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EXHIBIT 10.7
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WARRANT AGREEMENT
Dated as of October 16, 1997
Between
PACKAGED ICE, INC.
and
U.S. TRUST COMPANY OF TEXAS, N.A.
as Warrant Agent
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Warrants to Purchase Shares of Common Stock
Par Value $.01 Per Share
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TABLE OF CONTENTS
Page
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Form of Warrant Certificates . . . . . . . . . . . . . . . . . 1
SECTION 1.03. Execution of Warrant Certificates . . . . . . . . . . . . . . . 2
SECTION 1.04. Authentication and Delivery . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Temporary Warrant Certificates . . . . . . . . . . . . . . . . 3
SECTION 1.06. Separation of Warrants and Notes . . . . . . . . . . . . . . . 3
SECTION 1.07. Registration . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.08. Registration of Transfers and Exchanges . . . . . . . . . . . . 4
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.10. Offices for Exercise, etc. . . . . . . . . . . . . . . . . . . 11
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
SECTION 2.01. Duration of Warrants . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.02. Exercise, Exercise Price, Settlement and
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.03. Cancellation of Warrant Certificates . . . . . . . . . . . . . 13
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Price and Number of
Shares Issuable . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.02. Fractional Interest . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.03. When Adjustment Not Required . . . . . . . . . . . . . . . . . 18
SECTION 5.04. Challenge to Good Faith Determination . . . . . . . . . . . . . 18
SECTION 5.05. Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.06. Notices to Warrant Holders . . . . . . . . . . . . . . . . . . 19
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.02. Conditions of Warrant Agent's Obligations . . . . . . . . . . . 20
SECTION 6.03. Resignation and Appointment of Successor . . . . . . . . . . . 23
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.02. Notices and Demands to the Company and Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.03. Addresses for Notices to Parties and for
Transfer of Documents . . . . . . . . . . . . . . . . . . . 25
SECTION 7.04. Notices to Holders . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.05. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.06. Obtaining of Governmental Approvals . . . . . . . . . . . . . . 26
SECTION 7.07. Persons Having Rights Under Agreement . . . . . . . . . . . . . 26
SECTION 7.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.09. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.10. Inspection of Agreement . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 27
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Certificate To Be Delivered upon Exchange or Registration of
Transfer of Warrants
EXHIBIT C - Transferee Letter of Representation
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INDEX OF DEFINED TERMS
Defined Term Section
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Agreement . . . . . . . . . . . . . . . . . . . . . . Recitals
Business Day . . . . . . . . . . . . . . . . . . . . . 2.01
Common Stock . . . . . . . . . . . . . . . . . . . . . 1.01
Company . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Convertible Securities . . . . . . . . . . . . . . . . 5.01(c)
Definitive Warrants . . . . . . . . . . . . . . . . . . 1.02
Distribution . . . . . . . . . . . . . . . . . . . . . 5.02(c)
Effective Date . . . . . . . . . . . . . . . . . . . . Recitals
Election to Exercise . . . . . . . . . . . . . . . . . 2.02(b)
Exercisability Date . . . . . . . . . . . . . . . . . . 2.02(a)
Exercise Date . . . . . . . . . . . . . . . . . . . . 2.02(d)
Expiration Date . . . . . . . . . . . . . . . . . . . . 2.01
Global Warrants . . . . . . . . . . . . . . . . . . . . 1.02
Indenture . . . . . . . . . . . . . . . . . . . . . . . Recitals
Initial Purchasers . . . . . . . . . . . . . . . . . . Recitals
Majority Holders . . . . . . . . . . . . . . . . . . . 5.04
Notes . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Prospectus . . . . . . . . . . . . . . . . . . . . . . 4.02
Purchase Shares . . . . . . . . . . . . . . . . . . . . 5.01(e)
Registrar . . . . . . . . . . . . . . . . . . . . . . . 1.07
Related Parties . . . . . . . . . . . . . . . . . . . . 6.02(e)
Resale Restriction Termination Date . . . . . . . . . . 1.08
Securities Act . . . . . . . . . . . . . . . . . . . . 1.06
Shares . . . . . . . . . . . . . . . . . . . . . . . . 1.01
Time of Determination . . . . . . . . . . . . . . . . . 5.01(g)
Trustee . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Units . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Warrant Agent . . . . . . . . . . . . . . . . . . . . . 6.01
Warrant Agent Office . . . . . . . . . . . . . . . . . 1.10
Warrant Certificates . . . . . . . . . . . . . . . . . Recitals
Warrant Exercise Office . . . . . . . . . . . . . . . . 2.02(b)
Warrant Register . . . . . . . . . . . . . . . . . . . 1.07
Warrants . . . . . . . . . . . . . . . . . . . . . . . Recitals
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WARRANT AGREEMENT
WARRANT AGREEMENT ("Agreement"), dated as of October 16, 1997 (the
"Effective Date") by Packaged Ice, Inc., a Texas corporation (together with any
successor thereto, the "Company"), and U.S. Trust Company of Texas, N.A., a
national banking association, as warrant agent (with any successor Warrant
Agent, the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement dated
October 16, 1997 with ▇▇▇▇▇▇▇▇▇ & Company, Inc. (the "Initial Purchaser") in
which the Company has agreed, among other things, to sell to the Initial
Purchaser (A) 25,000 units (the "Units") consisting in the aggregate of (i)
$25,000,000 aggregate principal amount of 12% Series C Senior Notes due April
15, 2004 (the "Notes") of the Company to be issued under an indenture dated as
of October 16, 1997 (the "Indenture"), among the Company, the Subsidiary
Guarantors named therein and U.S. Trust Company of Texas, N.A., as trustee (the
"Trustee"), and (ii) 25,000 Warrants to purchase an aggregate of 255,943 of
shares of common stock, $.01 par value per share (the "Common Stock"), of the
Company (the "Warrants"), and the certificates evidencing the Warrants being
hereinafter referred to as "Warrant Certificates"), in each case subject to
adjustment in accordance with the terms hereof; and
WHEREAS, the Warrants and the Notes comprising part of the Units shall
be separately transferable immediately; and
WHEREAS, the Company desires the Warrant Agent as warrant agent to
assist the Company in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants, and in this Agreement wishes to set
forth, among other things, the terms and conditions on which the Warrants may
be issued, exchanged, canceled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Each Warrant Certificate shall
evidence the number of Warrants specified therein, each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase from the Company (and the Company shall issue and sell
to such holder of the Warrant) 10.2377 fully paid and non-assessable shares of
the Company's Common Stock (the shares of Common Stock purchasable upon
exercise of a Warrant being hereinafter referred to as the "Shares" and, where
appropriate, such term shall also mean the other securities or property
purchasable and deliverable upon exercise of a Warrant as provided in Article
V) at the price specified herein and therein, in each case subject to
adjustment as provided herein and therein.
SECTION 1.02. Form of Warrant Certificates. Warrant Certificates
representing Warrants offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Warrants (the "Global
Warrants"), substantially in the form of Exhibit A hereto (including footnote 1
thereto). Warrants offered and sold in reliance on any other exemption from
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registration under the Securities Act other than as described in the preceding
sentence shall be issued in the form of definitive Warrant Certificates (the
"Definitive Warrants"). The Warrant Certificates evidencing the Global Warrants
or the Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto. Such Global
Warrants shall represent such of the outstanding Warrants as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of outstanding
Warrants represented thereby shall be made by the Warrant Agent and Depositary
(as defined below) in accordance with instructions given by the holder thereof.
The Depository Trust Company shall act as the Depositary with respect to the
Global Warrants until a successor shall be appointed by the Company. Upon
written request, a Warrant holder may receive from the Warrant Agent Definitive
Warrants as set forth in Section 1.08 hereof.
SECTION 1.03. Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary, under its corporate seal. Such signatures may
be the manual or facsimile signatures of the present or any future such
officers. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Warrant Certificate that has been duly countersigned and
delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the immediately
following paragraph, Warrant Certificates shall be authenticated by manual
signature and dated the date of authentication by the Warrant Agent and shall
not be valid for any purpose unless so authenticated and dated. The Warrant
Certificates shall be numbered and shall be registered in the Warrant Register
(as defined in Section 1.07 hereof).
