1
Exhibit 2.1
INVESTMENT AGREEMENT
dated as of July 6, 2000
between
DIME BANCORP, INC.
and
WARBURG, ▇▇▇▇▇▇ EQUITY PARTNERS, L.P.
2
TABLE OF CONTENTS
PAGE
RECITALS..................................................................................................... 1
ARTICLE I
PURCHASE; CLOSINGS
1.1 Purchase ...................................................................................... 2
1.2 Closings ...................................................................................... 3
(a) First Closing ........................................................................... 3
(b) Second Closing ........................................................................... 5
1.3 Interpretation................................................................................. 6
1.4 Transfer to Affiliates......................................................................... 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Disclosure..................................................................................... 7
2.2 Representations and Warranties of the Company.................................................. 8
(a) Organization and Authority................................................................. 8
(b) Company's Subsidiaries..................................................................... 8
(c) Capitalization............................................................................. 9
(d) Authorization.............................................................................. 10
(e) Knowledge as to Conditions................................................................. 11
(f) Company Financial Statements............................................................... 11
(g) Reports.................................................................................... 11
(h) Properties and Leases...................................................................... 12
(i) Taxes...................................................................................... 12
(j) No Material Adverse Effect................................................................. 13
(k) Commitments and Contracts.................................................................. 13
(l) Litigation and Other Proceedings........................................................... 14
(m) Insurance.................................................................................. 14
(n) Compliance with Laws....................................................................... 14
(o) Labor...................................................................................... 14
(p) Company Benefit Plans...................................................................... 15
(q) Brokers and Finders........................................................................ 18
(r) No Defaults................................................................................ 18
(s) Environmental Liability.................................................................... 19
(t) Anti-takeover Provisions Not Applicable.................................................... 19
(u) Rights Agreement Amendment................................................................. 19
2.3 Representations and Warranties of the Investor................................................. 19
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PAGE
(a) Organization and Authority................................................................. 19
(b) Authorization ........................................................................... 20
(c) Knowledge as to Conditions................................................................. 21
(d) Purchase for Investment.................................................................... 21
(e) Financial Capability....................................................................... 21
(f) Ownership ........................................................................... 21
(g) Brokers and Finders........................................................................ 21
ARTICLE III
COVENANTS
3.1 Filings; Other Actions........................................................................ 22
3.2 Expenses ..................................................................................... 23
3.3 Access, Information and Confidentiality....................................................... 23
3.4 Obligations................................................................................... 24
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Standstill Agreement.......................................................................... 24
4.2 Transfer Restrictions......................................................................... 24
(a) Restrictions on Transfer.................................................................. 24
(b) Permitted Transfers....................................................................... 25
(c) Transfer of Warrants...................................................................... 29
(d) Purchase of Warrants on Change in Control................................................. 29
(e) Purchase and Adjustment of Series D Warrants upon
Certain Events............................................................................ 30
(f) Transfers to Partners..................................................................... 31
4.3 Voting........................................................................................ 31
4.4 Preemptive Rights............................................................................. 32
(a) Sale of New Stock......................................................................... 32
(b) Notice. .......................................................................... 32
(c) Purchase Mechanism........................................................................ 33
(d) Failure of Purchase....................................................................... 33
4.5 Governance Matters............................................................................ 34
4.6 Legend........................................................................................ 35
4.7 Goodwill Litigation........................................................................... 36
4.8 Additional Regulatory Matters................................................................. 36
4.9 Reservation for Issuance...................................................................... 36
4.10 Certain Transactions.......................................................................... 36
4.11 Rights Plan................................................................................... 37
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PAGE
4.12 Extension Periods.............................................................................. 37
4.13 Indemnity...................................................................................... 37
4.14 Chairman of the Board.......................................................................... 38
ARTICLE V
MISCELLANEOUS
5.1 Survival ...................................................................................... 38
5.2 Amendment...................................................................................... 39
5.3 Waiver of Conditions........................................................................... 39
5.4 Counterparts and Facsimile..................................................................... 39
5.5 Governing Law.................................................................................. 39
5.6 WAIVER OF JURY TRIAL........................................................................... 39
5.7 Notices ...................................................................................... 39
5.8 Entire Agreement, Etc.......................................................................... 40
5.9 Definitions of "subsidiary" and "Affiliate".................................................... 40
5.10 Captions ...................................................................................... 41
5.11 Severability................................................................................... 41
5.12 No Third Party Beneficiaries................................................................... 41
5.13 Time of Essence................................................................................ 41
5.14 Certain Adjustments............................................................................ 41
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LIST OF EXHIBITS
Form of Series B Certificate........................................................................ 1
Form of Series C Certificate........................................................................ 2
Form of Series D Certificate........................................................................ 3
Form of SPRs Certificate............................................................................ 4
Form of Common Warrant Certificate.................................................................. 5
Form of Series B Warrant Certificate................................................................ 6
Form of Series C Warrant Certificate................................................................ 7
Form of Series D Warrant Certificate................................................................ 8
Form of Amendment to Stockholders Protection Rights Agreement....................................... 9
Black-Scholes Methodology........................................................................... 10
SEC Registration -- Related Provisions.............................................................. 11
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INDEX OF DEFINED TERMS
LOCATION OF
TERM DEFINITION
---- ----------
Acquiring Person....................................................................... 4.11
Affiliate.............................................................................. 5.9(b)
Agreement.............................................................................. Preamble
Bank................................................................................... 4.5(a)
bank holding company................................................................... 4.8(a)
beneficial owner....................................................................... 4.2(b)(3)(C)(ii)
beneficial ownership................................................................... 1.1(b)
Benefit Plan........................................................................... 2.2(p)(1)
BHC Act................................................................................ 4.8(a)
Board of Directors..................................................................... 2.2(d)
Board Representative................................................................... 4.5(a)
Business Combination................................................................... 4.2(b)(3)(C)(iii)
CERCLA................................................................................. 2.2(s)
Change in Control...................................................................... 4.2(b)(3)(C)
Code................................................................................... 2.2(p)(3)
Common Stock/Common Shares............................................................. Recitals
Common Warrants........................................................................ Recitals
Common Warrant Certificate............................................................. Recitals
Company................................................................................ Preamble
Company Financial Statements........................................................... 2.2(f)
Company Preferred Stock................................................................ 2.2(c)
Company Reports........................................................................ 2.2(g)
Company Stock Option................................................................... 2.2(c)
Company Subsidiary/Company Subsidiaries................................................ 2.2(b)
Company Trusts......................................................................... 2.2(p)(10)
Company 10-K........................................................................... 2.2(f)
Confidentiality Agreement.............................................................. 3.3(b)
control................................................................................ 5.9(b)
Disclosure Schedule.................................................................... 2.1(a)
ERISA.................................................................................. 2.2(p)(1)
ERISA Affiliate........................................................................ 2.2(p)(7)
excess parachute payment............................................................... 2.2(p)(10)
Exchange Act........................................................................... 1.1(b)
Extension Period....................................................................... 4.12
FDIC................................................................................... 2.2(g)
First Closing.......................................................................... 1.2(a)(1)
First Closing Date..................................................................... 1.2(a)(1)
First Closing Number................................................................... 1.2(a)(2)
First Purchase......................................................................... 1.2(a)(1)
Governmental Entities.................................................................. 1.2(a)(4)(A)
HOLA................................................................................... 2.2(d)
HSR Act................................................................................ 2.2(d)
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Incumbent Directors.................................................................... 4.2(b)(3)(C)(i)
Indemnified Parties.................................................................... 4.13(a)
Information............................................................................ 3.3(b)
Investor............................................................................... Preamble
Irrevocable Election................................................................... 2.2(p)(10)
IRS.................................................................................... 2.2(i)
Litigation Benefits.................................................................... 4.7
Losses................................................................................. 4.13(a)
LTWs................................................................................... 4.7
Material Adverse Effect................................................................ 2.1(b)
material contract...................................................................... 2.2(k)(5)
Multiemployer plan..................................................................... 2.2(p)(7)
Multiple Employer Plan................................................................. 2.2(p)(7)
New Stock.............................................................................. 4.4(a)
Nominating Committees.................................................................. 4.5(b)
Non-Control Determination.............................................................. 4.3(a)
Non-Qualifying Transaction............................................................. 4.2(b)(3)(C)(iii)
Observers.............................................................................. 4.5(b)
Offer.................................................................................. 4.2(c)(1)
Offer Notice........................................................................... 4.2(c)(1)
Offer Price............................................................................ 4.2(c)(1)
Offered Securities..................................................................... 4.2(c)(1)
OTS.................................................................................... 2.2(g)
Parent Corporation..................................................................... 4.2(b)(3)(C)(iii)
PBGC................................................................................... 2.2(p)(6)
person................................................................................. 4.2(b)(3)(C)(ii)
Preliminary Control Event.............................................................. 4.2(b)(3)(C)
Previously Disclosed................................................................... 2.1(c)
prohibited transaction................................................................. 2.2(p)(11)
Qualified Plans........................................................................ 2.2(p)(3)
Qualifying Ownership Interest.......................................................... 3.3(a)
Reference Package...................................................................... 1.1(b)
Registration Statement................................................................. 4.2(b)(5)
Rights Agreement....................................................................... 1.2(a)(4)(C)(ii)
savings and loan holding company....................................................... 4.8(b)(2)
SEC.................................................................................... 2.2(f)
Section 16(b) Period................................................................... 4.12
Second Closing......................................................................... 1.2(b)(1)
Second Closing Date.................................................................... 1.2(b)(1)
Second Closing Number.................................................................. 1.2(b)(2)
Second Purchase........................................................................ 1.2(b)(1)
Securities............................................................................. Recitals
Securities Act......................................................................... 2.2(d)
Series B Certificate................................................................... Recitals
Series B Stock/Series B Shares......................................................... Recitals
Series B Warrant Certificate........................................................... Recitals
Series B Warrants...................................................................... Recitals
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Series C Certificate................................................................... Recitals
Series C Stock/Series C Shares......................................................... Recitals
Series C Warrant Certificate........................................................... Recitals
Series C Warrant Number................................................................ 1.2(a)(2)
Series C Warrants...................................................................... Recitals
Series D Certificate................................................................... Recitals
Series D Stock/Series D Shares......................................................... Recitals
Series D Warrant Certificate........................................................... Recitals
Series D Warrants...................................................................... Recitals
single employer........................................................................ 2.2(p)(7)
SPRs Certificate....................................................................... Recitals
Stock Purchase Rights/SPRs............................................................. Recitals
subsidiary............................................................................. 5.9(a)
Surviving Corporation.................................................................. 4.2(b)(3)(C)(iii)
Total Number........................................................................... 1.1(b)
Transaction Documents.................................................................. Recitals
Transfer............................................................................... 4.2(a)
Voting Securities...................................................................... 4.2(b)(3)(C)(ii)
Warrants............................................................................... Recitals
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INVESTMENT AGREEMENT, dated as of July 6, 2000 (this "Agreement"),
between DIME BANCORP, INC., a Delaware corporation (the "Company"), and WARBURG,
▇▇▇▇▇▇ EQUITY PARTNERS, L.P., a Delaware limited partnership (the "Investor").
RECITALS:
A. The Investment. The Company intends to sell to the Investor, and
the Investor intends to purchase from the Company, as an investment in the
Company, a variety of securities as described herein. The securities to be
purchased at the first closing are:
(1) stock purchase rights (the "Stock Purchase Rights" or "SPRs") to
acquire shares of Series B junior voting preferred stock, par value $0.01
per share and liquidation preference of $0.01 per share, of the Company
("Series B Stock" or the "Series B Shares");
(2) warrants (the "Series C Warrants") to purchase shares of Series C
junior nonvoting preferred stock, par value $0.01 per share and liquidation
preference of $0.01 per share, of the Company ("Series C Stock" or the
"Series C Shares"); and
(3) warrants (the "Series D Warrants") to purchase shares of Series D
junior nonvoting preferred stock, par value $0.01 per share and liquidation
preference of $0.01 per share, of the Company ("Series D Stock" or the
"Series D Shares").
The securities to be purchased at the second closing are:
(1) Series B Shares; and
(2) Series D Warrants.
B. The Securities. The term "Securities" refers collectively to (1)
the SPRs, Series C Warrants, Series D Warrants and Series B Shares purchased
under this Agreement, and (2) any securities (including shares of common stock,
par value $0.01 per share of the Company ("Common Stock" or "Common Shares"),
Series C Shares, Series D Shares, warrants to purchase Common Shares ("Common
Warrants") and warrants to purchase Series B Shares (the "Series B Warrants")),
into which any of the foregoing are converted, exchanged or exercised in
accordance with the terms thereof and of this Agreement. When issued, the Series
B Stock, Series C Stock and Series D Stock will have the designations, relative
rights, preferences and limitations set forth in a Certificate of Designations
substantially in the form attached as Exhibit 1 (the "Series B Certificate"),
Exhibit 2 (the "Series C Certificate") and Exhibit 3 (the "Series D
Certificate"), respectively. When purchased, the SPRs,
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Series C Warrants and Series D Warrants will be evidenced by a certificate
substantially in the form attached as Exhibit 4 (the "SPRs Certificate"),
Exhibit 7 (the "Series C Warrant Certificate") and Exhibit 8 (the "Series D
Warrant Certificate"), respectively. If issued, the Common Warrants and Series B
Warrants will be evidenced by a certificate substantially in the form attached
as Exhibit 5 (the "Common Warrant Certificate") and Exhibit 6 (the "Series B
Warrant Certificate"), respectively. The Series B Warrants, Series C Warrants,
Series D Warrants and Common Warrants are collectively known as the "Warrants".
C. Transaction Documents. The term "Transaction Documents" refers
collectively to this Agreement, the Series B Certificate, the Series C
Certificate, the Series D Certificate, the SPRs Certificate, the Series B
Warrant Certificate, the Series C Warrant Certificate, the Series D Warrant
Certificate, the Common Warrant Certificate, the Black-Scholes methodology
described in Exhibit 10 and the registration-related provisions contained in
Exhibit 11.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE I
PURCHASE; CLOSINGS
1.1 Purchase. (a) On the terms and subject to the conditions set forth
herein, the Investor will purchase from the Company, and the Company will sell
to the Investor:
(1) A combination of SPRs and Series B Shares such that the aggregate
Reference Package (as defined below) of the Series B Shares subject to the
SPRs and the Series B Shares purchased directly equals the Total Number (as
defined below); and
(2) A combination of Series C Warrants and Series D Warrants such that
the aggregate Reference Package of Series C Shares and Series D Shares
subject thereto equals the Total Number.
(b) The "Total Number" equals 13,607,664 Common Shares (representing
the number of Common Shares that can be purchased for $238,134,120 at a price of
$17.50 per share); provided that (1) if the Second Closing does not occur, the
Total Number will equal the First Closing Number (as defined below) and (2) if
the sum of (A) twice the Total Number and (B) the number of Common Shares
beneficially owned by Investor as of the First Closing Date (the concept of
"beneficial ownership" having the meaning assigned thereto in Section 13(d) of
the Securities Exchange Act of 1934 (the
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"Exchange Act"), and the rules and regulations thereunder) is greater than 24.9%
of the total number of Common Shares outstanding as of the First Closing Date,
but before giving effect to the First Closing, then the Total Number will be
reduced so that such sum equals 24.9% of such number. The term "Reference
Package" as used with respect to the Series B Shares, Series C Shares or Series
D Shares has the meaning assigned in the Series B Certificate, Series C
Certificate or Series D Certificate, respectively.
1.2 Closings. The transactions contemplated hereby will occur over two
closings.
(a) First Closing.
(1) At the first closing (the "First Closing"), the Investor will
purchase from the Company, and the Company will sell to the Investor, (A)
the number of SPRs such that the aggregate Reference Package of the Series
B Shares subject to the SPRs equals the First Closing Number, (B) the
number of Series C Warrants such that the aggregate Reference Package of
Series C Shares subject thereto equals the Series C Warrant Number and (C)
the number of Series D Warrants such that the aggregate Reference Package
of (i) the Series C Shares referred to in Section 1.2(a)(1)(B) and (ii) the
Series D Shares subject to such Series D Warrants equals the First Closing
Number (the "First Purchase"). The First Closing will take place at the
offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., New York time, immediately following execution
hereof (the "First Closing Date") or at such later time as the last of the
conditions specified in Section 1.2(a)(4) is satisfied or waived.
