------------------------------------------
CONTACT NAME:
----------------------------------------
ADDRESS:
---------------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
------------
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
-------------------------------------
ACCOUNT FROM WHICH WARRANTS ARE BEING DELIVERED:
DEPOSITARY ACCOUNT NO.
-------------------------------
WARRANT EXERCISE NOTICES WILL ONLY BE VALID IF DELIVERED IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH IN THIS NOTIFICATION (OR AS OTHERWISE DIRECTED), MARKED
TO THE ATTENTION OF "AMF BOWLING WORLDWIDE, INC. WARRANT EXERCISE".
WARRANT HOLDER DELIVERING WARRANTS, IF OTHER THAN THE DIRECT DTC PARTICIPANT
DELIVERING THIS WARRANT EXERCISE NOTICE
NAME:
------------------------------------------------
(PLEASE PRINT)
CONTACT NAME:
----------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
------------
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
----------------------------------------------------
ACCOUNT TO WHICH THE SHARES OF COMMON STOCK ARE TO
BE CREDITED:
DEPOSITARY ACCOUNT NO.
-------------------------------
B-2-2
FILL IN FOR DELIVERY OF THE COMMON STOCK, IF OTHER THAN
TO THE PERSON DELIVERING THIS WARRANT EXERCISE NOTICE:
NAME:
------------------------------------------------
(PLEASE PRINT)
ADDRESS:
---------------------------------------------
-----------------------------------------------------
CONTACT NAME:
----------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
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NUMBER OF WARRANTS BEING EXERCISED:
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(ONLY ONE EXERCISE PER WARRANT EXERCISE NOTICE)
Signature:
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Name:
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Capacity in which Signing:
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Signature Guaranteed:
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B-2-3
EXHIBIT C
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, the undersigned registered holder hereby sells,
assigns and transfers unto
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Name of Assignee
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Address of Assignee
this Warrant Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint _________________ attorney, to
transfer the within Warrant Certificate to purchase _________ shares of Common
Stock to which the Warrant Certificate relates on the books of the Warrant
Agent, with full power of substitution.
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Dated Signature
Note: The above signature must
correspond with the name as written
upon the face of this Warrant
Certificate in every particular,
without alteration or enlargement or
any change whatsoever.
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Social Security or Other Taxpayer
Identification Number of Assignee
SIGNATURE GUARANTEED:
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C-1