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed by the chairman of its Board of Directors,
its president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be authenticated,
whether the Warrants are to be Global Warrants or Definitive Warrants, the date
of such Warrants and such other information as the Warrant Agent may reasonably
request, without any further action by the Company, the Warrant Agent is
authorized, upon receipt from the Company at any time and
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from time to time of the Warrant Certificates, duly executed as provided in
Section 1.03 hereof, to authenticate the Warrant Certificates and deliver them.
Such authentication shall be by a duly authorized signatory of the Warrant
Agent (although it shall not be necessary for the same signatory to sign all
Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who authenticated such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
authenticated on behalf of the Warrant Agent by such persons as, at the actual
time of authentication of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates shall
be in substantially the form set forth in Exhibit A hereto.
SECTION 1.05. Temporary Warrant Certificates. Pending the preparation
of definitive Warrant Certificates, the Company may execute, and, upon receipt
of an authentication order in accordance with Section 1.04 hereof, the Warrant
Agent shall authenticate and deliver, temporary Warrant Certificates, which are
printed, lithographed, typewritten or otherwise produced, substantially of the
tenor of the definitive Warrant Certificates in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Warrant Certificates may determine,
as evidenced by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be
without charge to the holder. Upon surrender for cancellation of any one or
more temporary Warrant Certificates, the Company shall execute, and, upon
receipt of an authentication order in accordance with Section 1.04 hereof, the
Warrant Agent shall authenticate and deliver in exchange therefor, one or more
definitive Warrant Certificates representing in the aggregate a like number of
Warrants. Until so exchanged, the holder of a temporary Warrant Certificate
shall in all respects be entitled to the same benefits under this Agreement as
a holder of a definitive Warrant Certificate.
SECTION 1.06. Separation of Warrants and Notes. The Notes and Warrants
will be separately transferable immediately.
SECTION 1.07. Registration. The Company will keep, at the office or
agency maintained by the Company for such purpose, a register or registers in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of, and registration
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of transfer and exchange of, Warrants as provided in this Article. Each person
designated by the Company from time to time as a person authorized to register
the transfer and exchange of the Warrants is hereinafter called, individually
and collectively, the "Registrar". The Company hereby initially appoints the
Warrant Agent as Registrar. Upon written notice to the Warrant Agent and any
acting Registrar, the Company may appoint a successor Registrar for such
purposes.
The Company will at all times designate one person (who may be the
Company and who need not be a Registrar) to act as repository of a master list
of names and addresses of the holders of Warrants (the "Warrant Register"). The
Warrant Agent will act as such repository unless and until some other person
is, by written notice from the Company to the Warrant Agent and the Registrar,
designated by the Company to act as such. The Company shall cause each
Registrar to furnish to such repository, on a current basis, such information
as to all registrations of transfer and exchanges effected by such Registrar,
as may be necessary to enable such repository to maintain the Warrant Register
on as current a basis as is practicable.
SECTION 1.08. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When Definitive
Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants;
or
(ii) to exchange such Definitive Warrants for an equal
number of Definitive Warrants,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.08 hereof for such transactions are met; provided, however, that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Company and the Warrant Agent, duly executed by the
holder thereof or by his attorney, duly authorized in
writing; and
(y) in the case of Warrants the offer and sale of which
have not been registered under the Securities Act and
are presented for transfer or exchange prior to (x)
the date which is three years after the later of the
date of original issue and the last date on which the
Company or any affiliate of the Company was the owner
of such Warrant, or any predecessor thereto and (y)
such later date, if any, as may be required by any
subsequent change in applicable law (the "Resale
Restriction Termination Date"), such Warrants shall
be accompanied, in the sole discretion of the
Company, by the following additional information and
documents, as applicable:
(A) if such Warrant is being delivered to the
Warrant Agent by a holder for registration in
the name of such holder, without transfer, a
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certification from such holder to that effect
(in substantially the form of Exhibit B
hereto); or
(B) if such Warrant is being transferred to a
qualified institutional buyer (as defined in
Rule 144A under the Securities Act) in
accordance with Rule 144A under the
Securities Act or pursuant to an exemption
from registration in accordance with Rule 144
or Regulation S under the Securities Act, a
certification to that effect (in
substantially the form of Exhibit B hereto);
or
(C) if such Warrant is being transferred to an
institutional "accredited investor" within
the meaning of subparagraphs (a)(l), (a)(2),
(a)(3) or (a)(7) of Rule 501 under the
Securities Act, delivery of a Certificate of
Transfer in the form of Exhibit C hereto and
an opinion of counsel and/or other
information satisfactory to the Company to
the effect that such transfer is in
compliance with the Securities Act; or
(D) if such Warrant is being transferred in
reliance on another exemption from the
registration requirements of the Securities
Act, a certification to that effect (in
substantially the form of Exhibit B hereto)
and an opinion of counsel reasonably
acceptable to the Company to the effect that
such transfer is in compliance with the
Securities Act.
(b) Restrictions on Transfer of a Definitive Warrant for a
Beneficial Interest in a Global Warrant. A Definitive Warrant may not be
transferred for a beneficial interest in a Global Warrant except upon
satisfaction of the requirements set forth below. Upon receipt by the Warrant
Agent of a Definitive Warrant, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Warrant Agent, together
with:
(A) certification, substantially in the form of Exhibit B hereto,
that such Definitive Warrant is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act; and
(B) written instructions directing the Warrant Agent to make, or
to direct the Depositary to make, an endorsement on the Global
Warrant to reflect an increase in the aggregate amount of the
Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause,
or direct the Depositary to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Warrant Agent, the number of Warrants represented by the Global
Warrant to be increased accordingly. If no Global Warrant is then
outstanding, the Company shall issue and the Warrant Agent shall
authenticate a new Global Warrant in the appropriate amount.
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(c) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Section 1.08 and the procedures
of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Warrant for a
Definitive Warrant.
(i) Any person having a beneficial interest in a Global
Warrant may upon request transfer such beneficial
interest for a Definitive Warrant. Upon receipt by
the Warrant Agent of written instructions or such
other form of instructions as is customary for the
Depositary from the Depositary or its nominee on
behalf of any person having a beneficial interest in
a Global Warrant and upon receipt by the Warrant
Agent of a written order or such other form of
instructions as is customary for the Depositary or
the person designated by the Depositary as having
such a beneficial interest containing registration
instructions and, in the case of any such transfer or
exchange prior to the Resale Restriction Termination
Date, the following additional information and
documents:
(A) if such beneficial interest is being
transferred to the person designated by the
Depositary as being the beneficial owner, a
certification from such person to that effect
(in substantially the form of Exhibit B
hereto); or
(B) if such beneficial interest is being
transferred to a qualified institutional
buyer (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance
with Rule 144 or Regulation S under the
Securities Act, a certification to that
effect from the transferee or transferor (in
substantially the form of Exhibit B hereto);
or
(C) if such beneficial interest is being
transferred to an institutional "accredited
investor" within the meaning of subparagraphs
(a)(l), (a)(2), (a)(3) or (a)(7) of Rule 501
under the Securities Act, delivery of a
Certificate of Transfer in the form of
Exhibit C hereto and an opinion of counsel
and/or other information satisfactory to the
Company to the effect that such transfer is
in compliance with the Securities Act; or
(D) if such beneficial interest is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that
effect (in substantially the form of Exhibit
B hereto) and an opinion of counsel
reasonably acceptable to the Company to the
effect that such transfer is in compliance
with the Securities Act,
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then the Warrant Agent will cause, in accordance with
the standing instructions and procedures existing
between the Depositary and the Warrant Agent, the
aggregate amount of the Global Warrant to be reduced
and, following such reduction, the Company will
execute and, upon receipt of an authentication order
in the form of an Officers' Certificate (as defined),
the Warrant Agent will authenticate and deliver to
the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a
beneficial interest in a Global Warrant pursuant to
this Section 1.08(d) shall be registered in such
names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct
the Warrant Agent in writing. The Warrant Agent shall
deliver such Definitive Warrants to the persons in
whose names such Warrants are so registered.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Warrants notifies the Company
that the Depositary is unwilling or unable to
continue as Depositary for the Global Warrant and a
successor Depositary for the Global Warrant is not
appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Warrant Agent in writing that it elects to cause the
issuance of Definitive Warrants under this Warrant
Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate signed by two officers of the Company (one of whom must
be the principal executive officer, principal financial officer or principal
accounting officer) (an "Officers' Certificate") requesting the authentication
and delivery of Definitive Warrants, will authenticate and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of warrants
represented by the Global Warrant, in exchange for such Global Warrant.