(2) The "First Closing Number" will equal 12,009,491 Common Shares;
provided that, if the First Closing Number is greater than 9.9% of the
total number of Common Shares outstanding as of the First Closing Date,
after giving effect to the First Closing, then the First Closing Number
will be reduced so that it equals 9.9% of such number. The "Series C
Warrant Number" will equal 8,142,738 Common Shares; provided that, if the
sum of the Total Number and the Series C Warrant Number exceeds 19.9% of
the total number of Common Shares outstanding as of the First Closing Date,
before giving effect to the First Closing, the Series C Warrant Number will
be reduced so that such sum equals 19.9% of such number.
(3) Subject to the satisfaction or waiver of the conditions to the
First Closing in Section 1.2(a)(4), at the First Closing, the Company will
deliver to the Investor (A) a SPRs Certificate representing the number of
SPRs referred to in Section 1.2(a)(1)(A), a Series C Warrant Certificate
representing the number of Series C Warrants referred to in Section
1.2(a)(1)(B) and a Series D Warrant Certificate representing the number
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of Series D Warrants referred to in Section 1.2(a)(1)(C), against (B)
payment therefor by wire transfer of immediately available United States
funds to a bank account designated by the Company. The amount to be paid by
the Investor at the First Closing will be the First Closing Number
multiplied by $17.50.
(4)(A) The respective obligation of each of the Investor and the
Company to consummate the First Closing is subject to the fulfillment or
written waiver by the Investor and the Company prior to the First Closing
of the following conditions: All approvals and authorizations of, filings
and registrations with, and notifications to, all governmental or
regulatory authorities, agencies, courts, commissions or other entities,
including stock exchanges and other self-regulatory organizations
(collectively, "Governmental Entities") required for the First Purchase
shall have been obtained or made and shall be in full force and effect and
all waiting periods required by law shall have expired; and no provision of
any applicable law or regulation and no judgment, injunction, order or
decree shall prohibit the First Purchase.
(B) The obligation of the Company to consummate the First Closing is
also subject to the fulfillment or written waiver prior to the First
Closing of each of the following conditions:
(i) the representations and warranties of the Investor set forth
in this Agreement being true and correct in all material respects as
though made on and as of the First Closing Date (except that
representations and warranties that by their terms speak as of an
earlier date shall be true and correct as of such date) and the
Investor has performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
First Closing; and
(ii) the Company shall have received a certificate dated as of
the First Closing Date signed on behalf of the Investor by a senior
officer or general partner certifying compliance with Section
1.2(a)(4)(B)(i).
(C) The obligation of the Investor to consummate the First Closing is
also subject to the fulfillment or written waiver prior to the First
Closing of each of the following conditions:
(i) the representations and warranties of the Company set forth
in this Agreement being true and correct in all material respects as
though made on and as of the First Closing Date (except that
representations and warranties that by their terms speak as of an
earlier date shall be true and correct as of such date) and the
Company has performed in all material respects all
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obligations required to be performed by it under this Agreement at or
prior to the First Closing;
(ii) the Company shall have adopted an amendment to the
Stockholder Protection Rights Agreement (the "Rights Agreement"),
dated as of October 20, 1995, between the Company and The First
National Bank of Boston, as Rights Agent (as of June 23, 2000, The
Dime Savings Bank of New York, FSB is the Rights Agent under the
Rights Agreement), in substantially the form of Exhibit 9; and
(iii) the Investor shall have received a certificate dated as of
the First Closing Date signed on behalf of the Company by a senior
officer certifying compliance with Sections 1.2(a)(4)(C)(i) and (ii).
(b) Second Closing.
(1) At the second closing (the "Second Closing"), the Investor will
purchase from the Company, and Company will sell to the Investor, (A) the
number of Series B Shares such that the aggregate Reference Package thereof
equals the Second Closing Number and (B) the number of Series D Warrants
such that the aggregate Reference Package of Series D Shares subject
thereto equals the Second Closing Number (the "Second Purchase"). The
Second Closing will take place at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at a time and date as
shall be agreed upon by the parties hereto, but not later than the fifth
business day after the date of satisfaction or waiver of the last of the
conditions specified in Section 1.2(b)(4) (the "Second Closing Date").
(2) The "Second Closing Number" will equal the Total Number minus the
First Closing Number.
(3) Subject to the satisfaction or waiver of the conditions to the
Second Closing in Section 1.2(b)(4), at the Second Closing, the Company
will deliver to the Investor (A) a certificate representing the number of
Series B Shares referred to in Section 1.2(b)(1)(A) and a Series D Warrant
Certificate representing the number of Series D Warrants referred to in
Section 1.2(b)(1)(B), against (B) payment therefor by wire transfer of
immediately available United States funds to a bank account designated by
the Company. The amount to be paid by the Investor at the Second Closing
will be equal to the Second Closing Number multiplied by $17.50.
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(4) (A) The obligation of the Investor to effect the Second Closing is
subject to the fulfillment or written waiver prior to the Second Closing of
each of the following conditions:
(i) Since the First Closing Date there shall not have occurred
any change or development with respect to the Company or combination
of such changes or developments which has had or is reasonably likely
to have a Material Adverse Effect (as defined below) on the Company;
(ii) The representations and warranties contained in Sections
2.2(a), 2.2(c), 2.2(d), 2.2(f) and 2.2(g) (but, with regard to Section
2.2(g), only with respect to those Company Reports filed with the SEC)
being true and correct in all material respects as though made on and
as of the Second Closing Date (except that representations and
warranties that by their terms speak as of an earlier date shall be
true and correct as of such date) and the Company shall have performed
in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Second Closing; and
(iii) The Investor shall have received a certificate dated as of
the Second Closing Date signed on behalf of the Company by a senior
officer certifying compliance with Sections 1.2(b)(4)(A)(i) and (ii).
(B) The respective obligation of each of the Investor and the Company
to effect the Second Closing is subject to the fulfillment or written
waiver by the Investor and the Company prior to the Second Closing of the
following conditions: All approvals and authorizations of, filings and
registrations with, and notifications to, all Governmental Entities
required for the Second Purchase shall have been obtained or made and shall
be in full force and effect and all waiting periods required by law or
regulation shall have expired; and no provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit the
Second Purchase.
(5) The rights of the Investor to purchase Securities at the Second
Closing will not be affected by the occurrence of an intervening Change in
Control (as defined below), except that the Securities to be so purchased
will be adjusted to give effect to any modifications to Series B Shares and
Series D Warrants (and Securities underlying them) that are provided for
herein in relation to such Change in Control.
1.3 Interpretation. References in this Article I to a Reference Package
are to the Reference Package that would be applicable as of the date of this
Agreement (as if the Series B Stock, Series C Stock and Series D Stock had
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been issued as of such date), and references in this Article I to Securities
"subject" to any Series B Warrant, Series C Warrant or Series D Warrant are to
the Securities that could be purchased on exercise of such warrant as of the
date of this Agreement (as if the warrant had been issued as of such date);
provided that references to any Reference Package or to any Securities subject
to Warrants for purposes of Section 1.2(b) shall be subject to the antidilution
protection provisions available for the Securities to be purchased under
Section 1.2(b).
1.4 Transfer to Affiliates. The parties acknowledge that the Investor
intends to assign its rights to a portion of the Securities in accordance with
this Agreement to one or more of its Affiliate funds and may do so concurrently
with the First Closing. The parties agree to cooperate in this regard. The term
"Investor" will be deemed to include such Affiliate funds.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Disclosure. (a) On or prior to the date hereof, each of the Company
and the Investor delivered to the other a schedule ("Disclosure Schedule")
setting forth, among other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure requirement contained in
a provision hereof or as an exception to one or more representations or
warranties contained in Section 2.2 with respect to the Company, or in Section
2.3 with respect to the Investor, or to one or more of its covenants contained
in Article III; provided that the mere inclusion of an item in a Disclosure
Schedule as an exception to a representation or warranty will not be deemed an
admission by a party that such item represents a material exception or fact,
event or circumstance or that such item is reasonably likely to result in a
Material Adverse Effect.
(b) "Material Adverse Effect" means, with respect to the Investor only
clause (2) that follows, or, with respect to the Company both clauses (1) and
(2) that follow, any effect that: (1) is material and adverse to the financial
position, results of operations or business of the Company and its subsidiaries
taken as a whole, respectively; provided, however, that Material Adverse Effect,
under clause (1) or (2), shall not be deemed to include the impact of (A)
changes in generally accepted accounting principles or regulatory accounting
requirements applicable to depository institutions and their holding companies
generally, (B) changes in banking and other laws of general applicability or
interpretations thereof by Governmental Entities, (C) actions or omissions of
the Company taken with the prior written consent of the Investor in
contemplation of the transactions contemplated hereby, (D) unless a judgment
which, but for this clause (D) would have a Material Adverse Effect, has been
rendered and remains unstayed, litigation brought or threatened related to the
transactions contemplated by the Transaction Documents or the exchange offer by
North Fork Bancorporation, Inc. (it being understood that the exclusion of a
litigation in this clause (D) is not intended to preclude an assertion that a
Material Adverse Effect has occurred based on the existence of facts that are
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involved in that litigation), and (E) the effects of any general change
attributable to or resulting from changes in financial markets or in general
levels of interest rates; or (2) would materially impair the ability of either
the Investor or the Company, respectively, to perform its obligations under this
Agreement or otherwise materially threaten or materially impede the consummation
of the First Purchase or the Second Purchase and the other transactions
contemplated by this Agreement.
(c) "Previously Disclosed" with regard to a party means information set
forth on its Disclosure Schedule corresponding to the provision of this
Agreement to which such information relates; provided that information which, on
its face, reasonably should indicate to the reader that it relates to another
provision of this Agreement shall also be deemed to be Previously Disclosed with
respect to such other provision.
(d) Each party acknowledges that it is not relying upon any
representation or warranty not set forth in the Transaction Documents. Investor
acknowledges that it has conducted its own independent review and analysis of
the business, assets, condition, operation and prospects of the Company and the
Company Subsidiaries and acknowledges that it has been provided access to the
properties, premises and records of the Company and the Company Subsidiaries for
this purpose.
2.2 Representations and Warranties of the Company. Except as Previously
Disclosed, the Company represents and warrants to the Investor that as of the
date hereof:
(a) Organization and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, is duly qualified to do business and is in good standing
in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified and failure to be so
qualified would have a Material Adverse Effect on the Company and has
corporate power and authority to own its properties and assets and to carry
on its business as it is now being conducted. The Company has furnished to
the Investor true and correct copies of the Company's certificate of
incorporation and by-laws as amended through the date of this Agreement.
(b) Company's Subsidiaries. The Company has Previously Disclosed a
complete and correct list of all of its subsidiaries as of the date hereof
(individually a "Company Subsidiary" and collectively the "Company
Subsidiaries"), all shares of the outstanding capital stock of each of
which are owned directly or indirectly by the Company. No equity security
of any Company Subsidiary is or may be required to be issued by reason of
any option, warrant, scrip, preemptive right, right to subscribe to, call
or commitment of any character whatsoever relating to,
-8-
17
or security or right convertible into, shares of any capital stock of such
subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Company Subsidiary is bound to issue additional
shares of its capital stock, or any option, warrant or right to purchase or
acquire any additional shares of its capital stock. All of such shares so
owned by the Company are fully paid and nonassessable and are owned by it
free and clear of any lien, claim, charge, option, encumbrance or agreement
with respect thereto. Each Company Subsidiary is a corporation or federal
savings bank duly organized, validly existing, duly qualified to do
business and in good standing under the laws of its jurisdiction of
incorporation, and has corporate power and authority to own or lease its
properties and assets and to carry on its business as it is now being
conducted. The Company does not own beneficially, directly or indirectly,
more than 5% of any class of equity securities or similar interests of any
corporation, bank, business trust, association or similar organization, and
is not, directly or indirectly, a partner in any partnership or party to
any joint venture.
(c) Capitalization. The authorized capital stock of the Company
consists of (1) 40 million shares of preferred stock, par value $0.01 per
share (the "Company Preferred Stock"), of which no shares were outstanding
as of the date of this Agreement, and (2) 350 million shares of Common
Stock, of which not more than 109,298,503 shares were outstanding as of the
date of this Agreement. As of the date hereof, there are outstanding
options (each, a "Company Stock Option") to purchase an aggregate of not
more than 8,235,592 shares of Common Stock under the Benefit Plans (as
defined in Section 2.2(p)). The maximum number of shares of Common Stock
(assuming for this purpose that share-equivalents constitute Common Stock)
that would be outstanding as of the First Closing Date if all options,
warrants, conversion rights and other rights with respect thereto
(excluding those to be issued pursuant hereto) were exercised is not more
than 8,235,592. All of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and nonassessable. Except (A) as Previously Disclosed, (B) for the rights
granted pursuant to the Transaction Documents, (C) as described in the
Company's Rights Agreement or (D) under or pursuant to the Benefit Plans,
as of the date hereof there are no outstanding subscriptions, contracts,
conversion privileges, options, warrants, calls, preemptive rights or other
rights obligating the Company or any Company Subsidiary to issue, sell or
otherwise dispose of, or to purchase, redeem or otherwise acquire, any
shares of capital stock of the Company or any Company Subsidiary. The
Company has Previously Disclosed all shares of Company capital stock that
have been purchased, redeemed or otherwise acquired, directly or
indirectly, by the Company or any Company Subsidiary since December 31,
1999 and all dividends or
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18
other distributions have been declared, set aside, made or paid to the
stockholders of the Company since that date.
(d) Authorization. The Company has the power and authority to enter
into the Transaction Documents and to carry out its obligations hereunder
and thereunder. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the board of
directors of the Company (the "Board of Directors"). Subject to such
approvals of Governmental Entities as may be required by statute or
regulation, the Transaction Documents are valid and binding obligations of
the Company enforceable against the Company in accordance with their
respective terms.
Neither the execution, delivery and performance by the Company of the
Transaction Documents, nor the consummation of the transactions
contemplated hereby and thereby, nor compliance by the Company with any of
the provisions thereof, will (1) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Company or any Company Subsidiary under any
of the material terms, conditions or provisions of (A) its certificate of
incorporation or by-laws or (B) any material note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by
which it may be bound, or to which the Company or any Company Subsidiary or
any of the properties or assets of the Company or any Company Subsidiary
may be subject, or (2) subject to compliance with the statutes and
regulations referred to in the next paragraph, materially violate any
statute, rule or regulation or, to the knowledge of the Company, any
judgment, ruling, order, writ, injunction or decree applicable to the
Company or any Company Subsidiary or any of their respective properties or
assets.
Other than in connection or in compliance with the provisions of (1)
the Securities Act of 1933 and the rules and regulations thereunder (the
"Securities Act"), and the securities or blue sky laws of the various
states and (2) in connection with the Second Closing only, the Home Owners'
Loan Act ("HOLA") or the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 ("HSR Act"), no notice to, filing with, exemption or review by, or
authorization, consent or approval of, any Governmental Entity is necessary
for the consummation by the
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19
Company of the transactions contemplated by the Transaction Documents.
(e) Knowledge as to Conditions. As of the date of this Agreement, the
Company knows of no reason why any regulatory approvals and, to the extent
necessary, any other approvals, authorizations, filings, registrations, and
notices required or otherwise a condition to the consummation of the
transactions contemplated by the Transaction Documents cannot, or should
not, be obtained.
(f) Company Financial Statements. The consolidated balance sheets of
the Company and its subsidiaries as of December 31, 1999 and 1998 and
related consolidated statements of income, stockholders' equity and cash
flows for the three years ended December 31, 1999, together with the notes
thereto, certified by KPMG LLP and included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999 (the "Company
10-K") as filed with the Securities and Exchange Commission (the "SEC"),
and the unaudited consolidated balance sheets of the Company and its
subsidiaries as of March 31, 2000 and related consolidated statements of
income, stockholders' equity and cash flows for the quarter then ended,
included in the Company's Quarterly Report on Form 10-Q for the period
ended March 31, 2000 (collectively, the "Company Financial Statements")
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis and present fairly the
consolidated financial position of the Company and its subsidiaries at the
dates and the consolidated results of operations and cash flows of the
Company and its subsidiaries for the periods stated therein (subject to the
absence of notes and year-end audit adjustments in the case of interim
unaudited statements).
(g) Reports. Since December 31, 1995, the Company and each Company
Subsidiary have filed all material reports, registrations and statements,
together with any required amendments thereto, that it was required to file
with (1) the SEC, including, but not limited to, Forms 10-K, Forms 8-K,
Forms 10-Q and proxy statements and any documents incorporated by reference
therein, (2) the Office of Thrift Supervision (the "OTS"), (3) the Federal
Deposit Insurance Corporation (the "FDIC") and (4) any applicable state
securities or banking authorities. All such reports and statements filed
with any such regulatory body or authority are collectively referred to
herein as the "Company Reports". As of their respective dates, the Company
Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the OTS, the FDIC and applicable state
securities or banking authorities, as the case may be. Copies of all the
Company Reports have been made available to the Investor by the Company.