(g) Legends.
(i) Except to the extent permitted by the following
paragraph (ii), each Warrant Certificate evidencing
the Global Warrants and the Definitive Warrants (and
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all Warrants issued in exchange therefor or
substitution thereof) shall bear a legend
substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" ( AS DEFINED IN RULE 501 (A)(l), (2), (3) OR (7)
PROMULGATED UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
PACKAGED ICE, INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE WARRANT AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 PROMULGATED UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
PROMULGATED UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON
TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE WARRANT AGENT AND THE
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COMPANY SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A SECURITYHOLDERS' AND REGISTRATION RIGHTS AGREEMENT DATED AS
OF OCTOBER 16, 1997 AMONG ▇▇▇▇▇▇▇▇▇ & COMPANY, INC. AND THE
COMPANY, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
To the extent a Warrant Certificate evidences a
Global Warrant, such Warrant Certificate shall also
bear the legend with respect thereto substantially in
the form set forth on Exhibit A hereto.
(ii) Upon any sale or transfer of a Warrant pursuant to
Rule 144 under the Securities Act in accordance with
Section 1.08 hereof or an effective registration
statement under the Securities Act:
(A) in the case of any Warrant that is a
Definitive Warrant, the Warrant Agent shall
permit the holder thereof to exchange such
Warrant for a Definitive Warrant that does
not bear the first paragraph of the legend
set forth above and rescind any related
restriction on the transfer of such Warrant;
and
(B) any such Warrant represented by a Global
Warrant shall not be subject to the
provisions set forth in (i) above (such sales
or transfers being subject only to the
provisions of Section 1.08(c) hereof)
provided, however, that with respect to any
request for an exchange of a Warrant that is
represented by a Global Warrant for a
Definitive Warrant that does not bear the
first paragraph of the legend set forth
above, which request is made in reliance upon
Rule 144 under the Securities Act, the holder
thereof shall certify in writing to the
Warrant Agent that such request is being made
pursuant to Rule 144 under the Securities Act
(such certification to be substantially in
the form of Exhibit B hereto).
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(h) Cancellation and/or Adjustment of a Global Warrant. At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Definitive Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any
time prior to such cancellation, if any beneficial interest in a Global Warrant
is exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Definitive Warrants.
(i) To permit registrations of transfers and exchanges,
the Company shall execute, at the Warrant Agent's
request, and the Warrant Agent shall, upon receipt of
an authentication order in accordance with Section
1.04 hereof, authenticate Definitive Warrants and
Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued
upon any registration, transfer or exchange of
Definitive Warrants or Global Warrants shall be the
valid obligations of the Company, entitled to the
same benefits under this Warrant Agreement as the
Definitive Warrants or Global Warrants surrendered
upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer
of any Warrant, the Warrant Agent and the Company may
deem and treat the person in whose name any Warrant
is registered as the absolute owner of such Warrant,
and neither the Warrant Agent nor the Company shall
be affected by notice to the contrary.
(j) Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of the Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for the Shares in a name
other than that of the registered holder of a Warrant Certificate surrendered
upon the exercise of a Warrant, and the Company shall not be required to issue
or deliver such Warrant Certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent
of the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity reasonably satisfactory to them
and, in the case of mutilation or defacement, upon surrender thereof to the
Warrant Agent for cancellation, then, in the absence of notice to the Company
or the Warrant Agent that such Warrant Certificate has been acquired by a bona
fide purchaser or holder in due course, the Company shall execute, and, upon
receipt of an authentication order in accordance with Section 1.04 hereof, an
authorized signatory of the Warrant Agent shall manually authenticate and
deliver, in exchange for
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or in lieu of the lost, stolen, destroyed, defaced or mutilated Warrant
Certificate, a new Warrant Certificate representing a like number of Warrants,
bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled
to the benefits of (but shall be subject to all the limitations of rights set
forth in) this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section 1.09 are exclusive with respect to the replacement of lost,
stolen, destroyed, defaced or mutilated Warrant Certificates and shall preclude
(to the extent lawful) any and all other rights or remedies notwithstanding any
law or statute existing or hereafter enacted to the contrary with respect to
the replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates.
The Warrant Agent is hereby authorized to authenticate in accordance
with the provisions of this Agreement, and deliver the new Warrant Certificates
required pursuant to the provisions of this Section.
SECTION 1.10. Offices for Exercise, etc. So long as any of the
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where the
Warrant Certificates may be presented for exercise, (b) an office or agency
where the Warrant Certificates may be presented for registration of transfer
and for exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 1.05 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or rescind such designation, as it may deem desirable or expedient;
provided, however, that an office or agency shall at all times be maintained in
the Borough of Manhattan, The City of New York, as provided in the first
sentence of this Section. In addition to such office or offices or agency or
agencies, the Company may from time to time designate and maintain one or more
additional offices or agencies within or outside The City of New York, where
Warrant Certificates may be presented for exercise or for registration of
transfer or for exchange, and the Company may from time to time change or
rescind such designation, as it may deem desirable or expedient. The Company
will give to the Warrant Agent written notice of the location of any such
office or agency and of any change of location thereof. The Company hereby
designates the office of United States Trust Company, an affiliate of the
Warrant Agent, in the Borough of Manhattan, the City of New York (the "Warrant
Agent Office"), as the initial agency maintained for each such purpose.
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ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
SECTION 2.01. Duration of Warrants. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., Dallas,
Texas time, on April 15, 2004 (the "Expiration Date"). Each Warrant may be
exercised on any Business Day (as defined below) on or after the Exercisability
Date (as defined below) and on or prior to the Expiration Date.
Any Warrant not exercised on or prior to the Expiration Date relating
to such Warrant shall become void, and all rights of the holder under the
Warrant Certificate evidencing such Warrant and under this Agreement shall
cease.
"Business Day" shall mean any day on which (i) banks in Dallas, Texas,
(ii) the principal national securities exchange or market on which the Common
Stock is listed or admitted to trading and (iii) the principal national
securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
SECTION 2.02. Exercise, Exercise Price, Settlement and Delivery. (a)
Subject to the provisions of this Agreement, (i) a holder of Warrants shall
have the right to purchase from the Company on or after the Effective Date (the
"Exercisability Date") and on or prior to the Expiration Date 10.2377 fully
paid, registered and non-assessable Shares, subject to adjustment in accordance
with Article V hereof, at the purchase price of $.102377 for each Warrant
exercised (the "Exercise Price").
(b) Warrants may be exercised on or after the Exercisability Date
by (i) surrendering at any office or agency maintained for that purpose by the
Company pursuant to Section 1.10 (each a "Warrant Exercise Office") the Warrant
Certificate evidencing such Warrants with the form of election to purchase
Shares set forth on the reverse side of the Warrant Certificate (the "Election
to Exercise") duly completed and signed by the registered holder or holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, and (ii) paying in full the Exercise Price for each such
Warrant exercised and any other amounts required to be paid pursuant to Section
1.08(j) hereof. Each Warrant may be exercised only in whole.
(c) Simultaneously with the exercise of each Warrant, payment in
full of the Exercise Price shall be made in cash or by certified or official
bank check to be delivered to the office or agency where the Warrant
Certificate is being surrendered. No payment or adjustment shall be made on
account of any dividends on the Shares issued upon exercise of a Warrant.
(d) Upon such surrender of a Warrant Certificate and payment and
collection of the Exercise Price at any Warrant Exercise Office (other than any
Warrant Exercise Office that also is an office of the Warrant Agent), such
Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "Exercise Date" for a Warrant shall be the date when all of the
items referred to in the first sentence
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of paragraphs (b) and (c) of this Section 2.02 are received by the Warrant
Agent at or prior to 2:00 p.m., Dallas, Texas time, on a Business Day and the
exercise of the Warrants will be effective as of such Exercise Date. If any
items referred to in the first sentence of paragraphs (b) and (c) are received
after 2:00 p.m., Dallas, Texas time, on a Business Day, the exercise of the
Warrants to which such item relates will be effective on the next succeeding
Business Day. Notwithstanding the foregoing, in the case of an exercise of
Warrants on the Expiration Date (as defined in Section 2.01), if all of the
items referred to in the first sentence of paragraphs (b) and (c) are received
by the Warrant Agent at or prior to 5:00 p.m., Dallas, Texas time, on such
Expiration Date, the exercise of the Warrants to which such items relate will
be effective on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise Price,
the Warrant Agent shall: (i) cause an amount equal to the Exercise Price to be
paid to the Company by crediting the same to the account designated by the
Company in writing to the Warrant Agent for that purpose; (ii) advise the
Company immediately by telephone of the amount so deposited to the Company's
account and promptly confirm such telephonic advice in writing and (iii) as
soon as practicable, advise the Company in writing of the number of Warrants
(giving effect to Section 5.01(i) below) exercised in accordance with the terms
and conditions of this Agreement and the Warrant Certificates, the instructions
of each exercising holder of the Warrant Certificates with respect to delivery
of the Shares to which such holder is entitled upon such exercise, and such
other information as the Company shall reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable after
the exercise of any Warrant or Warrants in accordance with the terms hereof,
the Company shall issue or cause to be issued to or upon the written order of
the registered holder of the Warrant Certificate evidencing such exercised
Warrant or Warrants, a certificate or certificates evidencing the Shares to
which such holder is entitled, in fully registered form, registered in such
name or names as may be directed by such holder pursuant to the Election to
Exercise, as set forth on the reverse of the Warrant Certificate. The Warrant
Agent shall have no obligation to ascertain the number of Shares to be issued
with respect to the exercised Warrant or Warrants. Such certificate or
certificates evidencing the Shares shall be deemed to have been issued and any
persons who are designated to be named therein shall be deemed to have become
the holder of record of such Shares as of the close of business on the Exercise
Date. After such exercise of any Warrant or Warrants, the Company shall also
issue or cause to be issued to or upon the written order of the registered
holder of such Warrant Certificate, a new Warrant Certificate, countersigned by
the Warrant Agent pursuant to the Company's written instruction, evidencing the
number of Warrants, if any, remaining unexercised unless such Warrants shall
have expired.
SECTION 2.03. Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and
if so delivered, shall be canceled by it and retired. The Warrant Agent shall
cancel all Warrant Certificates properly surrendered for exchange,
substitution, transfer or exercise. The Warrant Agent shall destroy canceled
Warrant Certificates held by it and deliver a certificate of destruction to the
Company. The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay to the Company all monies received
by the Warrant Agent for the purchase of Warrant Shares through the exercise of
such Warrants.
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ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any of the
provisions of this Agreement, any holder of any Warrant Certificate, without
the consent of the Warrant Agent, the holder of any Shares or the holder of any
other Warrant Certificate, may, in and for his own behalf, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall entitle
the holders thereof to any of the rights of a holder of Shares, including,
without limitation, the right to vote or to receive any dividends or other
payments 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 to
share in the assets of the Company in the event of the liquidation, dissolution
or winding up of the Company's affairs or any other matter, or any rights
whatsoever as stockholders of the Company.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrants and of the Shares
upon the exercise of Warrants or to the separation of the Warrants and Notes as
described in Section 4.01; provided, however, that the Company shall not be
required to pay any tax or other governmental charge which may be payable in
respect of any transfer or exchange of any Warrant Certificates or any
certificates for Shares in a name other than the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant. In any such case, no
transfer or exchange shall be made unless or until the person or persons
requesting issuance thereof shall have paid to the Company the amount of such
tax or other governmental charge or shall have established to the satisfaction
of the Company that such tax or other governmental charge has been paid or an
exemption is available therefrom.
ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Price and Number of Shares
Issuable. The number and kind of Shares purchasable upon the exercise of
Warrants and the Exercise Price shall be subject to adjustment from time to
time as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of Common Stock or
(C) combine its outstanding shares of Common Stock into a smaller number of
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shares, the number of Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that the holder of any Warrant
thereafter exercised shall be entitled to receive the number of Shares which
such holder would have owned immediately following such action had such Warrant
been exercised immediately prior thereto. An adjustment made pursuant to this
paragraph shall become effective immediately after the record date in the case
of a dividend and shall become effective immediately after the effective date
in the case of a subdivision, combination or reclassification. If, as a result
of an adjustment made pursuant to this paragraph, the holder of any Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of capital stock of the Company, the Board of Directors of the Company
(whose determination shall be conclusive) shall determine the allocation of the
adjusted Exercise Price between or among shares of such classes of capital
stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock (other than as
set forth in Section 5.01(a) above and other than a change in par value, or
from par value to no par value, or from no par value to par value, or in case
of any consolidation or merger of the Company with or into another corporation
(other than a merger in which the Company is the continuing corporation and
which does not result in any reclassification or change of the then outstanding
shares of Common Stock or other capital stock of the Company (other than a
change in par value, or from par value to no par value, or from par value to
par value or as a result of a subdivision or combination)) or in case of any
sale or conveyance to another corporation of all or substantially all of the
assets of the Company, then, as a condition of such reclassification, change,
consolidation, merger, sale or conveyance, the Company or such a successor or
purchasing corporation, as the case may be, shall forthwith make lawful and
adequate provision whereby the holder of such Warrant then outstanding shall
have the right thereafter to receive on exercise of such Warrant the kind and
amount of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock issuable upon exercise of such
Warrant immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance and enter into a supplemental warrant agreement so
providing. Such provisions shall include provision for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Article V. If the issuer of securities deliverable upon exercise of
Warrants under the supplemental warrant agreement is an affiliate of the
formed, surviving or transferee corporation, that issuer shall join in the
supplemental warrant agreement. The above provisions of this paragraph (b)
shall similarly apply to successive reclassifications and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.
In case of any such reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than
the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant Agreement
to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of shares of the Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Article V. The foregoing
provisions of this Section 5.01(b) shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
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(c) Issuance of Common Stock, Options or Convertible Securities.
For the purposes of this Warrant Agreement, "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued or deemed to be issued by the
Company after the Effective Date, other than Excluded Shares (as defined
below).
In the event the Company shall, at any time or from time to time after
the Effective Date, issue, sell, distribute or otherwise grant in any manner
(including by assumption) shares of Common Stock or any rights to subscribe for
or to purchase, or any warrants or options for the purchase of, Common Stock or
any stock or securities convertible into or exchangeable for Common Stock (any
such rights, warrants or options being herein called "Options" and any such
convertible or exchangeable stock or securities being herein called
"Convertible Securities") or any Convertible Securities (other than upon
exercise of any Option), whether or not such Options or the rights to convert
or exchange such Convertible Securities are immediately exercisable, then the
maximum number of shares of Common Stock (as set forth int he instrument
relating thereto without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise and/or
conversion of such Options or Convertible Securities, shall be deemed to be
Additional Shares of Common Stock.
For purposes of this Warrant Agreement, the term "Issuance Date" shall
mean (i) with respect to Additional Shares of Common Stock deemed to have been
issued in connection with the issuance of an Option or Convertible Security,
the date such Option or Convertible Security is issued and (ii) in all other
cases, the actual date Additional Shares of Common Stock are issued.