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20
(h) Properties and Leases. To the extent reflected in the Company
Financial Statements, except for any lien for current taxes not yet
delinquent, the Company and each Company Subsidiary have good title free
and clear of any material liens, claims, charges, options, encumbrances or
similar restrictions to all the real and personal property reflected in the
Company's consolidated balance sheet as of December 31, 1999 included in
the Company 10-K for the period then ended, and all real and personal
property acquired since such date, except such real and personal property
as has been disposed of in the ordinary course of business. Except as is
not reasonably likely to have a Material Adverse Effect on the Company, all
leases of real property and all other leases material to the Company or any
Company Subsidiary pursuant to which the Company or such Company
Subsidiary, as lessee, leases real or personal property are valid and
effective in accordance with their respective terms, and there is not,
under any such lease, any material existing default by the Company or such
Company Subsidiary or any event which, with notice or lapse of time or
both, would constitute such a material default.
(i) Taxes. Each of the Company and the Company Subsidiaries has filed
all material federal, state, county, local and foreign tax returns,
including information returns, required to be filed by it, and paid all
material taxes owed by it, including those with respect to income,
withholding, social security, unemployment, workers compensation,
franchise, ad valorem, premium, excise and sales taxes, and no taxes shown
on such returns to be owed by it or assessments received by it are
delinquent. The federal income tax returns of the Company and the Company
Subsidiaries for the fiscal year ended December 31, 1995, and for all
fiscal years prior thereto, are for the purposes of routine audit by the
Internal Revenue Service (the "IRS") closed because of the statute of
limitations, and no claims for additional taxes for such fiscal years are
pending. Neither the Company nor any Company Subsidiary is a party to any
pending action or proceeding, nor to the Company's knowledge is any such
action or proceeding threatened by any Governmental Entity, for the
assessment or collection of taxes, interest, penalties, assessments or
deficiencies that could reasonably be likely to have a Material Adverse
Effect on the Company and no issue has been raised by any federal, state,
local or foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of the Company or
any Company Subsidiary which has not been settled, resolved and fully
satisfied, or adequately reserved for (other than those issues that are not
reasonably likely to have a Material Adverse Effect on the Company). Except
as is not reasonably likely to have a Material Adverse Effect on the
Company, each of the Company and the Company Subsidiaries has withheld all
taxes that it is required to withhold from amounts owing to employees,
creditors or other third parties.
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21
(j) No Material Adverse Effect. Since December 31, 1999, no change has
occurred and no circumstances exist which have had or are reasonably likely
to have a Material Adverse Effect on the Company, except as disclosed in
the Company Reports filed before the date of this Agreement by it with the
SEC since December 31, 1999.
(k) Commitments and Contracts. The Company has Previously Disclosed
each of the following to which the Company or any Company Subsidiary is a
party or subject (whether written or oral, express or implied):
(1) any employment contract or understanding (including any
understandings or obligations with respect to severance or termination
pay, liabilities or fringe benefits) with any present or former
officer, director, employee or consultant (other than those that are
terminable at will by the Company or such Company Subsidiary);
(2) any plan, contract or understanding providing for any bonus,
pension, option, deferred compensation, retirement payment, profit
sharing or similar arrangement with respect to any present or former
officer, director, employee or consultant;
(3) any labor contract or agreement with any labor union;
(4) any contract containing covenants that limit the ability of
the Company or any Company Subsidiary to compete in any line of
business or with any person or which involve any restriction of the
geographical area in which, or method by which or with whom, the
Company or any Company Subsidiary may carry on its business (other
than as may be required by law or applicable regulatory authorities);
(5) any other contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of Regulation S-K;
(6) any real property lease and any other lease with annual
rental payments aggregating $20,000,000 or more;
(7) any agreement or commitment with respect to the Community
Reinvestment Act with any state or federal bank regulatory authority;
or
(8) any agreement, contract or understanding with any current or
former director, officer, employee, consultant, financial adviser,
broker, dealer, or agent providing for any rights of indemnification
in favor of such person or entity.
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22
(l) Litigation and Other Proceedings. There is no pending or, to
the knowledge of the Company, threatened, claim, action, suit,
investigation or proceeding, against the Company or any Company
Subsidiary, nor is the Company or any Company Subsidiary subject to
any order, judgment or decree, except for matters that have not had a
Material Adverse Effect or are not reasonably likely to have a
Material Adverse Effect.
(m) Insurance. The Company and each Company Subsidiary is
presently insured, and during each of the past five calendar years (or
during such lesser period of time as the Company has owned such
Company Subsidiary) has been insured, for reasonable amounts with
financially sound and reputable insurance companies against such risks
as companies engaged in a similar business would, in accordance with
good business practice, customarily be insured.
(n) Compliance with Laws. The Company and each Company Subsidiary have
all permits, licenses, authorizations, orders and approvals of, and
have made all filings, applications and registrations with,
Governmental Entities that are required in order to permit them to own
or lease their properties and assets and to carry on their business as
presently conducted and that are material to the business of the
Company or such Company Subsidiary; and all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of the Company, no suspension or
cancellation of any of them is threatened, and all such filings,
applications and registrations are current. Except as is not
reasonably likely to have a Material Adverse Effect on the Company,
(A) the conduct by the Company and each Company Subsidiary of their
business and the condition and use of their properties does not
violate or infringe any applicable domestic (federal, state or local)
or foreign law, statute, ordinance, license or regulation, and (B)
neither the Company nor any Company Subsidiary is in default under any
order, license, regulation, demand, writ, injunction or decree of any
Governmental Entity. Except for statutory or regulatory restrictions
of general application to savings and loan holding companies, no
Governmental Entity has placed any restriction on the business or
properties of the Company or any Company Subsidiary that is reasonably
likely to have a Material Adverse Effect on the Company.
(o) Labor. No work stoppage involving the Company or any Company
Subsidiary is pending or, to the knowledge of the Company, threatened.
Neither the Company nor any Company Subsidiary is involved in, or
threatened with or affected by, any labor dispute, arbitration,
lawsuit or administrative proceeding that could materially and
adversely affect the business of the Company or such Company
Subsidiary. Employees of the Company and the Company Subsidiaries
-14-
23
are not represented by any labor union nor are any collective bargaining
agreements otherwise in effect with respect to such employees.
(p) Company Benefit Plans.
(1) The Company has Previously Disclosed a complete list of
all employee benefit plans, programs, policies, practices, or other
arrangements providing benefits to any current or former employee, officer
or director of the Company or any Company Subsidiary or any beneficiary or
dependent thereof that is sponsored or maintained by the Company or any
Company Subsidiaries or to which the Company or any Company Subsidiary
contributes or is obligated to contribute, whether or not written,
including any employee welfare benefit plan within the meaning of Section
3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), any employee pension benefit plan within the meaning of Section
3(2) of ERISA (whether or not such plan is subject to ERISA) and any bonus,
incentive, deferred compensation, vacation, stock purchase, stock option,
severance, employment, change of control, consulting or fringe benefit
plan, program, agreement or policy ("Benefit Plan").
(2) With respect to each Benefit Plan, the Company has
delivered or made available to the Investor a true, correct and complete
copy of: (A) each writing constituting a part of such Benefit Plan,
including all agreements, plan documents, employee communications, benefit
schedules, trust agreements, and insurance contracts and other funding
vehicles; (B) the most recent Annual Report (Form 5500 Series) and
accompanying schedule, if any; (C) the current summary plan description and
any material modifications thereto, if any (in each case, whether or not
required to be furnished under ERISA); (D) the most recent actuarial
report, if any; and (E) the most recent determination letter from the IRS,
if any. Except as specifically provided in the foregoing documents
delivered or made available to the Investor, there are no amendments to any
Benefit Plan that have been adopted or approved nor has the Company or any
Company Subsidiary undertaken to make any such amendments or to adopt or
approve any new Benefit Plan.
(3) The Company has Previously Disclosed each Benefit Plan
that is intended to be a "qualified plan" ("Qualified Plans") within the
meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"). The Internal Revenue Service has issued a favorable
determination letter with respect to each Qualified Plan and the related
trust that has not been revoked, and there are no circumstances and no
events have occurred that could adversely affect the qualified status of
any Qualified Plan or the related trust. No
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Benefits Plan is intended to meet the requirements of Code Section
501(c)(9).
(4) All contributions required to be made to any Benefit
Plan by applicable law or regulation or by any plan document, and all
premiums due or payable with respect to insurance policies funding any
Benefit Plan, for any period through the date hereof have been timely made
or paid in full or, to the extent not required to be made or paid on or
before the date hereof, have been fully reflected on the financial
statements.
(5) With respect to each Benefit Plan, the Company and the
Company Subsidiaries have complied, and are now in compliance, in all
material respects, with all provisions of ERISA, the Code and all laws and
regulations applicable to such Benefit Plans. Each Benefit Plan has been
administered in all material respects in accordance with its terms. There
is not now, nor do any circumstances exist that are likely to give rise to,
any requirement for the posting of security with respect to a Benefit Plan
or the imposition of any lien on the assets of the Company or any Company
Subsidiary under ERISA or the Code.
(6) With respect to each Benefit Plan that is subject to
Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code: (A)
there does not exist any accumulated funding deficiency within the meaning
of Section 412 of the Code or Section 302 of ERISA, whether or not waived;
(B) the fair market value of the assets of such Benefit Plan equals or
exceeds the actuarial present value of all accrued benefits under such
Benefit Plan (whether or not vested), based upon the actuarial assumptions
used to prepare the most recent actuarial report for such Benefit Plan; (C)
no reportable event within the meaning of Section 4043(c) of ERISA for
which the 30-day notice requirement has not been waived has occurred, and
the consummation of the transactions contemplated by this Agreement will
not result in the occurrence of any such reportable event; (D) all premiums
to the Pension Benefit Guaranty Corporation (the "PBGC") have been timely
paid in full; (E) no liability (other than for premiums to the PBGC) under
Title IV of ERISA has been or is expected to be incurred by the Company or
any Company Subsidiary; and (F) the PBGC has not instituted proceedings to
terminate any such Benefit Plan and, to the Company's knowledge, no
condition exists that presents a risk that such proceedings will be
instituted or which would constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
such Benefit Plan.
(7) No Benefit Plan is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan
that has two or more contributing sponsors at least two of whom are not
-16-
25
under common control, within the meaning of Section 4063 of ERISA (a
"Multiple Employer Plan"). None of the Company and the Company Subsidiaries
nor any entity, trade or business, whether or not incorporated, which
together with the Company and the Company Subsidiaries would be deemed a
"single employer" within the meaning of Section 4001 of ERISA or Sections
414(b), (c), (m) or (o) of the Code (an "ERISA Affiliate") has, at any time
during the last six years, contributed to or been obligated to contribute
to any Multiemployer Plan or Multiple Employer Plan. None of the Company
and the Company Subsidiaries nor any of their respective ERISA Affiliates
has incurred any withdrawal liability as a result of a complete or partial
withdrawal from a Multiemployer Plan, as those terms are defined in Part I
of Subtitle E of Title IV of ERISA, that has not been satisfied in full.
(8) There does not now exist, nor do any circumstances exist
that could result in, any liability (A) under Title IV or Section 302 of
ERISA, (B) under Sections 412 and 4971 of the Code and (C) as a result of a
material failure to comply with the continuation coverage requirements of
Section 601 et seq. of ERISA and Section 4980B of the Code, that would be a
liability of the Company and any Company Subsidiary or any of their
respective ERISA Affiliates, other than such liabilities that have been
Previously Disclosed. Without limiting the generality of the foregoing,
neither the Company nor any Company Subsidiary, nor any of their respective
ERISA Affiliates, has engaged in any transaction described in Section 4069
or Section 4204 or 4212 of ERISA.
(9) The Company and the Company Subsidiaries have no
liability for life, health, medical or other welfare benefits to former
employees or beneficiaries or dependents thereof, except for health
continuation coverage as required by Section 4980B of the Code or Part 6 of
Title I of ERISA and at no expense to the Company and the Company
Subsidiaries. The Company and each Company Subsidiary have reserved the
right to amend, terminate or modify at any time all plans or arrangements
providing for retiree health or life insurance coverage.
(10) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (A)
result in any material payment (including, without limitation, severance,
unemployment compensation, "excess parachute payment" (within the meaning
of Section 280G of the Code), forgiveness of indebtedness or otherwise)
becoming due to any current or former employee, officer or director of the
Company or any Company Subsidiary from the Company or any Company
Subsidiary under any Benefit Plan or otherwise, (B) materially increase any
benefits otherwise payable under any Benefit Plan, (C) result in any
acceleration of the time of payment or vesting of
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26
any such benefits, (D) require the funding or increase in the funding of
any such benefits or (E) result in any limitation on the right of the
Company or any Company Subsidiary to amend, merge, terminate or receive a
reversion of assets from any Benefit Plan or related trust. Neither the
Company nor any Company Subsidiary has taken, or permitted to be taken, any
action that required, and no circumstances exist that will require the
funding, or increase in the funding, of any benefits or resulted, or will
result, in any limitation on the right of the Company or any Company
Subsidiary to amend, merge, terminate or receive a reversion of assets from
any Benefit Plan or related trust. Neither the Company nor any Company
Subsidiary has made an "Irrevocable Election" within the meaning of the
trust agreements between the Company, The Dime Savings Bank of New York and
HSBC Bank USA (the "Company Trusts"). The funding of the Company Trusts has
not resulted in any material diminution of the regulatory capital of The
Dime Savings Bank of New York.
(11) None of the Company and the Company Subsidiaries nor
any other person, including any fiduciary, has engaged in any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of
ERISA), which could subject the Company, any Company Subsidiary or any
person that the Company or any Company Subsidiary has an obligation to
indemnify, to any material tax or penalty imposed under Section 4975 of the
Code or Section 502 of ERISA.
(12) There are no pending or threatened claims (other than
claims for benefits in the ordinary course), lawsuits or arbitrations which
have been asserted or instituted, and, to the Company's knowledge, no set
of circumstances exists which may reasonably give rise to a claim or
lawsuit, against the Benefit Plans, any fiduciaries thereof with respect to
their duties to the Benefit Plans or the assets of any of the trusts under
any of the Benefit Plans which could reasonably be expected to result in
any material liability of the Company or any Company Subsidiary.
(q) Brokers and Finders. Neither the Company nor any Company
Subsidiary nor any of their respective officers, directors or employees has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder's fees, and no broker
or finder has acted directly or indirectly for the Company or any Company
Subsidiary, in connection with the Transaction Documents or the
transactions contemplated hereby and thereby.
(r) No Defaults. Neither the Company nor any Company Subsidiary is in
default, nor has any event occurred that, with the passage of time or the
giving of notice, or both, would constitute a default, under any material
agreement, indenture, loan agreement or other instrument to which it is a
party or by which it or any of its assets
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27
is bound or to which any of its assets is subject, the result of which is
reasonably likely to have a Material Adverse Effect on the Company. To the
Company's knowledge, all parties with whom the Company or any Company
Subsidiary has material leases, agreements or contracts or who owe to the
Company or any Company Subsidiary material obligations other than those
arising in the ordinary course of the banking business of the Company
Subsidiaries are in compliance therewith in all material respects.
(s) Environmental Liability. There is no legal, administrative, or
other proceeding, claim or action of any nature seeking to impose, or that
could result in the imposition of, on the Company or any Company
Subsidiary, any liability relating to the release of hazardous substances
as defined under any local, state or federal environmental statute,
regulation or ordinance, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (the
"CERCLA"), pending or, to the Company's knowledge, threatened against the
Company or any Company Subsidiary the result of which has had or could
reasonably be expected to have a Material Adverse Effect on the Company; to
the Company's knowledge, there is no reasonable basis for any such
proceeding, claim or action; and to the Company's knowledge, neither the
Company nor any Company Subsidiary is subject to any agreement, order,
judgment or decree by or with any court, Governmental Entity or third party
imposing any such environmental liability.
(t) Anti-takeover Provisions Not Applicable. The provisions of Section
203 of the Delaware General Corporation Law as they relate to the Company
do not and will not apply to the Transaction Documents or to any of the
transactions contemplated hereby or thereby.
(u) Rights Agreement Amendment. The Rights Agreement has been duly and
validly amended as set forth in Exhibit 9 and such amendment is in full
force and effect.
2.3 Representations and Warranties of the Investor. Except as
Previously Disclosed, the Investor hereby represents and warrants to the Company
that as of the date hereof:
(a) Organization and Authority. The Investor is a limited partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, is duly qualified to do business and is
in good standing in all jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified and
failure to be so qualified would have a Material Adverse Effect on the
Investor and has partnership power and authority to own
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28
its properties and assets and to carry on its business as it is now being
conducted. The Investor has furnished the Company with a true and correct
copy of its certificate of limited partnership through the date of this
Agreement.