For the purposes of this Warrant Agreement, "Excluded Shares" shall
mean: (i) shares for which the consideration per share as determined pursuant
to paragraph (d) below would be equal to or more than the Current Market Value
determined on the day prior to the Issuance Date; (ii) shares of Common Stock
issuable upon the exercise of Options or conversion of Convertible Securities
existing as of the Effective Date; and (iii) shares of Common Stock
(appropriately adjusted to reflect stock splits, stock dividends,
reorganizations, consolidations and similar changes) issued pursuant to any
stock options granted or obtained after the Effective Date pursuant to the
Company's Stock Option Plan adopted July 26, 1994, as may be amended from time
to time by the Company's Board of Directors. The issuance of Excluded Shares
shall not be an issuance of Additional Shares of Common Stock, and shall not
give rise to a right to purchase the securities pursuant to paragraph (d)
below.
In any such case in which the Additional Shares of Common Stock are
deemed to be issued, no right to purchase securities under Section 5.01(d)
below will accrue upon the subsequent issue of shares of Common Stock upon the
exercise and/or conversion or exchange of such Option or Convertible Security
unless such Option or Convertible Security shall have been amended or modified
prior to exercise or conversion or exchange so as to increase the number of
Additional Shares of Common Stock deemed to have been issued thereunder or
decrease the exercise and/or conversion or exchange price payable thereunder to
an amount less than Current Market Value as of the Issuance Date thereof.
(d) If the price per share at which Common Stock is issued or
Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities
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(determined by dividing (i) the aggregate amount, if any, received or
receivable by the Company as consideration for the issuance, sale, distribution
or granting of such Common Stock or Options or any such Convertible Security,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the issuance of Common Stock or the exercise of all such
Options or upon conversion or exchange of all such Convertible Securities,
plus, in the case of Options to acquire Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the
conversion or exchange of all such Convertible Securities, by (ii) the total
maximum number of shares of Common Stock to be issued or issuable upon the
exercise of all such Options or upon the conversion or exchange of all such
Convertible Securities or upon the conversion or exchange of all Convertible
Securities issuable upon the exercise of all Options) shall be less than the
Current Market Value per share of Common Stock (determined pursuant to Section
5.01(e)) on the record date for the issuance, sale, distribution or granting of
such Options (any such event being herein called a "Distribution") then, the
Company shall offer to sell to each holder of Warrants, at the same price and
on the same terms offered to all other prospective buyers (provided that the
holders of Warrants shall not be required to buy any other securities in order
to buy such Common Stock or Convertible Securities), a portion of such Common
Stock or Convertible Securities that is equal to such holder's portion of the
Common Stock then outstanding if immediately prior thereto all the Warrants had
been exercised. Each such holder may elect to buy all or any portion of the
Common Stock or Convertible Securities offered or may decline to purchase any
such securities.
(e) Current Market Value. As used herein, the term "Current Market
Value" per share of Common Stock or any other security at any date means, on
any date of determination (a) the average of the daily closing sale prices for
each of 15 business days immediately preceding such date (or such shorter
number of days during which such security has been listed or traded), if the
security has been listed on the New York Stock Exchange, the American Stock
Exchange or other national securities exchanges or the NASDAQ National Market
for at least 10 business days prior to such date, (b) if such security is not
so listed or traded, the average of the daily closing bid prices for each of
the 15 business days immediately preceding such date (or such shorter number of
days during which such security had been quoted), if the security has been
quoted on a national over-the-counter market for at least 10 business days, and
(c) otherwise, the value of the security most recently determined as of a date
within the six months preceding such day by the Company's Board of Directors.
(f) Consideration Received. If any shares of Common Stock, Options
or Convertible Securities shall be issued, sold or distributed for a
consideration other than cash, the amount of the consideration other than cash
received by the Company in respect thereof shall be deemed to be the then fair
market value of such consideration (as determined in good faith by the Board of
Directors of the Company). If any Options shall be issued in connection with
the issuance and sale of other securities of the Company, together comprising
one integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed to have been
issued without consideration; provided, however, that if such Options have an
exercise price equal to or greater than the Current Market Value of the Common
Stock on the date of issuance of such Options, then such Options shall be
deemed to have been issued for consideration equal to such exercise price.
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(g) Changes in Options and Convertible Securities. If the exercise
price provided for in any Options referred to in Section 5.01(d) above, the
additional consideration, if any, payable upon the conversion or exchange of
any Convertible Securities referred to in Section 5.01(d) above, or the rate at
which any Convertible Securities referred to in Section 5.01(d) above are
convertible into or exchangeable for Common Stock shall change at any time to a
price which is less than the Current Market Value thereof as of the Issuance
Date, then the Company shall make the offer to holders of the Warrants as
required by Section 5.01(d) above.
(h) Other Action Affecting Common Stock. In case at any time or
from time to time the Company shall take any action in respect of its Common
Stock, other than any action described in this Article V, then the number of
Shares for which this Warrant is exercisable shall be adjusted in such manner
as may be equitable in the circumstances. If the Company shall at any time and
from time to time issue or sell (i) any shares of any class of common stock
other than Common Stock, (ii) any evidences of its indebtedness, shares of
stock or other securities which are convertible into or exchangeable for such
shares of common stock, with or without the payment of additional consideration
in cash or property or (iii) any warrants or other rights to subscribe for or
purchase any such shares of common stock or any such evidences, shares of stock
or other securities, then in each such case such issuance shall be deemed to be
of, or in respect of, Common Stock for purposes of this Article V; provided,
however, that, without limiting the generality of the foregoing, if the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend payable in, or other distribution of,
common stock other than Common Stock, including shares of non-voting common
stock, then the number of Shares for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the aggregate number of shares of such common stock and of Common Stock which a
record holder of the same number of Shares for which this Warrant is
exercisable immediately prior to the occurrence of such event would own or be
entitled to receive after the happening of such event.
(i) Statement of Warrants. Irrespective of any adjustment in the
number or kind of Shares issuable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued shall continue to express the same number and
kind of shares as are stated in the Warrants initially issuable pursuant to
this Agreement.
SECTION 5.02. Fractional Interest. The Company shall not be required
to issue fractional shares of Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by
the same holder, the number of full shares of Common Stock which shall be
issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock acquirable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall direct the transfer agent for the
Common Stock to pay an amount in cash calculated by the Company to equal the
then Current Market Value per share (determined pursuant to Section 5.01(e))
multiplied by such fraction computed to the nearest whole cent. Holders of
Warrants, by their acceptances of the Warrant Certificates, expressly waive any
and all rights to receive any fraction of a share of Common Stock or a stock
certificate representing a fraction of a share of Common Stock.
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SECTION 5.03. When Adjustment Not Required. If the Company shall take
a record of the holders of its Common Stock for the purpose of entitling them
to receive a dividend or distribution or subscription or purchase rights and
shall, thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then thereafter no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made in respect
thereof shall be rescinded and annulled.
SECTION 5.04. Challenge to Good Faith Determination. Whenever the
Board of Directors of the Company shall be required to make a determination in
good faith of the fair value of any item under this Article V, such
determination may be challenged in good faith by holders holding a majority of
the outstanding Warrants (the "Majority Holders"), and any dispute shall be
resolved by an investment banking firm of national standing selected by the
Company. The fee of such investment banking firm shall be paid by the Company,
unless such fair market value as determined by the investment banking firm is
more than 95% of the fair market value determined by the Board of Directors of
the Company, in which case the challenging holders shall be jointly and
severally liable for such fee.
SECTION 5.05. Treasury Stock. The sale or other disposition of any
issued shares of Common Stock owned or held by or for the account of the
Company shall be deemed an issuance thereof and a repurchase thereof and
designation of such shares as treasury stock shall be deemed to be a redemption
thereof for the purposes of this Agreement.