(b) Authorization. The Investor has the partnership power and
authority to enter into the Transaction Documents and to carry out its
obligations hereunder and thereunder. The execution, delivery and
performance of the Transaction Documents by the Investor and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by the Investor's partnership and no further approval or
authorization by any of the partners is required. Subject to such approvals
of Governmental Entities as may be required by statute or regulation, the
Transaction Documents are valid and binding obligations of the Investor
enforceable against the Investor in accordance with their respective terms.
Neither the execution, delivery and performance by the Investor of the
Transaction Documents, nor the consummation of the transactions
contemplated hereby and thereby, nor compliance by the Investor with any of
the provisions thereof, will (1) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Investor under any of the material terms,
conditions or provisions of (A) its certificate of limited partnership or
partnership agreement or (B) any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation
to which the Investor is a party or by which it may be bound, or to which
the Investor or any of the properties or assets of the Investor may be
subject, or (2) subject to compliance with the statutes and regulations
referred to in the next paragraph, materially violate any statute, rule or
regulation or, to the knowledge of the Investor, any judgment, ruling,
order, writ, injunction or decree applicable to the Investor or any of
their respective properties or assets.
Other than in connection or in compliance with the provisions of (1)
the Securities Act and the securities or blue sky laws of the various
states and (2) in connection with the Second Closing only, HOLA or the HSR
Act, no notice to, filing with, exemption or review by, or authorization,
consent or approval of, any Governmental Entity is necessary for the
consummation by the Investor of the transactions contemplated by the
Transaction Documents.
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(c) Knowledge as to Conditions. As of the date of this Agreement, it
knows of no reason why any regulatory approvals and, to the extent
necessary, any other approvals, authorizations, filings, registrations, or
notices required or otherwise a condition to the consummation of the
transactions contemplated by the Transaction Documents cannot, or should
not, be obtained. The Investor, based on advice of counsel, believes that
no approval from the OTS is required by applicable law or regulation to
consummate the First Purchase and it knows of no reason why it cannot
obtain any required approval or Non-Control Determination (as defined in
Section 4.3(a)) from the OTS for the Second Purchase or the exercise of any
of the Warrants.
(d) Purchase for Investment. The Investor acknowledges that the
Securities have not been registered under the Securities Act or under any
state securities laws. The Investor (1) is acquiring the Securities
pursuant to an exemption from registration under the Securities Act solely
for investment with no present intention to distribute any of the
Securities to any person, (2) will not sell or otherwise dispose of any of
the Securities, except in compliance with the registration requirements or
exemption provisions of the Securities Act and any other applicable
securities laws, (3) has such knowledge and experience in financial and
business matters and in investments of this type that it is capable of
evaluating the merits and risks of its investment in the Securities and of
making an informed investment decision and (4) is an Accredited Investor
(as that term is defined by Rule 501 of the Securities Act).
(e) Financial Capability. The Investor will have available funds to
make the Second Purchase on the terms and conditions contemplated by this
Agreement.
(f) Ownership. Other than the Securities, upon consummation of the
Second Closing, the Investor, together with any person with which the
Investor constitutes a group or single person (as defined for purposes of
Section 13(d) of the Exchange Act) will not beneficially own more than
25,000 Common Shares. Based on 109,298,503 Common Shares outstanding and a
maximum Reference Package (for all series of preferred stock to be issued
hereunder) of 27,215,328 Common Shares, the total number of shares
beneficially owned by the Investor and such persons represents less than
24.99% of the outstanding Common Shares (assuming full exercise of the
Warrants and conversion rights, whether or not now exercisable).
(g) Brokers and Finders. Neither the Investor nor its Affiliates or
any of their respective officers, directors or employees has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees, and no broker or finder has
acted directly or indirectly for the Investor, in connection with the
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Transaction Documents or the transactions contemplated hereby and thereby.
ARTICLE III
COVENANTS
3.1 Filings; Other Actions. (a) Each of the Investor and the Company
will cooperate and consult with the other and use reasonable best efforts to
prepare and file all necessary documentation, to effect all necessary
applications, notices, petitions, filings and other documents, and to obtain all
necessary permits, consents, orders, approvals and authorizations of, or any
exemption by, all third parties and Governmental Entities necessary or advisable
to consummate the transactions contemplated by this Agreement. In particular,
the Investor will use its reasonable best efforts to obtain, and the Company
will use its reasonable best efforts to help the Investor obtain, as promptly as
practicable, all approvals, authorizations, consents or exemptions from all
necessary Governmental Entities, including the OTS, the Federal Trade Commission
and the Antitrust Division of the Department of Justice, for the transactions
contemplated by the Transaction Documents, the Second Purchase and the exercise
of any of the Warrants, including, but not limited to, (1) together with any
required Affiliate of it, the entering into, execution and compliance with a
rebuttal of control agreement required by the OTS pursuant to 12 C.F.R. Section
574.100 and (2) any approvals (and applicable waiting period) required under the
HSR Act. Each of the Investor and the Company will have the right to review in
advance, and to the extent practicable each will consult with the other, in each
case subject to applicable laws relating to the exchange of information, with
respect to all the information relating to the other party, and any of their
respective subsidiaries, which appears in any filing made with, or written
materials submitted to, any third party or any Governmental Entity in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable. Each party hereto agrees to keep the other party
apprised of the status of matters relating to completion of the transactions
contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with
all information concerning itself, its subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any statement, filing, notice or application made by or on
behalf of such other party or any of its subsidiaries to any Governmental Entity
in connection with the First Purchase, the Second Purchase and the other
transactions contemplated by the Transaction Documents.
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(c) The Company agrees to use its reasonable best efforts to obtain,
prior to September 30, 2002, the approval of its stockholders contemplated by
Section 1.3 of the Series D Warrant Certificate.
3.2 Expenses. Each of the parties will bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated under the Transaction Documents including fees and expenses of its
own financial or other consultants, investment bankers, accountants and counsel;
provided that the Company will reimburse the Investor for all documented
expenses reasonably incurred by it through the Second Closing in due diligence,
the negotiation and preparation of the Transaction Documents and undertaking of
the transactions contemplated by the Transaction Documents (including reasonable
fees and expenses of counsel) up to a maximum amount of $3.5 million.
3.3 Access, Information and Confidentiality.
(a) From the date hereof until the date when the Securities owned by
the Investor represent less than 5% of the outstanding Common Shares (calculated
in accordance with the proviso to Section 4.4(a)) (the "Qualifying Ownership
Interest"), the Company will ensure that upon reasonable notice, the Company and
its subsidiaries will afford to Investor and its representatives (including,
without limitation, officers and employees of the Investor, and counsel,
accountants and other professionals retained by the Investor) such access during
normal business hours to its books, records (including, without limitation, tax
returns and appropriate work papers of independent auditors under normal
professional courtesy), properties and personnel and to such other information
as Investor may reasonably request.
(b) Each party to this Agreement will hold, and will cause its
respective subsidiaries and their directors, officers, employees, agents,
consultants and advisors to hold, in strict confidence, unless disclosure to a
bank regulatory authority is necessary or desirable in connection with any
necessary regulatory approval or unless compelled to disclose by judicial or
administrative process or, in the written opinion of its counsel, by other
requirement of law or the applicable requirements of any regulatory agency or
relevant stock exchange, all non-public records, books, contracts, instruments,
computer data and other data and information (collectively, "Information")
concerning the other party furnished to it by such other party or its
representatives pursuant to this Agreement (except to the extent that such
information can be shown to have been (1) previously known by such party on a
non-confidential basis, (2) in the public domain through no fault of such party
or (3) later lawfully acquired from other sources by the party to which it was
furnished), and neither party shall release or disclose such Information to any
other person, except its auditors, attorneys, financial advisors, other
consultants and advisors and, to the extent permitted above, to bank regulatory
authorities. In addition, all information furnished to Investor and its
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representatives and all analyses, compilations, data, studies or other documents
prepared by Investor or its representatives containing or based in whole or in
part on any such furnished information or reflecting Investor's review of, or
interest in, the Company shall be used solely as set forth and permitted by the
Confidentiality Agreement, dated as of May 22, 2000, between the Company and the
Investor (the "Confidentiality Agreement").
3.4 Obligations. The Company agrees to honor all obligations under its
material contracts (defined for purposes of this Section 3.4 as contracts
required to be filed pursuant to Item 601(b)(10) of the SEC's Regulation S-K),
the breach of which would materially and adversely affect the management or
operations of the Company.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Standstill Agreement. The Investor agrees that until the third
anniversary of the First Closing Date, without the prior approval of the
Company, the Investor will not, directly or indirectly, through its Affiliates
or associates or any other persons, or in concert with any person,
(a) purchase or otherwise acquire beneficial ownership other than
solely as a result of the exercise of any rights set forth in the
Securities or in this Agreement (as defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act) of any Common Shares, or securities convertible
into or exchangeable for Common Shares, that would result in the Investor
or its Affiliates having control of the Company within the meaning of HOLA
or having beneficial ownership of more than 24.9% of the outstanding shares
of voting stock or Common Stock of the Company (after giving effect to the
repurchase of Common Stock contemplated by the Company in connection with
this Agreement and discussed with the Investor); or
(b) undertake any action that violates or breaches any rebuttal of
control agreement it and/or its Affiliates enters into with the OTS (or any
substitute or successor agreement) or seek an amendment or other
modification to such agreement without reasonable prior written notice to
the Company describing the amendment sought in reasonable detail.
4.2 Transfer Restrictions.
(a) Restrictions on Transfer. Except as otherwise expressly permitted
in this Agreement, the Investor will not, directly or indirectly, transfer,
sell, assign, pledge, convey, hypothecate or otherwise encumber or dispose of
("Transfer") any Securities.
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(b) Permitted Transfers. (1) Notwithstanding Sections 4.2(a), 4.2(b)(2)
and 4.2(c), the Investor shall be permitted to Transfer any portion or all of
its Securities at any time under the following circumstances:
(A) Transfers to any Affiliate of the Investor, but only if the
transferee agrees in writing for the benefit of the Company to be bound by
the terms of this Agreement; provided that such Affiliate shall be
permitted to own such Securities only so long as such Affiliate shall
remain an Affiliate of the Investor; and provided further that no such
Transfer shall relieve the Investor of its obligations under this
Agreement;
(B) Transfers pursuant to a tender offer or exchange offer or
acquisition of control of the Company or similar transaction, at any time
following the time at which the Company has publicly announced or otherwise
disclosed to the Investor that (x) the Board of Directors of the Company
does not oppose such transaction or (y) that all conditions to such tender
or exchange offer's being a "Qualifying Offer" (as defined in the Rights
Agreement, as amended) have been satisfied;
(C) Transfers pursuant to a tender offer or exchange offer on a pro
rata basis with the other stockholders of the Company; provided that prior
to any tender by the Investor pursuant to this clause (C), the offeror has
announced that at least 60% of the aggregate number of shares sought in
such tender or exchange offer (other than the pro rata portion attributable
to the Investor) have been tendered into such offer; or
(D) Transfers of any Securities, in the event that the receipt of
approval, non-objection or early termination required under the HSR Act for
the conversion of the SPRs has not been received (other than as a result of
a breach by the Investor of this Agreement) on or before the date six
months after the First Closing Date.
In order to facilitate the Transfers into a tender or exchange offer permitted
by clause (B) or (C), the Company agrees, to the fullest extent legally
permitted, to effect an exchange or conversion of shares of Series B Stock or
(so long as to do so would not require a stockholders' vote) Series C Stock into
underlying shares of Common Stock equal to the applicable Reference Package.
(2) Subject to Section 4.2(b)(1) and subject to the Company's rights
under Section 4.2(c) but notwithstanding Section 4.2(a):
(A) after the first anniversary of the First Closing Date, the
Investor may Transfer Securities; provided that, after any such Transfers,
the Investor continues to own at least 80% of each of (i) the Common Shares
issued on conversion of the Series B Shares subject to the SPRs
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described in Section 1.2(a)(1)(A) and the Series B Shares described in
Section 1.2(b)(2)(A) (treating any unconverted Series B Shares as having
been converted at the time of determination) and (ii) the Common Shares
ultimately referenced by the Warrants referred to in Sections 1.2(a)(1)(B),
1.2(a)(1)(C) and 1.2(b)(1)(B) (or any Warrants issued in exchange
therefor), such reference to be determined on the basis of the Common
Shares issuable on exercise of such Warrants under the following
assumptions: (1) that any unexercised Warrants are exercised at the time of
determination, (2) that any unconverted Series B Shares or Series C Shares
issued or issuable on the exercise of such Warrants are converted at the
time of determination and (3) that any Series D Shares issued or issuable
on exercise of any Series D Warrants (that have not been exchanged for
Series B Warrants or Common Warrants) are convertible into the Common
Shares that constitute the Reference Package of the Series D Stock at the
time of determination and that the Series D Shares are converted at such
time;
(B) after the second anniversary of the First Closing Date, the
Investor may Transfer Securities; provided that, after any such Transfers
(and taking into account Transfers permitted under Section 4.2(b)(2)(A)
above), the Investor continues to own at least 50% of each of (i) the
Common Shares referred to in clause (i) of the proviso to Section
4.2(b)(2)(A) and (ii) the Common Shares referred to in clause (ii) of the
proviso to Section 4.2(b)(2)(A); and
(C) after the third anniversary of the First Closing Date, the
Investor may Transfer any Securities it then owns.
(3) Subject to the Company's rights under Section 4.2(c), the
restrictions on Transfers in Section 4.2(a) will expire should any of the
following events occur:
(A) The Board of Directors of the Company approves a complete release
of the Investor from the restrictions in Section 4.2(a).
(B) The Company materially breaches any of its covenants contained in
Article III or Article IV and such breach is not cured to the Investor's
reasonable satisfaction within 30 days of the Investor providing the
Company with written notice thereof.
(C) The Company (x) executes definitive documentation for a
transaction or (y) recommends that stockholders tender in response to a
tender or exchange offer that upon consummation will result in a Change in
Control (as defined below) of the Company or a Change in Control has been
consummated (any of the foregoing, a "Preliminary Control Event"). For
purposes of this Agreement, a "Change in Control"
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means, with respect to the Company, the occurrence of any one of the
following events:
(i) individuals who, on the date of this Agreement constitute the
Board of Directors of the Company (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board of
Directors; provided that any person becoming a director subsequent to
the date of this Agreement whose election or nomination for election
was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board of Directors (either by a specific vote or
by approval of the proxy statement of the relevant party in which such
person is named as a nominee for director, without written objection
to such nomination) shall be an Incumbent Director (except that no
individuals who were not directors at the time any agreement or
understanding with respect to any Business Combination (as defined
below) or contested election is reached shall be treated as Incumbent
Directors for the purposes of clause (y) of paragraph (iii) below with
respect to such Business Combination or this paragraph in the case of
a contested election); and provided further that the Board
Representative (as defined in Section 4.5(a)) will be treated as an
Incumbent Director even if the person designated to be such Board
Representative should change;
(ii) any "person" (as defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
is or becomes a "beneficial owner" (as defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly, of securities
of the Company representing more than 35% of the aggregate voting
power of the Company's then outstanding securities eligible to vote
for the election of directors (the "Voting Securities"); provided,
however, that the event described in this paragraph (ii) will not be
deemed a Change in Control by virtue of any holdings or acquisitions:
(w) by the Company or any of its subsidiaries, (x) by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any of its subsidiaries; provided that such holdings or
acquisitions by any such plan (other than any plan maintained under
Section 401(k) of the Code) do not exceed 25% of the then outstanding
Voting Securities, (y) by any underwriter temporarily holding
securities pursuant to an offering of such securities or (z) pursuant
to a Non-Qualifying Transaction (as defined in paragraph (iii) below);
(iii) the consummation of a merger, consolidation, statutory
share exchange or similar transaction that requires adoption by the
Company's stockholders (a "Business Combination"), unless immediately
following such Business Combination: (x) more than
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50% of the total voting power of the corporation resulting from such
Business Combination (the "Surviving Corporation"), or, if applicable,
the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to
elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by Voting Securities that were
outstanding immediately before such Business Combination (or, if
applicable, is represented by shares into which such Voting Securities
were converted pursuant to such Business Combination), and (y) at
least a majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business
Combination were Incumbent Directors at the time the Company's Board
of Directors approved the execution of the initial agreement providing
for such Business Combination (any Business Combination which
satisfies all of the criteria specified in (x) and (y) above will be
deemed a "Non-Qualifying Transaction"); or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or
substantially all of the Company's assets.
(D) The Second Closing does not occur as a result of the failure to
satisfy the condition set forth in Section 1.2(b)(4)(A)(ii).
Notwithstanding the foregoing, a Change in Control of the Company will not be
deemed to occur solely because any person acquires beneficial ownership of more
than 35% of the Voting Securities as a result of the acquisition of Voting
Securities by the Company that reduces the number of Voting Securities
outstanding; provided that, if after such acquisition by the Company such person
becomes the beneficial owner of additional Voting Securities that increases the
percentage of outstanding Voting Securities beneficially owned by such person, a
Change in Control of the Company will then occur.
(4) Notwithstanding the Transfers permitted by this Section 4.2(b),
other than Transfers described in Section 4.2(b)(1)(B) or (C) or Transfers
effected after consummation of a Change in Control, the Investor will not, at
any time, knowingly Transfer (it being understood that the Investor generally
will not have knowledge of security ownership of its limited partners to whom it
may make distributions in the ordinary course of business) any of the Securities
to (A) any bank or thrift institution, or any entity that is an Affiliate of a
bank or thrift institution, if after such Transfer such bank or thrift
institution or Affiliate would beneficially own greater than 4.9% of the
outstanding Common Shares of the Company, calculating such percentage in
accordance with the proviso in Section 4.4(a) or (B) any person (other than
persons or entities referred to in clause (A) above) if after such Transfer such
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person would beneficially own greater than 9.9% of the outstanding Common Shares
of the Company, calculating such percentage in accordance with the proviso in
Section 4.4(a).
(5) The Company shall use all reasonable best efforts to file a
registration statement (the "Registration Statement") covering the Securities on
behalf of the Investor and its affiliates and any subsequent transferee with the
SEC, such Registration Statement to be effective starting from the expiration or
termination of the transfer restrictions set forth in Section 4.2(a). The
expenses of the preparation and filing of such Registration Statement shall be
borne by the Company. Upon filing the Registration Statement, the Company will
use its reasonable best efforts to keep the Registration Statement effective
with the SEC at all times until the Investor or any transferee who would require
such registration to effect a sale of the Securities no longer holds the
Securities. Provisions relating to the registration rights discussed in this
Section are included in Exhibit 11 hereto.
(c) Transfer of Warrants. (1) Subject to Section 4.2(b), the Investor
will not sell or otherwise Transfer (other than by way of distribution in the
ordinary course of business by the Investor to its general and limited partners)
any Warrants without first giving the Company prior notice thereof on a business
day during normal business hours and at least 2 hours before the end of such
normal business hours (an "Offer Notice") and the opportunity (as hereinafter
provided) to purchase such Warrants (the "Offered Securities") at a cash price
(the "Offer Price") equal to the valuation of such Warrants based on a
computation of the option value of such Warrants using Black-Scholes calculation
methods and making the assumptions described in the Black-Scholes methodology
included as Exhibit 10. The Offer Notice shall constitute an offer (the "Offer")
by the Investor to sell the Offered Securities to the Company at the calculated
Offer Price.
(2) The Offer may be accepted within 4 hours of receipt by the Company
of the Offer Notice and, if accepted, the Offered Securities shall be purchased
within 5 days (subject to extension to up to 30 days if necessary to satisfy
legal or regulatory requirements) after such acceptance. Such acceptance shall
constitute an agreement between the Company and the Investor to purchase and
sell the amount of Warrants so specified at the Offer Price and on other terms
set forth in this Section 4.2(c). If the Offer is not accepted within such
4-hour acceptance period, the Investor may Transfer the Offered Securities, if
otherwise permitted by Section 4.2(b). If such Transfer is not consummated by
the Investor within 30 days after the expiration of the 4-hour acceptance
period or earlier irrevocable rejection of such Offer, no Transfer may be made
by the Investor without again complying with this Section 4.2(c).
(d) Purchase of Warrants on Change in Control. Upon the occurrence of a
Preliminary Control Event, the Investor may elect at any time
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for so long as it holds any Warrants, by delivering written notice thereof to
the Company, to cause the Company to purchase at any time after the occurrence
of such Preliminary Control Event any Warrant, in whole or in part, acquired
hereunder that the Investor then holds at a valuation based on a computation of
the option value of the Warrant using Black-Scholes calculation methods and
making the assumptions described in the Black-Scholes methodology described in
Exhibit 10. At the election of the Company, all or any portion of such purchase
price may be paid in Common Shares (valued at the then current market price of
the Common Stock as of the time of such payment) so long as such payment does
not cause the Company to fail to comply with applicable New York Stock Exchange
requirements or the requirements of any other Governmental Entities. To the
extent that a payment in Common Shares would cause the Company to fail to comply
with New York Stock Exchange rules, once the maximum number of Common Shares has
been paid, the remainder of such purchase price may be paid in the form of
shares of nonvoting, noncumulative perpetual preferred stock (callable on
customary terms after 5 years) bearing a fixed preferred dividend rate
determined based on advice of a nationally recognized investment banking firm
reasonably acceptable to the Investor and the Company (taking into account the
relevant characteristics of the Company and the preferred stock as well as
then-existing market conditions) such that the Investor would reasonably expect
to receive proceeds equal to the liquidation preference of such shares in
connection with an underwritten public offering of the shares after netting
applicable underwriting commissions and expenses.
(e) Purchase and Adjustment of Series D Warrants upon Certain Events.
(1) If either (A) the Company's stockholders fail to give the approval required
under Paragraph 312 of the rules of the New York Stock Exchange in order to
permit the exchange of Series D Warrants for Common Stock Warrants by September
30, 2003 or (B) the Transfer restrictions on the Securities lapse as provided in
Section 4.2(b)(3), other than as a result of a Preliminary Control Event or a
Change in Control, then the Investor may elect at any time for so long as it
holds any Series D Warrants, by delivering written notice thereof to the
Company, to cause the Company to purchase any such Warrant, in whole or in part,
acquired hereunder that the Investor then holds at a valuation based on a
computation of the option value of the Warrant using Black-Scholes calculation
methods and making the assumptions described in the Black-Scholes methodology
described in Exhibit 10; provided that if the Investor makes such election, the
volatility factor used in the Black-Scholes calculation will be 30% rather than
40% and the Exercise Price (as defined in the Series D Warrants) used will be
adjusted to exclude any effects of paragraphs (2) and (3) below. At the election
of the Company, all or any portion of such purchase price may be paid in Common
Shares (valued at the then current market price of the Common Stock as of the
time of such payment) so long as such payment does not cause the Company to fail
to comply with applicable New York Stock Exchange requirements or the
requirements of any other Governmental Entities. To the extent that a payment in
Common Shares would cause the
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Company to fail to comply with New York Stock Exchange rules, once the maximum
number of Common Shares has been paid, the remainder of such purchase price may
be paid in the form of shares of nonvoting, noncumulative perpetual preferred
stock (callable on customary terms after 5 years) bearing a fixed preferred
dividend rate determined based on advice of a nationally recognized investment
banking firm reasonably acceptable to the Investor and the Company (taking into
account the relevant characteristics of the Company and the preferred stock as
well as then-existing market conditions) such that the Investor would reasonably
expect to receive proceeds equal to the liquidation preference of such shares in
connection with an underwritten public offering of the shares after netting
applicable underwriting commissions and expenses.
(2) If the Company's stockholders have not given the approval required
under Paragraph 312 of the rules of the New York Stock Exchange in order to
permit the exchange of Series D Warrants for Common Stock Warrants on September
30, 2002, then as of such date, subject to reversal if such stockholder approval
is received on or before September 30, 2003, the Company and the Investor agree
to adjust the Exercise Price (as defined in the Series D Warrants) then in
effect by multiplying such Exercise Price by 0.95.
(3) If the Company's stockholders have not given the approval required
under Paragraph 312 of the rules of the New York Stock Exchange in order to
permit the exchange of Series D Warrants for Common Stock Warrants on September
30, 2003, then the Exercise Price then in effect shall be adjusted by dividing
such Exercise Price by 0.95 and multiplying the resulting quotient by 0.90.
(4) The Company and the Investor agree that they will enter into any
amendment to the Series D Warrants held by the Investor necessary to give effect
to the foregoing adjustments.
(f) Transfers to Partners. Upon expiration or lapse of any of the
Transfer restrictions in this Section 4.2, no provision in the Transaction
Documents will be interpreted to prevent or otherwise limit the Investor's
ability to Transfer any of the Securities to its limited partners and/or general
partners.
4.3 Voting. (a) Subject to Section 4.1 and the provisions of any
determination of non-control (the "Non-Control Determination") from the OTS
pursuant to and in accordance with 12 C.F.R. Part 574, the Investor will have
the voting rights described in the Series B Certificate with respect to its
ownership of Series B Shares. The Investor will have no voting rights with
respect to the SPRs, Series C Shares, Series D Shares, Series B Warrants, Series
C Warrants, Series D Warrants or Common Warrants. Should the Investor convert or
exercise, as applicable, any of the Securities such that it owns shares of
Common Stock, the Investor will have the same voting rights
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shared by all other holders of Common Stock, subject to Section 4.1 and the
provisions of any Non-Control Determination.
(b) Notwithstanding anything to the contrary in any of the Transaction
Documents, the Investor together with its Affiliates will not have the ability
to exercise any voting rights of any Securities in excess of 24.9% of the total
outstanding voting securities of the Company.
4.4 Preemptive Rights.
(a) Sale of New Stock. As long as the Investor owns Securities
representing the Qualifying Ownership Interest (before giving effect to
issuances triggering this Section), if at any time after the First Closing, the
Company at any time or from time to time makes any public or non-public offering
of Common Stock (or securities convertible or exchangeable into Common Stock)
("New Stock"), including any issuance of restricted stock or options to purchase
stock to employees at a price of less than $17.50 per share up to a maximum of 5
million shares of Common Stock (other than (1) any other offering pursuant to
any stock purchase plan, stock ownership plan, stock option plan or other
similar plan where stock is being issued or offered, to a trust, other entity or
otherwise, for the benefit of any employees, officers or directors of the
Company or (2) any offering or issuance of LTWs (as defined in Section 4.7)),
the Investor shall be afforded the opportunity to acquire from the Company for
the same price and on the same terms (except that, to the extent permitted by
law, the Investor may elect to receive such securities in nonvoting form,
convertible into voting securities in a widely dispersed offering) as such
securities are proposed to be offered to others, up to the amount of New Stock
required to enable it to maintain its proportionate Common Stock-equivalent
interest in the Company. The amount of New Stock that the Investor shall be
entitled to purchase shall be determined by multiplying (x) the total number of
such offered shares of New Stock by (y) a fraction, the numerator of which is
the number of shares of Common Stock held by the Investor, and the denominator
of which is the number of shares of Common Stock then outstanding; provided,
however, that for purposes of determining the number of shares of Common Stock
outstanding or held by the Investor, such amount shall assume (i) the exercise
of all outstanding options or warrants to purchase capital stock of the Company
(including the SPRs and Warrants, but excluding any rights issued under the
Rights Agreement unless such rights are exercisable at the time), (ii) the
conversion of all convertible equity securities of the Company outstanding or
issuable on the exercise of the options or warrants referred to in (i) (whether
or not then convertible), and (iii) that the Series D Shares outstanding or
issuable on the exercise of the options or warrants referred to in (i) are
convertible into the Reference Package of the Series D Stock.
(b) Notice. In the event the Company proposes to offer New Stock, it
shall give the Investor written notice of its intention, describing the price
and
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other terms upon which the Company proposes to offer the same. The Investor
shall have ten days from the date of receipt of any such notice to notify the
Company in writing that it intends to exercise such preemptive purchase rights
and as to the amount of New Stock the Investor desires to purchase, up to the
maximum amount calculated pursuant to Section 4.4(a). Such notice shall
constitute an agreement of the Investor to purchase the amount of New Stock so
specified upon the price and other terms set forth in the Company's notice to
it.
(c) Purchase Mechanism. If the Investor exercises its preemptive
purchase rights provided in this Section 4.4, the closing of the purchase of the
New Stock with respect to which such right has been exercised shall take place
within 45 calendar days after the giving of notice of such exercise, which
period of time shall be extended for a maximum of 135 days in order to comply
with applicable laws and regulations. Each of the Company and the Investor
agrees to use its commercially reasonable efforts to secure any regulatory
approvals or other consents, and to comply with any law or regulation necessary
in connection with the offer, sale and purchase of, such New Stock.
(d) Failure of Purchase. In the event the Investor fails to exercise
its preemptive purchase rights provided in this Section 4.4 within said ten-day
period or, if so exercised, the Investor is unable to consummate such purchase
within the time period specified in Section 4.4(c) above because of its failure
to obtain any required regulatory consent or approval, the Company shall
thereafter be entitled during the period of 90 days following the conclusion of
the applicable period to sell or enter into an agreement (pursuant to which the
sale of the New Stock covered thereby shall be consummated, if at all, within 30
days from the date of said agreement) to sell the New Stock not elected to be
purchased pursuant to this Section 4.4 or which the Investor is unable to
purchase because of such failure to obtain any such consent or approval, at a
price and upon terms no more favorable to the purchasers of such securities than
were specified in the Company's notice to the Investor. Notwithstanding the
foregoing, if such sale is subject to the receipt of any regulatory approval or
expiration of any waiting period, the time period during which such sale may be
consummated shall be extended until the expiration of five business days after
all such approvals have been obtained or waiting periods expired, but in no
event shall such time period exceed 180 days from the date of the applicable
agreement with respect to such sale. In the event the Company has not sold the
New Stock or entered into an agreement to sell the New Stock within said 90-day
period (or sold and issued New Stock in accordance with the foregoing within 30
days from the date of said agreement (as such period may be extended in the
manner described above for a period not to exceed 180 days from the date of said
agreement)), the Company shall not thereafter offer, issue or sell such New
Stock without first offering such securities to the Investor in the manner
provided above.
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(e) In the case of the offering of Common Stock for a consideration in
whole or in part other than cash, including securities acquired in exchange
therefor (other than securities by their terms so exchangeable), the
consideration other than cash shall be deemed to be the fair value thereof as
determined by the Board of Directors; provided, however, that such fair value as
determined by the Board of Directors shall not exceed the aggregate market price
of the Common Shares being offered as of the date the Board of Directors
authorizes the offering of such shares.
4.5 Governance Matters. (a) The Company will cause one person nominated
by the Investor (the "Board Representative") to be elected or appointed, subject
to satisfaction of all legal and governance requirements regarding service as a
director of the Company and The Dime Savings Bank of New York, FSB (the "Bank"),
to the Company's Board of Directors and the Bank's board of directors as
promptly as practicable.
(b) So long as the Investor owns Securities representing at least the
Qualifying Ownership Interest, subject to the further provisions of this Section
4.5, the Company's and the Bank's Governance and Nominating Committees (or any
other committee exercising a similar function) (the "Nominating Committees")
shall recommend to the Board of Directors of the Company and the board of
directors of the Bank, as the case may be, that such person (or any successor
designated by the Investor, subject to Section 4.5(c) below) be included in the
slate of nominees recommended by the Board of Directors of the Company to
stockholders for election as directors at each annual meeting of stockholders of
the Company or the Bank at which such person's term expires. In the event that
the Board Representative is not elected as a director of the Company or the
Bank, the transfer restrictions contained in Section 4.2(a) shall immediately
lapse and be of no further force or effect. In addition to the Board
Representative, the Investor will have the right to have two of its employees
attend meetings of the boards of directors of the Company and the Bank
(including any meeting of any committees thereof, but excluding executive
sessions of the boards of directors) as observers, without authority to speak or
vote (the "Observers").
(c) If the Board Representative shall cease to serve as a director for
any reason, the Board of Directors of each of the Company and the Bank will use
its best efforts to take all action required to fill the vacancy resulting
therefrom with a person designated by the Investor, subject to satisfaction of
all legal and governance requirements regarding service as a director of the
Company.
(d) If the Investor has Transferred 75% of (A) the number of Common
Shares referred to in Section 4.2(b)(2)(A)(i) and (B) the number of Common
Shares referred to in Section 4.2(b)(2)(A)(ii), the Investor will have no
further rights under Sections 4.5(a) through (c) other than to have one Observer
under the last sentence of Section 4.5(b) and shall promptly cause to
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resign, and take all other action reasonably necessary, or reasonably requested
by the Company or the Bank, to cause the prompt removal of, the Board
Representative. If the Investor also owns Securities representing less than the
Qualifying Ownership Interest, the Investor's right to have any Observer also
shall terminate.