SECTION 5.06. Notices to Warrant Holders. In connection with any
adjustment pursuant to this Article V, the Company shall (i) promptly after
such adjustment or, if earlier, at least five (5) days prior to the date on
which notice of such adjustment is required to be given, if at all, to The
Depository Trust Company cause to be filed with the Warrant Agent a certificate
of an officer of the Company setting forth the number of shares (or portion
thereof) issuable after such adjustment, upon exercise of a Warrant, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) promptly after such adjustment cause to be given to
each of the registered holders of the Warrant Certificates at his address
appearing on the Warrant Register written notice of such adjustments by
first-class mail, postage prepaid. The Warrant Agent shall be entitled to
conclusively rely on the above-referenced officer's certificate and shall be
under no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time to any holder desiring an inspection thereof
during normal business hours upon reasonable notice. The Warrant Agent shall
not at any time be under any duty or responsibility to any holder to determine
whether any facts exist that may require any adjustment of the number of Shares
issuable on exercise of the Warrants or the Exercise Price, or with respect to
the nature or extent of any such adjustment when made, or with respect to the
method employed in making such adjustment or the validity or value (or the kind
or amount) of any Shares which may be issuable on exercise of the Warrants. The
Warrant Agent shall not be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of Common Stock or
stock certificates or other common stock or property upon the exercise of any
Warrant.
The Company shall, in addition, promptly notify the holders of the
Warrants of any determination of its Board of Directors pursuant to Section
5.01(i) that any actions affecting its Common Stock will not require an
adjustment to the number of Shares for which a Warrant is
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exercisable, and shall specify in such notice the reasons for such
determination. In the event that the Majority holders shall challenge any of
the calculations set forth in such notice within 20 days after the Company's
delivery thereof, the Company shall retain a firm of independent certified
public accountants or law firm of national standing selected by the Company to
prepare and execute a certificate verifying that no adjustment is required. The
Company shall promptly cause a signed copy of any certificate prepared pursuant
to this Section 5.06 to be delivered to each holder at his address appearing in
the Warrant Register. The Company shall keep at its office or agency designated
pursuant to Section 1.10 copies of all such certificates and cause the same to
be available for inspection at said office during normal business hours upon
reasonable notice by any holder or any prospective purchaser of a Warrant
designated by a holder thereof.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company hereby appoints U.S. Trust
Company of Texas, N.A. as warrant agent (and in all capacities in this
Agreement, the "Warrant Agent") of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
and in the Warrant Certificates set forth; and U.S. Trust Company of Texas,
N.A. hereby accepts such appointment. The Warrant Agent shall have the powers
and authority specifically granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it and it
shall accept in writing. All of the terms and provisions with respect to such
powers and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
SECTION 6.02. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and in the Warrant Certificates, including the following, to all of
which the Company agrees and to all of which the rights hereunder of the
holders from time to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to compensation to be
agreed upon with the Company in writing for all services rendered by it and the
Company agrees promptly to pay such compensation and to reimburse the Warrant
Agent for its reasonable out-of-pocket expenses (including reasonable fees and
expenses of counsel) incurred without gross negligence or willful misconduct on
its part in connection with the services rendered by it hereunder. The Company
also agrees to indemnify the Warrant Agent, each predecessor Warrant Agent, and
their respective directors, officers, affiliates, agents and employees for, and
to hold it and its directors, officers, affiliates, agents and employees
harmless against, any loss, liability or expense of any nature whatsoever
(including, without limitation, fees and expenses of counsel) incurred without
gross negligence or willful misconduct on the part of the Warrant Agent or
predecessor Warrant Agent, arising out of or in connection with its acting as
such Warrant Agent hereunder and its exercise or failure to exercise of its
rights and performance of its obligations hereunder. The obligations of the
Company under this Section 6.02 shall survive the exercise and the expiration
of the Warrant Certificates and the resignation and removal of the Warrant
Agent.
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(b) In acting under this Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of the
Company and does not assume any obligation or relationship of agency or trust
for or with any of the owners or holders of the Warrant Certificates.
(c) The Warrant Agent may consult with counsel and any advice or
written opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it, in the absence of bad faith,
to be genuine and to have been presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any
interest in, Warrant Certificates, shares or other obligations of the Company
with the same rights that it or they would have it if were not the Warrant
Agent hereunder and, to the extent permitted by applicable law, it or they may
engage or be interested in any financial or other transaction with the Company
and may act on, or as depositary, trustee or agent for, any committee or body
of holders of shares or other obligations of the Company as freely as if it
were not the Warrant Agent hereunder. Nothing in this Agreement shall be deemed
to prevent the Warrant Agent or such Related Parties from acting in any other
capacity for the Company.
(f) The Warrant Agent shall not be under any liability for
interest on, and shall not be required to invest, any monies at any time
received by it pursuant to any of the provisions of this Agreement or of the
Warrant Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision hereof) or
the execution and delivery hereof (except the due execution and delivery hereof
by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its authentication thereof).
(h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication thereon)
shall be taken as the statements of the Company and the Warrant Agent assumes
no responsibility for the correctness of the same. The Warrant Agent does not
make any representation as to the validity or sufficiency of this Agreement or
the Warrant Certificates, except for its due execution and delivery of this
Agreement; provided, however, that the Warrant Agent shall not be relieved of
its duty to authenticate the Warrant Certificates as authorized by this
Agreement. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may require:
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(1) an Officers' Certificate (as defined in the
Indenture) stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Warrant Agreement relating to
the proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of the
Warrant Agent, an opinion of counsel for the Company stating that, in
the opinion of such counsel, all such conditions precedent have been
complied with.
Each Officers' Certificate or, if requested, an opinion of counsel
with respect to compliance with a condition or covenant provided for in this
Warrant Agreement shall include:
(1) a statement that the person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
(j) The Warrant Agent shall be obligated to perform such duties as
are herein and in the Warrant Certificates specifically set forth and no
implied duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement. The Warrant Agent
shall have no duty or responsibility in case of any default by the Company in
the performance of its covenants or agreements contained in the Warrant
Certificates or in the case of the receipt of any written demand from a holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except
as provided in Section 7.02 hereof, to make any demand upon the Company. The
Warrant Agent shall not be obligated to perform any duty to the extent
prohibited by law.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
made or given under any provision of this Agreement shall be sufficient if
signed by its chairman of the Board of Directors, its president, its treasurer,
its controller or any vice president or its secretary or any assistant
secretary.
(1) The Warrant Agent shall have no responsibility in respect of
any adjustment pursuant to Article V hereof.
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(m) 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 by the
Warrant Agent of the provisions of this Agreement.
(n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties hereunder
from any one of the chairman of the Board of Directors, the president, the
treasurer, the controller, any vice president or the secretary of the Company
or any other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or officials
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions with respect to any matter arising in connection
with the Warrant Agent's duties and obligations arising under this Agreement.
Such application by the Warrant Agent for written instructions from the Company
may, at the option of the Warrant Agent, set forth in writing any action
proposed to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such action
shall be taken and the Warrant Agent shall not be liable for any action taken
or omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall be not less than 10 Business
Days after the Company receives such application unless the Company consents to
a shorter period), provided that (i) such application includes a statement to
the effect that it is being made pursuant to this paragraph (n) and that unless
objected to prior to such date specified in the application, the Warrant Agent
will not be liable for any such action or omission to the extent set forth in
such application and (ii) prior to taking or omitting any such action, the
Warrant Agent has not received written instructions objecting to such proposed
action or omission.
(o) Whenever in the performance of its duties under this Agreement
the Warrant Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice president or
the secretary of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and delivered to
the Warrant Agent; and such certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend its
own funds in the performance of its obligations and duties hereunder.