4.6 Legend. (a) The Investor agrees that all certificates or other
instruments representing the Securities subject to this Agreement will bear a
legend substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS
OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED
PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN INVESTMENT AGREEMENT, DATED AS OF JULY 6, 2000, BETWEEN
THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY
OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID
AGREEMENT WILL BE VOID."
(b) Upon termination of this Agreement and upon request of the
Investor, the Company will issue a new certificate for any Securities bearing
only the first sentence of the legend set forth in Section 4.6(a) above. Upon
request of the Investor to effect a sale of any Securities, subject to the
restrictions on Transfers contained in this Agreement, after the latest of (1)
termination of this Agreement, or (2) the periods for permitted Transfers under
Section 4.2 (and for any Transfers subject to Rule 144 under the Securities Act,
upon receipt by the Company of an opinion of counsel reasonably satisfactory to
the Company to the effect that the Investor is not an "affiliate" and has not
been an "affiliate" (within the meaning of Rule 144 promulgated under the
Securities Act) for the preceding three months), the Company shall promptly
cause any legend to be removed from any certificate for any Securities so to be
Transferred. The Investor acknowledges that the Securities have not been
registered under the Securities Act or under any state securities laws and
agrees that it will not sell or otherwise dispose of any of the Securities,
except in compliance with the registration requirements or exemption provisions
of the Securities Act and any other applicable securities laws.
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4.7 Goodwill Litigation. Investor acknowledges that to the extent that
the Company issues litigation tracking warrants or similar instruments, in the
after-tax, and net-of-attributable-expenses, benefits of any proceeds
attributable to any judgment or settlement received by the Company in respect of
the Company's current claim against the Government of the United States relating
to existing supervisory goodwill claims ("Litigation Benefits") on or before the
date the Series B Stock becomes convertible into Common Stock in accordance with
the Series B Certificate (such litigation tracking warrants or similar
instruments so issued, "LTWs"), then the Investor shall have no claim with
respect to any such LTWs other than the anti-dilution rights with respect to the
issuance of such LTWs which are expressly set forth in the Warrant Certificates.
4.8 Additional Regulatory Matters. (a) In the case where the Company
for any reason becomes a "bank holding company" as defined in Section 2(a)(1) of
the Bank Holding Company Act of 1956, as amended (the "BHC Act"), to the extent
required by then applicable law, the Investor will cause the Board
Representative to resign, and will take all other action reasonably necessary to
cause the prompt removal of the Board Representative; provided that the Investor
will retain its right to Observers referred to in Section 4.5(b); and provided
further that the Company and the Investor will agree to pursue such alternate
arrangements as the Investor may reasonably request, such as a reduction of the
Investor's ownership of voting securities of the Company or such other
restructuring of its ownership of the Company, as may enable the Investor to
retain such board representation, while using their respective best efforts to
maintain the economic benefits contemplated under this Agreement.
(b) So long as the Investor maintains an Observer under Section 4.5(b),
the Company and the Investor agree to cooperate and communicate with each other
with respect to their respective purchases of Common Stock with the objective,
among other things, that Company repurchases not cause the Investor to become,
or control, (1) a "bank holding company" (in the event that the Company becomes
a bank holding company) within the meaning of the BHC Act, or (2) a "savings and
loan holding company" within the meaning of the HOLA, assuming compliance with
coordination and communication undertakings.
4.9 Reservation for Issuance. The Company will reserve that number of
Common Shares, Series B Shares, Series C Shares and Series D Shares sufficient
for issuance upon exercise or conversion of Securities owned at any time by the
Investor.
4.10 Certain Transactions. The Company will not merge or consolidate
into, or sell, transfer or lease all or substantially all of its property to,
any other party unless the successor, transferee or lessee party, as the case
may be (if not the Company), expressly assumes the due and punctual
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performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
4.11 Rights Plan. The Company will not amend or replace the Rights
Agreement in a manner that would materially and adversely effect the amendments
made to the definition of "Acquiring Person" in Section 1.1 of the Rights
Agreement by the amendment to the Rights Agreement provided for in Exhibit 9.
4.12 Extension Periods. Notwithstanding anything to the contrary
contained in the Transaction Documents, if there exists a period (the "Section
16(b) Period") during which the Investor's purchase, sale, exercise, exchange or
conversion of any Security pursuant to any Transaction Document would result in
liability under Section 16(b) of the Exchange Act, as amended, or the rules and
regulations promulgated thereunder, the period during which such Security may be
purchased, sold, exercised, exchanged or converted, as the case may be, if
prescribed by such Transaction Document, shall be extended for the equivalent
number of days of such Section 16(b) Period (the "Extension Period"), with such
Extension Period beginning on the later of (a) the expiration date of such
Security, if any, or (b) the date of the end of such Section 16(b) Period.
4.13 Indemnity. (a) The Company agrees to indemnify and hold the
Investor and its Affiliates and each of their respective officers, directors,
partners, employees and agents, and each person who controls the Investor within
the meaning of the Exchange Act and the regulations thereunder (the "Indemnified
Parties") harmless against any and all losses, liabilities, damages, expenses,
and other costs ("Losses") arising from any actual or threatened claims brought
against the Company or such Indemnified Parties in connection with or arising
out of the entering into of this Agreement and the transactions contemplated
hereby or any other legal, administrative or other proceedings arising out of
the transactions contemplated hereby, other than such Losses which are
judicially determined to have resulted from the gross negligence or willful
misconduct of the Investor or such other Indemnified Party.
(b) Each Indemnified Party under this Section 4.13 will, promptly after
the receipt of notice of the commencement of any action against such Indemnified
Party in respect of which indemnity may be sought from the Company on account of
an indemnity agreement contained in this Section 4.13, notify the Company in
writing of the commencement thereof. The omission of any Indemnified Party so to
notify the Company of any such action shall not relieve the Company from any
liability which it may have to such Indemnified Party other than pursuant to
this Section 4.13 or, unless the Company shall have been prejudiced by the
omission of such Indemnified Party so to notify the Company, pursuant to this
Section 4.13. In case any such action shall be brought against any Indemnified
Party and it shall notify the Company of the commencement thereof, the Company
shall be entitled to
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participate therein and, to the extent that it may wish, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Party, and
after notice from the Company to such Indemnified Party of its election so to
assume the defense thereof, the Company will not be liable to such Indemnified
Party under this Section 4.13 for any legal or other expense subsequently
incurred by such Indemnified Party in connection with the defense thereof;
provided, however, that (1) if the Company shall elect not to assume the defense
of such claim or action or (2) if the Indemnified Party reasonably determines
(A) that there may be a conflict between the positions of the Company and of the
Indemnified Party in defending such claim or action or (B) that there may be
legal defenses available to such Indemnified Party different from or in addition
to those available to the Company, then separate counsel for the indemnified
party shall be entitled to participate in and conduct the defense, in the case
of (1) and (2)(A), or such different defenses, in the case of (2)(B), and the
Company shall be liable for any reasonable legal or other expenses incurred by
the Indemnified Party in connection with the defense.
4.14 Chairman of the Board. The Company and the Investor each
anticipate that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ will become a director (subject to
satisfaction of all legal and governance requirements for service as a director)
of the Company and of the Bank, and Chairman of the Board of Directors of the
Company. In such capacities, it is understood and agreed that ▇▇. ▇▇▇▇▇▇▇▇▇▇▇
will not be acting on behalf of, as a representative of or as an Affiliate of
the Investor or any of its Affiliates. In that regard, the Investor represents
and warrants that ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ is not an Affiliate or representative of the
Investor or any of its Affiliates. The Investor represents and warrants that it
has not taken, and agrees that it will not take, any action that could
reasonably be expected to exert a controlling influence over ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ or
his participation as a director or officer of the Company or that otherwise
could result in his being deemed a representative of the Investor or any of its
Affiliates.
ARTICLE V
MISCELLANEOUS
5.1 Survival. Only those representations, warranties, agreements and
covenants of the parties contained in Sections 1.2(b), 2.1 and 2.4(e) and
Articles III, IV and V shall survive the First Closing. Only those
representations, warranties, agreements and covenants of the parties contained
in Section 2.1 and Articles III, IV and V shall survive the Second Closing. All
other representations, warranties, agreements and covenants shall be deemed only
to be conditions of the First Purchase and shall not survive the First Closing.
If this Agreement is terminated or abandoned, the provisions of Sections 3.2 and
3.3(b) shall survive such termination or abandonment.
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47
5.2 Amendment. No amendment or waiver of any provision of this
Agreement will be effective with respect to any party unless made in writing and
signed by an officer of a duly authorized representative of such party.
5.3 Waiver of Conditions. The conditions to each party's obligation to
consummate the First Purchase or the Second Purchase, as the case may be, are
for the sole benefit of such party and may be waived by such party in whole or
in part to the extent permitted by applicable law. No waiver will be effective
unless it is in a writing signed by a duly authorized officer of the waiving
party that makes express reference to the provision or provisions subject to
such waiver.
5.4 Counterparts and Facsimile. For the convenience of the parties
hereto, this Agreement may be executed in any number of separate counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed signature
pages to this Agreement may be delivered by facsimile and such facsimiles will
be deemed as sufficient as if actual signature pages had been delivered.
5.5 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
5.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.7 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the other will be in writing and will be deemed
to have been duly given (a) on the date of delivery if delivered personally, or
by telecopy or telefacsimile, upon confirmation of receipt, (b) on the first
business day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the third business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice.
(a) If to the Investor:
▇▇▇▇▇▇▇ ▇▇▇
Warburg, ▇▇▇▇▇▇ Equity Partners, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Company:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
General Counsel
Dime Bancorp, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
5.8 Entire Agreement, Etc. (a) This Agreement (including the Exhibits
and Disclosure Schedules hereto) and the Confidentiality Agreement constitute
the entire agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof, and (b) except as contemplated by Section
1.4, this Agreement will not be assignable by operation of law or otherwise (any
attempted assignment in contravention hereof being null and void).
5.9 Definitions of "subsidiary" and "Affiliate". (a) When a reference
is made in this Agreement to a subsidiary of a person, the term "subsidiary"
means those corporations, banks, savings banks, associations and other entities
of which such person owns or controls 51% or more of the outstanding equity
securities either directly or through an unbroken chain of entities as to each
of which 51% or more of the outstanding equity securities is owned directly or
indirectly by its parent; provided, however, that there shall not be included
any such entity to the extent that the equity securities of such entity were
acquired in satisfaction of a debt previously contracted in good faith or are
owned or controlled in a bona fide fiduciary capacity.
(b) The term "Affiliate" means, with respect to any person, any person
directly or indirectly controlling, controlled by or under common control
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49
with, such other person. For purposes of this definition, "control" when used
with respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management and/or policies of such person,
whether through the ownership of voting securities by contract or otherwise.
5.10 Captions. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
will not be deemed to limit or otherwise affect any of the provisions hereof.
5.11 Severability. If any provision of this Agreement or the
application thereof to any person (including, without limitation, the officers
and directors of the Investor and the Company) or circumstance is determined by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
5.12 No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person or entity other than
the parties hereto, any benefit right or remedies, except that the provisions of
Section 4.13 shall inure to the benefit of the persons referred to in that
Section.
5.13 Time of Essence. Time is of the essence in the performance of each
and every term of this Agreement.
5.14 Certain Adjustments. The parties recognize that the terms of the
Securities and this Agreement provide for a variety of antidilution, preemptive
and other similar rights and adjustments. It is the parties' intention that
these rights and adjustments shall be given effect in a manner that produces
fair and equitable results in the circumstances.
* * *
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the
date first herein above written.
DIME BANCORP, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
WARBURG, ▇▇▇▇▇▇
EQUITY PARTNERS, L.P.
By: WARBURG, ▇▇▇▇▇▇ & CO.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Partner
51
Exhibit 1
CERTIFICATE OF DESIGNATIONS
OF
SERIES B JUNIOR VOTING PREFERRED STOCK
OF
DIME BANCORP, INC.
We, the undersigned, ___________________ and __________________, the
__________________ and __________________ , respectively, of Dime Bancorp, Inc.,
a Delaware corporation (the "Corporation"), do hereby certify that, pursuant to
authority granted by Article IV of the Amended and Restated Certificate of
Incorporation of the Corporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Corporation has adopted the following resolutions fixing the
designation and certain terms, powers, preferences and other rights of a new
series of the Corporation's Preferred Stock, par value $0.01 per share, and
certain qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred Stock,
par value $0.01 per share, and the designation and certain qualifications,
limitations and restrictions thereon, are hereby fixed as follows:
Section 1. Designation. The distinctive serial designation of this
series shall be "Series B Voting Preferred Stock" (hereinafter called "Series B
Stock"). Each share of Series B Stock shall be identical in all respects with
the other shares of Series B Stock.
Section 2. Number. The number of shares in Series B Stock will
initially be [_____________], which number may from time to time be increased or
decreased (but not below the number then outstanding) by the Board of Directors.
Shares of Series B Stock purchased by the Corporation will be canceled and
revert to authorized but unissued shares of Preferred Stock undesignated as to
series. Shares of Series B Stock may be issued in fractional shares, which
fractional shares will entitle the holder, in proportion to such holder's
fractional share, to all rights of a holder of a whole share of Series B Stock.
Section 3. Dividends.
(a) The holders of full or fractional shares of Series B Stock will be
entitled to receive, when and as declared by the Board of Directors, but
only out of funds legally available therefor, dividends, on each date that
52
dividends or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation or any LTWs (as defined in the
Investment Agreement (the "Investment Agreement"), dated as of July 6, 2000
between the Corporation and Warburg, ▇▇▇▇▇▇ Equity Partners, L.P.)) are
payable on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole or fractional share of
Series B Stock equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock or LTWs of the Corporation) that would be payable on such date to a
holder of the Reference Package. Each such dividend will be paid to the
holders of shares of Series B Stock on the date, not exceeding 60 days
preceding such dividend or distribution payment date, fixed for the purpose
by the Board of Directors in advance of payment of each particular dividend
or distribution.
(b) The term "Reference Package" initially means 1,000 shares of
Common Stock, par value $0.01 per share ("Common Stock"), of the
Corporation and the rights (the "Rights") associated with such shares of
Common Stock as of the date of this Agreement under the Rights Agreement
(as defined in the Investment Agreement). If the Corporation, at any time
after the close of business on the date of filing of this Certificate of
Designations, (1) declares or pays a dividend on any Common Stock payable
in Common Stock, (2) subdivides any Common Stock or (3) combines any Common
Stock into a smaller number of shares, then and in each such case the
Reference Package after such event shall be the number of shares of Common
Stock (and associated Rights) that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result of such
event. If the Rights comprising part of the Reference Package become
exercisable at such time as shares of Series B Stock are outstanding, the
Corporation will use best reasonable efforts to put holders of shares of
Series B Stock in the economic position of holders of the Rights comprising
a part of the Reference Package.
(c) So long as any shares of Series B Stock are outstanding, no
dividend (other than a dividend in Common Stock or LTWs may be declared or
paid or set aside for payment or other distribution declared or made upon
the Common Stock or upon any other stock ranking junior to Series B Stock
as to dividends or upon liquidation, nor shall any Common Stock nor any
other stock of the Corporation ranking junior to or on a parity with Series
B Stock as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such stock) by the
2
53
Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to Series B Stock as to dividends and upon
liquidation), unless, in each case, the dividend to be due on the shares of
Series B Stock upon payment of such dividend, distribution, redemption,
purchase or other acquisition is contemporaneously paid on all outstanding
shares of Series B Stock.
Section 4. Mergers, Consolidations, Etc. In the event of any merger,
consolidation, reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, the shares of Series B Stock will at the same time be
similarly exchanged or changed in an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
Section. 5. Liquidation.
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders
of full and fractional shares of Series B Stock will be entitled, before
any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to Series
B Stock upon liquidation, to receive in full an amount per share equal to
the greater of (i) $0.01 (the "liquidation preference") plus an amount
equal to any dividends that have been declared on Series B Stock but not
paid and (ii) the amount that a holder of one share of Series B Stock would
be entitled to receive if such share were converted into the Reference
Package immediately prior to such liquidation, dissolution or winding up,
together with any declared but unpaid dividend prior to such distribution
or payment date. If such payment has been made in full to all holders of
shares of Series B Stock, the holders of shares of Series B Stock as such
will have no right or claim to any of the remaining assets of the
Corporation.
(b) If the assets of the Corporation available for distribution to the
holders of shares of Series B Stock upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, are
insufficient to pay in full all amounts to which such holders are entitled
pursuant to Section 5(a), no such distribution will be made on account of
any shares of any other class or series of Preferred Stock ranking on a
parity with the shares of Series B Stock upon such liquidation, dissolution
or winding up unless proportionate distributive amounts are paid on account
of the shares of Series B Stock, ratably in proportion to the full
distributable amounts for which holders of all such parity shares
3
54
are respectively entitled upon such liquidation, dissolution or winding up.
(c) Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series B Stock then outstanding will
be entitled to be paid out of assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are
entitled pursuant to the first paragraph of this Section 5 before any
payment is made to the holders of Common Stock or any other stock of the
Corporation ranking junior upon liquidation to Series B Stock.
(d) For the purposes of this Section 5, the consolidation or merger
of, or binding shares exchange by, the Corporation with any other
corporation will not be deemed to constitute a liquidation, dissolution or
winding up of the Corporation.
Section 6. Conversion. Each share or fractional share of Series B Stock
will convert into the Reference Package upon the earliest to occur of (a) the
issuance of LTWs, (b) the Corporation executing definitive documentation for a
transaction that upon consummation will result in a Change in Control (as
defined in the Investment Agreement) of the Corporation, (c) the occurrence of a
Change in Control, (d) the restrictions on transfers under Section 4.2(a) of the
Investment Agreement expiring pursuant to Section 4.2(b)(3)(B) of the Investment
Agreement or (e) nine months following the First Closing Date (as defined in the
Investment Agreement). Promptly after receipt of notice from the Corporation of
the occurrence of any of (a)-(e) of this Section 6, the holders of Series B
Stock will surrender their certificate or certificates at the principal office
of the Corporation and will be entitled to receive (1) a certificate or
certificates representing any capital stock comprising a part of the Reference
Package and into which their shares have been converted and (2) any cash or
other property then comprising a part of the Reference Package and to which they
are entitled under this Section 6. Until surrendered, such certificate or
certificates will be deemed to represent the shares of capital stock issuable
upon such conversion.
Section 7. Redemption. The shares of Series B Stock are not redeemable.
Section 8. Voting. Each whole share of Series B Stock is entitled, on
any matter, to vote, as a single class with any other capital stock comprising
part of the Reference Package and voting on such matter. On any such matter,
each share of Series B Stock will have the number of votes that a holder of the
Reference Package would have.
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IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the 6th day of July, 2000.
DIME BANCORP, INC.
By____________________
By____________________
Attest____________________
5
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Exhibit 2
CERTIFICATE OF DESIGNATIONS
OF
SERIES C JUNIOR NONVOTING PREFERRED STOCK
OF
DIME BANCORP, INC.
We, the undersigned, ___________________ and __________________, the
__________________ and __________________ , respectively, of Dime Bancorp.,
Inc., a Delaware corporation (the "Corporation"), do hereby certify that,
pursuant to authority granted by Article IV of the Amended and Restated
Certificate of Incorporation of the Corporation, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, preferences and
other rights of a new series of the Corporation's Preferred Stock, par value
$0.01 per share, and certain qualifications, limitations and restrictions
thereon:
RESOLVED, that there is hereby established a series of Preferred Stock,
par value $0.01 per share, and the designation and certain qualifications,
limitations and restrictions thereon, are hereby fixed as follows:
Section 1. Designation. The distinctive serial designation of this
series shall be "Series C Nonvoting Preferred Stock" (hereinafter called "Series
C Stock"). Each share of Series C Stock shall be identical in all respects with
the other shares of Series C Stock.
Section 2. Number. The number of shares in Series C Stock will
initially be [_____________], which number may from time to time be increased or
decreased (but not below the number then outstanding) by the Board of Directors.
Shares of Series C Stock purchased by the Corporation will be canceled and
revert to authorized but unissued shares of Preferred Stock undesignated as to
series. Shares of Series C Stock may be issued in fractional shares, which
fractional shares will entitle the holder, in proportion to such holder's
fractional share, to all rights of a holder of a whole share of Series C Stock.
Section 3. Dividends.
(a) The holders of full or fractional shares of Series C Stock will be
entitled to receive, when and as declared by the Board of Directors, but
only out of funds legally available therefor, dividends, on each date that
57
dividends or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation or any LTWs (as defined in the
Investment Agreement (the "Investment Agreement"), dated as of July 6, 2000
between the Corporation and Warburg, ▇▇▇▇▇▇ Equity Partners, L.P.)) are
payable on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole or fractional share of
Series C Stock equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock or LTWs of the Corporation) that would be payable on such date to a
holder of the Reference Package. Each such dividend will be paid to the
holders of shares of Series C Stock on the date, not exceeding 60 days
preceding such dividend or distribution payment date, fixed for the purpose
by the Board of Directors in advance of payment of each particular dividend
or distribution.
(b) The term "Reference Package" initially means 1,000 shares of
Common Stock, par value $0.01 per share ("Common Stock"), of the
Corporation and the rights (the "Rights") associated with such shares of
Common Stock as of the date of this Agreement under the Rights Agreement
(as defined in the Investment Agreement). If the Corporation, at any time
after the close of business on the date of filing of this Certificate of
Designations, (1) declares or pays a dividend on any Common Stock payable
in Common Stock, (2) subdivides any Common Stock or (3) combines any Common
Stock into a smaller number of shares, then and in each such case the
Reference Package after such event shall be the number of shares of Common
Stock (and associated Rights) that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result of such
event. If the Rights comprising part of the Reference Package become
exercisable at such time as shares of Series C Stock are outstanding, the
Corporation will use its best reasonable efforts to put holders of shares
of Series C Stock in the economic position of holders of the Rights
comprising a part of the Reference Package.
(c) So long as any shares of Series C Stock are outstanding, no
dividend (other than a dividend in Common Stock or LTWs) may be declared or
paid or set aside for payment or other distribution declared or made upon
the Common Stock or upon any other stock ranking junior to Series C Stock
as to dividends or upon liquidation, nor shall any Common Stock nor any
other stock of the Corporation ranking junior to or on a parity with Series
C Stock as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such stock) by the
2
58
Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to Series C Stock as to dividends and upon
liquidation), unless, in each case, the dividend to be due on the shares of
Series C Stock upon payment of such dividend, distribution, redemption,
purchase or other acquisition is contemporaneously paid on all outstanding
shares of Series C Stock.
Section 4. Mergers, Consolidations, Etc. In the event of any merger,
consolidation, reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, the shares of Series C Stock will at the same time be
similarly exchanged or changed in an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
Section 5. Liquidation.
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders
of full and fractional shares of Series C Stock will be entitled, before
any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to Series
C Stock upon liquidation, to receive in full an amount per share equal to
the greater of (i) $0.01 (the "liquidation preference") plus an amount
equal to any dividends that have been declared on Series C Stock but not
paid and (ii) the amount that a holder of one share of Series C Stock would
be entitled to receive if such share were converted into the Reference
Package immediately prior to such liquidation, dissolution or winding up,
together with any declared but unpaid dividend prior to such distribution
or payment date. If such payment has been made in full to all holders of
shares of Series C Stock, the holders of shares of Series C Stock as such
will have no right or claim to any of the remaining assets of the
Corporation.
(b) If the assets of the Corporation available for distribution to the
holders of shares of Series C Stock upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, are
insufficient to pay in full all amounts to which such holders are entitled
pursuant to Section 5(a), no such distribution will be made on account of
any shares of any other class or series of Preferred Stock ranking on a
parity with the shares of Series C Stock upon such liquidation, dissolution
or winding up unless proportionate distributive amounts are paid on account
of the shares of Series C Stock, ratably in proportion to the full
distributable amounts for which holders of all such parity shares
3
59
are respectively entitled upon such liquidation, dissolution or winding up.
(c) Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series C Stock then outstanding will
be entitled to be paid out of assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are
entitled pursuant to the first paragraph of this Section 5 before any
payment is made to the holders of Common Stock or any other stock of the
Corporation ranking junior upon liquidation to Series C Stock.
(d) For the purposes of this Section 5, the consolidation or merger
of, or binding shares exchange by, the Corporation with any other
corporation will not be deemed to constitute a liquidation, dissolution or
winding up of the Corporation.
Section 6. Conversion. If any holder of full or fractional shares of
Series C Stock surrenders to the Corporation (at the principal office of the
Corporation) certificate or certificates representing all or part of the
holder's shares of Series C Stock together with either (1) a certificate stating
that the holder has received the advice of counsel to the effect that it is
permissible under the federal banking laws and regulations applicable to the
Corporation that the shares of Series C Stock represented by such certificate or
certificates convert as contemplated by this Section 6 or (2) a certificate
stating that the holder is transferring the holders' shares in a Widely
Dispersed Offering (as defined below) and subsequently transfers the shares in a
Widely Dispersed Offering, then the shares of Series C Stock represented by such
certificate or certificates will convert as follows:
(a) If at the time of conversion the Series B junior voting preferred
stock, par value $0.01 per share, of the Corporation (the "Series B Stock")
has not converted into the "Reference Package" of the Series B Stock in
accordance with the terms of the certificate of incorporation of the
Corporation relating to the Series B Stock, each share of Series C Stock of
such holder will convert into one share (and any fractional share of such
holder will convert into the same fraction of a share) of Series B Stock;
and
(b) Otherwise, each share of Series C Stock of such holder will
convert into the Reference Package (and any fractional share of such holder
will convert into the same fraction of the Reference Package).
The holder will be entitled to receive, as applicable, (1) a certificate or
certificates representing the Series B Stock into which such shares have been
converted or (2) a certificate or certificates representing any capital stock
comprising a part of the Reference Package and into which their shares have been
converted (and, in the case of (2), any cash or other property then
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60
comprising a part of the Reference Package). The term "Widely Dispersed
Offering" means (w) a widely dispersed public distribution, (x) a private
placement in which no one party acquires the right to purchase in excess of 2%
of the voting shares of the Corporation, (y) in the case of shares of Series C
Stock held by Warburg, ▇▇▇▇▇▇ Equity Partners, L.P., distributions to such
holder's limited partners or (z) an assignment to a single party (e.g., a broker
or investment banker) for the purpose of conducting a widely dispersed public
distribution on the holder's behalf.
Section 7. Redemption. The shares of Series C Stock are not redeemable.
Section 8. Voting. Except as required by law, the shares of Series C
Stock are not entitled to vote on any matter.
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the 6th day of July, 2000.
DIME BANCORP, INC.
By____________________
By____________________
Attest____________________
5
61
EXHIBIT 3
CERTIFICATE OF DESIGNATIONS
OF
SERIES D JUNIOR NONVOTING PREFERRED STOCK
OF
DIME BANCORP, INC.
We, the undersigned, ___________________ and __________________, the
__________________ and __________________ , respectively, of Dime Bancorp, Inc.,
a Delaware corporation (the "Corporation"), do hereby certify that, pursuant to
authority granted by Article IV of the Amended and Restated Certificate of
Incorporation of the Corporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Corporation has adopted the following resolutions fixing the
designation and certain terms, powers, preferences and other rights of a new
series of the Corporation's Preferred Stock, par value $0.01 per share, and
certain qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred Stock,
par value $0.01 per share, and the designation and certain qualifications,
limitations and restrictions thereon, are hereby fixed as follows:
Section 1. Designation. The distinctive serial designation of this
series shall be "Series D Nonvoting Preferred Stock" (hereinafter called "Series
D Stock"). Each share of Series D Stock shall be identical in all respects with
the other shares of Series D Stock.
Section 2. Number. The number of shares in Series D Stock will
initially be [_____________], which number may from time to time be increased or
decreased (but not below the number then outstanding) by the Board of Directors.
Shares of Series D Stock purchased by the Corporation will be canceled and
revert to authorized but unissued shares of Preferred Stock undesignated as to
series. Shares of Series D Stock may be issued in fractional shares, which
fractional shares will entitle the holder, in proportion to such holder's
fractional share, to all rights of a holder of a whole share of Series D Stock.
Section 3. Dividends.
(a) The holders of full or fractional shares of Series D Stock will be
62
entitled to receive, when and as declared by the Board of Directors, but
only out of funds legally available therefor, dividends, on each date that
dividends or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation or any LTWs (as defined in the
Investment Agreement (the "Investment Agreement"), dated as of July 6, 2000
between the Corporation and Warburg, ▇▇▇▇▇▇ Equity Partners, L.P.)) are
payable on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole or fractional share of
Series D Stock equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock or LTWs of the Corporation) that would be payable on such date to a
holder of the Reference Package. Each such dividend will be paid to the
holders of shares of Series D Stock on the date, not exceeding 60 days
preceding such dividend or distribution payment date, fixed for the purpose
by the Board of Directors in advance of payment of each particular dividend
or distribution.
(b) The term "Reference Package" initially means 1,000 shares of
Common Stock, par value $0.01 per share ("Common Stock"), of the
Corporation and the rights (the "Rights") associated with such shares of
Common Stock as of the date of this Agreement under the Rights Agreement
(as defined in the Investment Agreement). If the Corporation, at any time
after the close of business on the date of filing of this Certificate of
Designations, (1) declares or pays a dividend on any Common Stock payable
in Common Stock, (2) subdivides any Common Stock or (3) combines any Common
Stock into a smaller number of shares, then and in each such case the
Reference Package after such event shall be the number of shares of Common
Stock (and associated Rights) that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result of such
event. If the Rights comprising part of the Reference Package become
exercisable at such time as shares of Series D Stock are outstanding, the
Corporation will use best reasonable efforts to put holders of shares of
Series D Stock in the economic position of holders of the Rights comprising
a part of the Reference Package.
(c) So long as any shares of Series D Stock are outstanding, no
dividend (other than a dividend in Common Stock or LTWs) may be declared or
paid or set aside for payment or other distribution declared or made upon
the Common Stock or upon any other stock ranking junior to Series D Stock
as to dividends or upon liquidation, nor shall any Common Stock nor any
other stock of the Corporation ranking junior to or on a parity with Series
D Stock as to dividends or upon liquidation be redeemed, purchased or
otherwise
2
63
acquired for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to Series D Stock as to dividends and upon liquidation), unless, in
each case, the dividend to be due on the shares of Series D Stock upon
payment of such dividend, distribution, redemption, purchase or other
acquisition is contemporaneously paid on all outstanding shares of Series D
Stock.
Section 4. Mergers, Consolidations, Etc. In the event of any merger,
consolidation, reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, the shares of Series D Stock will at the same time be
similarly exchanged or changed in an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
Section. 5. Liquidation.
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders
of full and fractional shares of Series D Stock will be entitled, before
any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to Series
D Stock upon liquidation, to receive in full an amount per share equal to
the greater of (i) $0.01 (the "liquidation preference") plus an amount
equal to any dividends that have been declared on Series D Stock but not
paid and (ii) the amount that a holder of one share of Series D Stock would
be entitled to receive if such share were converted into the Reference
Package immediately prior to such liquidation, dissolution or winding up,
together with any declared but unpaid dividend prior to such distribution
or payment date. If such payment has been made in full to all holders of
shares of Series D Stock, the holders of shares of Series D Stock as such
will have no right or claim to any of the remaining assets of the
Corporation.
(b) If the assets of the Corporation available for distribution to the
holders of shares of Series D Stock upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, are
insufficient to pay in full all amounts to which such holders are entitled
pursuant to Section 5(a), no such distribution will be made on account of
any shares of any other class or series of Preferred Stock ranking on a
parity with the shares of Series D Stock upon such liquidation, dissolution
or winding up unless proportionate distributive amounts are
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64
paid on account of the shares of Series D Stock, ratably in proportion to
the full distributable amounts for which holders of all such parity shares
are respectively entitled upon such liquidation, dissolution or winding up.
(c) Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series D Stock then outstanding will
be entitled to be paid out of assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are
entitled pursuant to the first paragraph of this Section 5 before any
payment is made to the holders of Common Stock or any other stock of the
Corporation ranking junior upon liquidation to Series D Stock.
(d) For the purposes of this Section 5, the consolidation or merger
of, or binding shares exchange by, the Corporation with any other
corporation will not be deemed to constitute a liquidation, dissolution or
winding up of the Corporation.
Section 6. Conversion. At such time as the Corporation has obtained the
requisite approval of its stockholders or determines, at its sole discretion,
that such approval is not required by the rules of the New York Stock Exchange,
each share of Series D Stock will convert into one share of Series C junior
nonvoting preferred stock, par value $0.01 per share, of the Corporation (the
"Series C Stock") (and any fractional share of Series D Stock will convert into
the same fraction of a share of Series C Stock). Promptly after receipt of
notice from the Corporation of the occurrence of either such event, the holders
of Series D Stock will surrender their certificate or certificates at the
principal office of the Corporation and will be entitled to receive a
certificate or certificates representing the shares of Series C Stock into which
their shares have been converted. Until surrendered, such certificate or
certificates will be deemed to represent the shares of Series C Stock issuable
upon such conversion.