SECTION 6.03. Resignation and Appointment of Successor. (a) The
Company agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective, provided that
such date shall be at least 30 days after the date on which such
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notice is given unless the Company agrees to accept less notice. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
Warrant Agent, qualified as provided in Section 6.03(d) hereof, by written
instrument in duplicate signed on behalf of the Company, one copy of which
shall be delivered to the resigning Warrant Agent and one copy to the successor
Warrant Agent. As provided in Section 6.03(d) hereof, such resignation shall
become effective upon the earlier of (x) the acceptance of the appointment by
the successor Warrant Agent or (y) 30 days after receipt by the Company of
notice of such resignation. The Company may, at any time and for any reason,
and shall, upon any event set forth in the next succeeding sentence, remove the
Warrant Agent and appoint a successor Warrant Agent by written instrument in
duplicate, specifying such removal and the date on which it is intended to
become effective, signed on behalf of the Company, one copy of which shall be
delivered to the Warrant Agent being removed and one copy to the successor
Warrant Agent. The Warrant Agent shall be removed as aforesaid if it shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Warrant Agent or of its property shall be appointed, or any
public officer shall take charge or control of it or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation. Any removal of
the Warrant Agent and any appointment of a successor Warrant Agent shall become
effective upon acceptance of appointment by the successor Warrant Agent as
provided in Section 6.03(d). 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
Warrants in the manner provided for in Section 7.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the
Company shall fail to appoint a successor Warrant Agent within a period of 30
days after receipt of such notice of resignation or removal, then the holder of
any Warrant Certificate or the Warrant Agent may apply to a 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.
(d) Any successor Warrant Agent, whether appointed by the Company
or by a court, shall be a bank or trust company in good standing, incorporated
under the laws of the United States of America or any State thereof and having,
at the time of its appointment, a combined capital surplus of at least $50
million. Such successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Warrant Agent
hereunder, and such predecessor shall thereupon become obligated to (i)
transfer and deliver, and such successor Warrant Agent shall be entitled to
receive, all securities, records or other property on deposit with or held by
such predecessor as Warrant Agent hereunder and (ii) upon payment of the
amounts then due it pursuant to Section 6.02(a) hereof, pay over, and such
successor Warrant Agent shall be entitled to receive, all monies deposited with
or held by any predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent hereunder
may be merged or converted, or any corporation or bank with which the Warrant
Agent may be consolidated, or any corporation or bank resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation or bank to which the Warrant Agent shall sell or
otherwise
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transfer all or substantially all of its corporate trust business, shall be the
successor to the Warrant Agent under this Agreement (provided that such
corporation or bank shall be qualified as aforesaid) without the execution or
filing of any document or any further act on the part of any of the parties
hereto.
(f) No Warrant Agent under this Warrant Agreement shall be
personally liable for any action or omission of any successor Warrant Agent or
of the Company.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement and the terms of the Warrants
may be amended by the Company and the Warrant Agent, without the consent of the
holder of any Warrant Certificate, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained herein or therein or in any other manner which the Company may deem
necessary or desirable and which shall not adversely affect in any material
respect the interests of the holders of the Warrant Certificates.
The Company and the Warrant Agent may modify this Agreement and the
terms of the Warrants with the consent of not less than a majority in number of
the then outstanding Warrants for the purpose of adding any provision to or
changing in any manner or eliminating any of the provisions of this Agreement
or modifying in any manner the rights of the holders of the outstanding
Warrants; provided, however, that no such modification that decreases the
Exercise Rate, reduces the period of time during which the Warrants are
exercisable hereunder, otherwise materially and adversely affects the exercise
rights of the holders of the Warrants, reduces the percentage required for
modification, or effects any change to this Section 7.01 may be made with
respect to an outstanding Warrant without the consent of the holder of such
Warrant.
Any modification or amendment made in accordance with this Agreement
will be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
SECTION 7.02. Notices and Demands to the Company and Warrant Agent. If
the Warrant Agent shall receive any notice or demand addressed to the Company
by the holder of a Warrant Certificate pursuant to the provisions hereof or of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 7.03. Addresses for Notices to Parties and for Transmission of
Documents. All notices hereunder to the parties hereto shall be deemed to have
been given when sent by certified or registered mail, postage prepaid, or by
telex or telecopy, confirmed by first class mail, postage prepaid, addressed to
any party hereto as follows:
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To the Company:
Packaged Ice, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with copies to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Warrant Agent:
U.S. Trust Company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
or at any other address of which either of the foregoing shall have notified
the other in writing.
SECTION 7.04. Notices to Holders. Notices to holders of Warrants shall
be mailed to such holders at the addresses of such holders as they appear in
the Warrant Register. Any such notice shall be sufficiently given if sent by
first-class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW. THE VALIDITY, INTERPRETATION AND
PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER AND
OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 7.06. Obtaining of Governmental Approvals. The Company will
from time to time take all action required to be taken by it which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities acts filings
under United States Federal and State laws, and the rules and regulations of
all stock exchanges on which the Warrants are listed which may be or become
requisite in connection with
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the issuance, sale, transfer, and delivery of the Warrant Certificates, the
exercise of the Warrants or the issuance, sale, transfer and delivery of the
shares issued upon exercise of the Warrants.
SECTION 7.07. Persons Having Rights Under Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Warrant Agent and the
holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
holders of the Warrant Certificates.
SECTION 7.08. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 7.10. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent, for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.
SECTION 7.11. 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.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
PACKAGED ICE, INC.
By: /s/ ▇.▇. ▇▇▇▇▇ III
-------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇ III
Title: President
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Warrant Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
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EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
[Unless and until it is exchanged in whole or in part for Warrants in
certificated form, this Warrant may not be transferred except as a whole 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. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.](1)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" ( AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (
AS DEFINED IN RULE 501 (A)(l), (2), (3) OR (7) PROMULGATED UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO PACKAGED ICE, INC. (THE "COMPANY") OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 PROMULGATED UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 PROMULGATED UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
----------------------------------
(1) This paragraph is to be included only if the Warrant is in global form.
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TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE WARRANT AGENT AND THE
COMPANY SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
SECURITYHOLDERS' AND REGISTRATION RIGHTS AGREEMENT DATED AS OF OCTOBER 16, 1997
AMONG ▇▇▇▇▇▇▇▇▇ & COMPANY, INC. AND THE COMPANY, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
PACKAGED ICE, INC.
This Warrant Certificate certifies that [ ], or
registered assigns, is the registered holder of [ ] Warrants (the "Warrants")
to purchase shares of Common Stock, par value $.01 per share (the "Common
Stock"), of PACKAGED ICE, INC., a Texas corporation (the "Company"). Each
Warrant entitles the holder to purchase from the Company at any time on or
after October 16, 1997 until 5:00 p.m., Dallas, Texas time, on April 15, 2004
(the "Expiration Date"), 10.2377 fully paid and non-assessable shares of Common
Stock (a "Share", or, if adjusted, the "Shares", which may also include any
other securities or property purchasable upon exercise of a Warrant, such
adjustment and inclusion each as provided in the Warrant Agreement) at the
exercise price (the "Exercise Price") of $.102377 per Warrant upon surrender of
this Warrant Certificate and payment of the Exercise Price at any office or
agency maintained for that purpose by the Company (the "Warrant Agent Office"),
subject to the conditions set forth herein and in the Warrant Agreement.
The Exercise Price shall be payable by cash, certified check or
official bank check or by such other means as is acceptable to the Company in
the lawful currency of the United States of America which as of the time of
payment is legal tender for payment of public or private debts. The Company has
initially designated the office of United States Trust Company, an affiliate of
the Warrant Agent, at its agent's office in the Borough of Manhattan, the City
of New York, as the initial Warrant Agent Office. The number of Shares issuable
upon exercise of the Warrants ("Exercise Rate") is subject to adjustment upon
the occurrence of certain events set forth in the Warrant Agreement.
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Any Warrants not exercised on or prior to 5:00 p.m., Dallas, Texas
time, on April 15, 2004 shall thereafter be void.
Reference is hereby made to the further provisions on the reverse
hereof which provisions shall for all purposes have the same effect as though
fully set forth at this place. Capitalized terms used in this Warrant
Certificate but not defined herein shall have the meanings ascribed thereto in
the Warrant Agreement.
This Warrant Certificate shall not be valid unless authenticated by
the Warrant Agent, as such term is used in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
WITNESS the facsimile seal of the Company and facsimile signatures of
its duly authorized officers.
Dated:
PACKAGED ICE, INC.
[Seal] By:
------------------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
Certificate of Authentication:
This is one of the Warrants
referred to in the within
mentioned Warrant Agreement:
U.S. TRUST COMPANY OF TEXAS, N.A.
as Warrant Agent
By:
--------------------------------
Authorized Signatory
-31-
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[FORM OF WARRANT CERTIFICATE]
[REVERSE]
PACKAGED ICE, INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, each of which represents the right to purchase at
any time on or after October 16, 1997, until 5:00 p.m., Dallas, Texas time, on
April 15, 2004, one share of Common Stock of the Company, subject to adjustment
as set forth in the Warrant Agreement. The Warrants are issued pursuant to a
Warrant Agreement dated as of October 16, 1997 (the "Warrant Agreement"), duly
executed and delivered by the Company to U.S. Trust Company of Texas, N.A., as
Warrant Agent (the "Warrant Agent"), which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. Warrants may be exercised by (i)
surrendering at any Warrant Agent Office this Warrant Certificate with the form
of Election to Exercise set forth hereon duly completed and executed and (ii)
paying in full the Warrant Exercise Price for each such Warrant exercised and
any other amounts required to be paid pursuant to the Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 2:00 p.m., Dallas,
Texas time, on a Business Day, the exercise of the Warrant to which such items
relate will be effective on such Business Day. If any items referred to in the
last sentence of the preceding paragraph are received after 2:00 p.m., Dallas,
Texas time, on a Business Day, the exercise of the Warrants to which such item
relates will be deemed to be effective on the next succeeding Business Day.
Notwithstanding the foregoing, in the case of an exercise of Warrants on the
Expiration Date, if all of the items referred to in the last sentence of the
preceding paragraph are received by the Warrant Agent at or prior to 5:00 p.m.,
Dallas, Texas time, on such Expiration Date, the exercise of the Warrants to
which such items relate will be effective on the Expiration Date.
Subject to the terms of the Warrant Agreement, as soon as practicable
after the exercise of any Warrant or Warrants, the Company shall issue or cause
to be issued to or upon the written order of the registered holder of this
Warrant Certificate, a certificate or certificates evidencing the Share or such
holder pursuant to the Election to Exercise, as set forth on the reverse of
this warrant Certificate. Such certificate or certificates evidencing the Share
or Shares shall be deemed to have been issued and any persons who are
designated to be named therein shall be deemed to have become the holder of
record of such Share or Shares as of the close of business on the date upon
which the exercise of this Warrant was deemed to be effective as provided in
the preceding paragraph.
The Company will not be required to issue fractional shares of Common
Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, there shall be paid to the registered holder of this Warrant
Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the
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same fraction of the Current Market Value per share as determined in accordance
with the Warrant Agreement.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may
be exchanged for a new Warrant Certificate or new Warrant Certificates
evidencing in the aggregate a like number of Warrants, in the manner and
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection
therewith.
Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection
therewith.
The Company and the Warrant Agent may deem and treat the registered
holder 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.
The term "Business Day" shall mean any day on which (i) banks in
Dallas, Texas, (ii) the principal national securities exchange or market on
which the Common Stock is listed or admitted to trading and (iii) the principal
national securities exchange or market on which the Warrants are listed or
admitted to trading are open for business.
-33-
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(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise ______ of the
Warrants represented by this Warrant Certificate and purchase the whole number
of Shares issuable upon the exercise of such Warrants and herewith tenders
payment for such Shares in the amount of $_________ in cash or by certified or
official bank check, in accordance with the terms hereof. The undersigned
requests that a certificate representing such Shares be registered in the name
of ___________________________ whose address is
_____________________________________ and that such certificate be delivered to
___________________________ whose address is
__________________________________. Any cash payments to be paid in lieu of a
fractional Share should be made to ______________________________________ whose
address is ________________________________ and the check representing payment
thereof should be delivered to ____________________________ whose address is
___________________________.
Dated ,
----------------- ---
Name of holder of
Warrant Certificate:
-------------------------------------------
(Please Print)
Tax Identification or
Social Security Number:
----------------------------------------
Address:
-------------------------------------------------------
-------------------------------------------------------
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 whatever.
Dated ,
-------------------- ---
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[FORM OF ASSIGNMENT]
For value received ________________________ hereby sells, assigns and
transfers unto _________________________the within Warrant Certificate,
together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _________________________________ attorney,
to transfer said Warrant Certificate on the books of the within-named Company,
with full power of substitution in the premises.
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 whatever.
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SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(2)
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
Number of Warrants of
Amount of decrease in Amount of increase in this Global Warrant
Date of Number of Warrants of Number of Warrants of following such decrease Signature of authorized
Exchange this Global Warrant this Global Warrant (or increase) officer of Warrant Agent
---------------------------------------------------------------------------------------------------------------------
----------------------------------
(2) This is to be included only if the Warrant is in global form.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of Packaged Ice,
Inc.
This Certificate relates to ________ Warrants held in* book-entry or*
__________ certificated form by __________________ (the "Transferor" ).
The Transferor:*
[ ] has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depositary a Warrant or Warrants in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above); or
[ ] has requested the Warrant Agent by written order to exchange
or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that the Transferor is familiar
with the Warrant Agreement relating to the above captioned Warrants and the
restrictions on transfers thereof as provided in Section 1.08 of such Warrant
Agreement, and that the transfer of this Warrant does not require registration
under the Securities Act of 1933, as amended (the "Act") because[*]:
[ ] Such Warrant is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 1.08(a)(y)(A) or Section
1.08(d)(i)(A) of the Warrant Agreement.
[ ] Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act), in reliance on Rule 144A or in
accordance with Regulation S under the Act.
[ ] Such Warrant is being transferred in accordance with Rule 144
under the Act.
[ ] Such Warrant is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act,
other than Rule 144A or Rule 144 or Regulation S under the Act. An opinion of
counsel to the effect that such transfer does not require registration under
the Act accompanies this Certificate.
-------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------
Date:
----------------------------
*Check applicable box.
B-1
42
EXHIBIT C
Transferee Letter of Representation
Packaged Ice, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of warrants to purchase
Common Stock, par value $.01 per share, (the "Securities") of Packaged Ice,
Inc. (the "Company") we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities
prior to the date which is two years after the later of the date of original
issue and the last date on which the Company or any affiliate of the Company
was the owner of such Securities, or any predecessor thereto (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) so long as the Securities are eligible for resale pursuant to Rule
144A, under the Securities Act, to a person we reasonably believe is a
qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of subparagraph (a)(l), (2), (3) or (7) of Rule 501 under the
Securities Act that is purchasing for his own account or for the account of
such an institutional "accredited investor, or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or
accounts be at all times within our or their control and to compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter
to the warrant agent under the Warrant Agreement pursuant to which the
Securities were issued (the "Warrant Agent") which shall provide, among other
things, that the transferee is an institutional "accredited investor" within
the meaning of subparagraph (a)(l), (2), (3) or (7) of Rule 501 under the
Securities Act and that it is acquiring such Securities for investment purposes
and not for distribution in violation of the Securities Act. The Warrant Agent
and the Company reserve the right prior to any offer, sale or other transfer
prior to the Resale Restriction Termination Date of the Securities pursuant to
clause (e) or (f) above to require the delivery of a written opinion of
counsel, certifications, and or other information satisfactory to the Company
and the Warrant Agent.
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2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its investment for
an indefinite period.
3. We are acquiring the Securities purchased by us for our own account
or for one or more accounts as to each of which we exercise sole investment
discretion.
4. You, the Warrant Agent and your respective counsel are entitled to
rely upon this letter and you are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
-------------------------------------
(Name of Purchaser)
By:
---------------------------------
Date:
-------------------------------
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
C-2