Section 7. Redemption. The shares of Series D Stock are not redeemable.
Section 8. Voting. Except as required by law, the shares of Series D
Stock are not entitled to vote on any matter.
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65
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the 6th day of July, 2000.
DIME BANCORP, INC.
By____________________
By____________________
Attest____________________
5
66
EXHIBIT 4
FORM OF RIGHTS CERTIFICATE
THE RIGHTS REPRESENTED BY THIS INSTRUMENT AND THE SECURITIES ISSUABLE
UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD
OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING
THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
THIS INSTRUMENT IS ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND OTHER PROVISIONS OF AN INVESTMENT AGREEMENT, DATED AS OF JULY
6, 2000 (THE "INVESTMENT AGREEMENT"), BETWEEN THE ISSUER (THE "COMPANY") OF
THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS
ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT
WILL BE VOID.
DIME BANCORP, INC.
RIGHTS CERTIFICATE
No. [___]
CERTIFICATE FOR [__________________] RIGHTS TO
RECEIVE SHARES OF SERIES B JUNIOR VOTING
PREFERRED STOCK OF DIME BANCORP, INC.
This instrument (this "Rights Certificate") certifies that
[____________________________________] is the registered holder of the number of
Rights set forth above, each of which entitles the registered holder thereof,
subject to the terms, provisions and conditions of the Investment Agreement and
this Rights Certificate, to one share of Series B junior voting preferred stock,
par value $0.01 per share (the "Series B Preferred Shares"), of Dime Bancorp,
Inc., a Delaware corporation (the "Company"), upon exercise and surrender of
this Rights Certificate.
Section 1. Automatic Exercise and Conversion. The Rights will be deemed
exercised and will convert into (i) Series B Preferred Shares and (ii) the right
to receive from the Company any Covered Distributions (as defined below)
immediately upon receipt (a) by the Holder and the Company of
67
approval, non-objection or early termination pursuant to applications filed
after the date hereof under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act") or (b) receipt by the Company of an opinion of
counsel, such counsel and the form and substance of the opinion to be reasonably
satisfactory to the Company, to the effect that no such approval, non-objection
or termination is required for the Holder to exercise the Rights in compliance
with the HSR Act (or that upon a proposed transfer no such approval,
non-objection or termination is required for the transferee to so exercise, in
which case the Rights will be deemed exercised and will convert immediately
following consummation of such transfer (any such transfer being subject to the
provisions of this Rights Certificate)). In lieu of the preceding, the Rights
will be deemed exercised and will convert into (i) shares of Series C junior
nonvoting preferred stock, par value $0.01 per share, of the Company ("Series C
Preferred Shares"), on a 1 Series C Preferred Share to 1 Right basis, and (ii)
the right to receive from the Company any Covered Distributions, immediately
upon receipt by the Company of (a) evidence reasonably satisfactory to it (which
may include an opinion of counsel) that such conversion and exercise does not
violate the Home Owners' Loan Act or any rule or regulation of the Office of
Thrift Supervision and (b) an irrevocable election by the Holder. Promptly after
receipt of notice from the Company of such event, the Holder will surrender this
Rights Certificate or Certificates at the principal office of the Company and
will be entitled to receive a certificate or certificates for the number of
Series B Preferred Shares or Series C Preferred Shares (as the case may be)
issuable upon such surrender and any Covered Distributions. Any Rights
Certificate surrendered for exchange, substitution, or exercise will be canceled
by the Company and retired. The term "Covered Distribution" means, with respect
to any Rights deemed exercised and converted in accordance with this Section 1,
any and all dividends and distributions to which the Series B Preferred Shares
or Series C Preferred Shares (as the case may be) into which the Rights are
converted would be entitled if such shares had been issued and outstanding from
the date such converted Rights were issued through the date of conversion.
Notwithstanding the foregoing, if before the Rights are exercised, there is a
merger, consolidation, reclassification or other transaction in which the Series
B Preferred Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, each Right will thereafter represent the right
to receive (on exercise in accordance with this Rights Certificate) the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of a Series B Preferred Share would
be entitled to receive as a result of such transaction, and any Covered
Distributions that a holder of a Series B Preferred Share would be entitled to
receive prior to the exercise of the Rights.
Section 2. Limitations. This Rights Certificate is subject to
all of the terms, provisions and conditions of the Investment Agreement, which
terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which reference is hereby made for a full description
of the rights, limitations of rights and obligations hereunder of the Company
and the holder of this Rights Certificate. Copies of the Investment
68
Agreement are on file at the principal office of the Company and are available
without cost upon written request.
Section 3. Voting. No holder of this Rights Certificate, as such, will
be entitled to vote or receive dividends or be deemed for any purpose the holder
of any securities which may at any time be issuable on the exercise hereof, nor
will anything contained in the Investment Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Investment Agreement),
or to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate will have been exercised or exchanged as
provided in the Investment Agreement.
Section 4. Transfer. This Rights Certificate and the Rights evidenced
hereby are not transferable other than as provided in the Investment Agreement
(and subject to compliance with the legend on this Rights Certificate).
Section 5. Reservation of Preferred Stock. The Company will reserve and
keep available free from preemptive rights, out of its authorized but unissued
Series B Preferred Shares, the full number of Series B Preferred Shares
deliverable upon the exercise of all outstanding Rights evidenced by this Rights
Certificate.
Section 6. Mutilated or Missing Certificate. If this Rights Certificate
is mutilated, lost, stolen or destroyed, the Company will issue and deliver in
substitution for and upon cancellation of the mutilated Rights Certificate, or
in substitution for the Rights Certificate lost, stolen or destroyed, a new
Rights Certificate of like tenor and representing an equivalent right or
interest, but only upon, in the case of a lost, stolen or destroyed Rights
Certificate, receipt of evidence satisfactory to the Company of such loss, theft
or destruction.
Section 7. Notices. Any notice to be given by the holder to the
Company, will be in writing and will be delivered in person or by facsimile
transmission, or mailed by first class mail, postage prepaid, or by overnight
courier, to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇; confirmation no. (▇▇▇) ▇▇▇-▇▇▇▇; Attention:
Corporate Secretary. The Company may change the address or facsimile numbers to
which notices to it are to be transmitted, delivered or mailed hereunder by
notice to the holder. Any notice pursuant to this Rights Certificate by the
Company to the holder will be in writing and will be delivered in person or by
facsimile transmission, or mailed by first class mail, postage prepaid, or by
overnight courier, to the holder, at [__________________]; facsimile
69
no.: [__________________]; confirmation no. [__________________]; Attention:
[____]. Notices delivered personally will be effective at the time delivered by
hand, notices sent by mail will be effective two days after mailing, notices
sent by facsimile transmission will be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery will be effective on
the next business day after timely delivery to the courier.
Section 8. Supplements and Amendments. This Rights Certificate may not
be supplemented, amended or otherwise modified without the prior written consent
of the holder.
Section 9. Applicable Law. This Rights Certificate and the Rights
evidenced hereby will be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed
entirely within such state.
Section 10. Benefits of this Certificate. Nothing in this Rights
Certificate, express or implied, will be construed to give to any person or
entity other than the Company and the holder any legal or equitable right,
remedy or claim under this Rights Certificate; and this Rights Certificate will
be for the sole and exclusive benefit of the Company and the holder.
70
IN WITNESS WHEREOF, the Company has caused this Rights Certificate to
be duly executed this 6th day of July, 2000.
DIME BANCORP, INC.
By:
Name:
Title:
Accepted:
[HOLDER]
By:______________________________
Name:
Title:
71
EXHIBIT 5
FORM OF COMMON WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS INSTRUMENT AND THE SECURITIES ISSUABLE
UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS
ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN INVESTMENT AGREEMENT, DATED AS OF JULY 6, 2000 (THE "INVESTMENT
AGREEMENT"), BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN (THE "FIRST INVESTOR"), A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
EXERCISABLE AT ANY TIME UNTIL 5:00 P.M.,
NEW YORK CITY TIME, ON [_____________]* UNLESS
EXTENDED AS PROVIDED BELOW.
DIME BANCORP, INC.
WARRANT
No. ____
CERTIFICATE FOR_________ WARRANTS TO
PURCHASE SHARES OF COMMON STOCK
OF DIME BANCORP, INC.
This Instrument (this "Certificate") certifies that, for value
received, [______________________________], or its registered assigns (the
"Holder"), is the owner of ______________________ (__________) Warrants (as
defined below), each of which entitles the Holder to purchase at any time until
----------
* SEVEN YEARS AFTER THE ISSUE OF THE SERIES B WARRANTS OR SERIES C WARRANTS FOR
WHICH THESE COMMON WARRANTS ARE EXCHANGED.
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5:00 p.m., New York City time, on [_____________],* at the exercise price per
share specified herein (the "Exercise Price"), one share of common stock, par
value $0.01 per share (the "Common Stock"), of Dime Bancorp, Inc., a Delaware
corporation (the "Company"). The number and type of shares purchasable upon
exercise of each Warrant and the Exercise Price will be subject to adjustment
from time to time as herein provided. In this Certificate, the right to purchase
each share of Common Stock is referred to as a "Warrant"; the shares of Common
Stock or, pursuant to the terms hereof, other securities, issuable upon exercise
of the Warrants are referred to as the "Warrant Shares". At the option of the
First Investor, in lieu of shares of Common Stock issuable on exercise of the
Warrants, there shall be substituted shares of Series C junior nonvoting
preferred stock of the Company or Series D junior nonvoting preferred stock
("Preferred Stock") having an aggregate "Reference Package" (as defined in the
certificate of incorporation of the Company with respect to the Preferred Stock)
equal to such number of shares of Common Stock.
Each Warrant possesses the following terms, conditions and provisions,
to which the Holder agrees by acceptance hereof:
SECTION 1. Registration; Transferability; Exchange of Certificate.
1.1 Registration. The Company will number and register each Warrant in
a register (the "Warrants Register") maintained at the office of the Company
(the "Office") as they are issued by the Company. The Company will be entitled
to treat the registered Holder of any Warrant, as set forth in the Warrants
Register, as its owner for all purposes and will not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person. The Warrants are transferable only on the Warrants Register maintained
at the Office upon delivery of the certificate or certificates evidencing such
Warrants, duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, will be
deposited and remain with the Company.
1.2 Exchange of Certificates. Subject to the provisions herein, each
Certificate may be exchanged for another Certificate(s) entitling the Holder to
purchase a like aggregate number of Warrant Shares as this Certificate then
entitles such Holder to purchase. If the Holder desires to exchange this
Certificate, it must deliver such request in writing to the Company and
surrender, properly endorsed if required by the Company, this Certificate.
Thereupon, the Company will sign and deliver to the entitled person the
requested new Certificate.
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SECTION 2. Term of Warrants; Exercise of Warrants.
2.1 Term of Warrants. Subject to the terms of this Certificate, the
Holder has the right, exercisable until 5:00 p.m., New York City time, on
[_____________]* (the "Expiration Date") to purchase from the Company (and the
Company will issue and sell to the Holder of the Warrants represented hereby)
such number of Warrant Shares that the Holder may at the time be entitled to
purchase, or any lesser number of Warrant Shares requested by the Holder. Each
Warrant not exercised prior to 5:00 p.m., New York City time, on the Expiration
Date will become void.
2.2 Exercise of Warrants. (a) The Warrants may be exercised in whole or
in part at any time upon surrender to the Company, at its Office, of this
Certificate, together with the Election Form attached hereto duly completed and
signed. Such surrender may be by facsimile transmission; provided, however, that
the Company will not be obligated to issue any Warrant Shares in respect of this
Certificate and such Election Form until it has received the original versions
of this Certificate and such Election Form. The earlier of the receipt of such
facsimile transmission or the receipt of such original certificate and form is
referred to herein as the "Exercise Date". Promptly following the Exercise Date,
the Holder will deliver, if it has not already done so, (1) original versions of
this Certificate and the Election Form and (2) either (A) a bank or certified
check or wire transfer of immediately available United States funds payable to
the Company in an amount equal to the product of the Exercise Price multiplied
by the number of Warrant Shares being purchased upon such exercise (the
"Aggregate Exercise Price") or (B) a written notice to the Company that the
Holder is exercising the Warrant (or a portion thereof) by authorizing the
Company to withhold from issuance a number of Warrant Shares issuable upon such
exercise of the Warrant which when multiplied by the Market Price (as defined in
Section 6.1(b) below) of the Warrant Shares is equal to the Aggregate Exercise
Price (and such withheld shares will no longer be issuable under this Warrant)
(a "Cashless Exercise"). "Business Day" means any day other than a Saturday,
Sunday, or a day in which banking institutions in the City of New York, New York
are authorized or obligated by law or executive order to close.
(b) Upon the surrender of this Certificate, with the Election Form duly
executed, and payment of the Exercise Price as aforesaid (except in
--------
* SEVEN YEARS AFTER THE ISSUE OF THE SERIES B WARRANTS OR SERIES C WARRANTS FOR
WHICH THESE COMMON WARRANTS ARE EXCHANGED.
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the case of a Cashless Exercise), the Company will promptly cause to be issued
and delivered with all reasonable dispatch to or upon the written order of the
Holder and in such name or names as the Holder may designate a certificate(s)
for the number of Warrant Shares so purchased, together, at the option of the
Company as provided in Section 7 hereof, with cash in respect of any fractional
Warrant Shares otherwise issuable upon such surrender. Payment of the aggregate
Exercise Price will be made by wire transfer of immediately available funds
(except in the case of a Cashless Exercise). Any such Warrant Shares so
purchased will be deemed issued as of the Exercise Date.
(c) If the Holder of this Certificate exercises fewer than all the
Warrants at any time prior to the Expiration Date, a new Certificate evidencing
the remaining unexercised Warrants will be issued to the Holder.
2.3 Compliance with Government Regulations. The Company covenants that
if any Warrant Shares required to be reserved for purposes of the exercise of
Warrants require, under any Federal or state law or applicable governing rule or
regulation of any national securities exchange, registration with or approval of
any governmental authority, or listing on any such national securities exchange,
before such Warrant Shares may be issued upon exercise, the Company will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved by such governmental authority or listed on the relevant
national securities exchange, as the case may be; provided, however, that in no
event will Warrant Shares be issued, and the Company is hereby authorized to
suspend the exercise of all Warrants, for the period during which such
registration, approval or listing is required but not in effect (the "Suspension
Period"); and provided, further, that, if a Suspension Period is in effect, the
term of the Warrants will be extended for the equivalent number of days of such
Suspension Period (the "Extension Period") with such Extension Period beginning
on the later of (a) the Expiration Date or (b) the date of the end of any
previously established Suspension Period. The Company will give prompt notice of
any such suspension and will promptly return this Certificate and payment of the
Exercise Price thereof to the Holder if such Holder tendered this Certificate
and Exercise Price precipitating or during such Suspension Period and will
promptly give notice of the lifting of any such suspension and the commencement
of any such Extension Period.
2.4 OTS Approval. Anything herein to the contrary notwithstanding, the
First Investor hereby acknowledges and agrees that its exercise of Warrants is
subject to the condition that it will have first received any and all necessary
approvals, authorizations and consents of the Office of Thrift Supervision or
any other relevant Governmental Entity (as defined in the Investment Agreement)
necessary to permit such exercise.
2.5 Exercise Price. The Exercise Price per share at which each
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Warrant Share will be purchased upon exercise of each Warrant is $[_____]*,
subject to adjustment as set forth herein, but will not be less than $0.01.
SECTION 3. Payment of Taxes. The Company will pay documentary, stamp or
similar issue or transfer taxes, if any, that may be payable in respect of the
issuance or delivery of any Warrant or of the Warrant Shares issuable upon the
exercise of such Warrants; provided, however, that the Company is not required
to pay any tax in respect of any registration or transfer involved in the
issuance or delivery of any Warrant or the issuance or delivery of certificates
for Warrant Shares in a name other than the Holder.
SECTION 4. Mutilated or Missing Certificates. If this Certificate is
mutilated, lost, stolen or destroyed, the Company will issue and deliver in
substitution for and upon cancellation of the mutilated Certificate, or in
substitution for the Certificate lost, stolen or destroyed, a new Certificate of
like tenor and representing an equivalent right or interest, but only upon, in
the case of a lost, stolen or destroyed certificate, receipt of evidence
satisfactory to the Company of such loss, theft or destruction.
SECTION 5. Reservation and Availability of Warrant Shares; Purchase and
Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The Company will reserve and
keep available free from preemptive rights, out of its authorized but unissued
shares of Common Stock, the full number of Warrant Shares deliverable upon the
exercise of all outstanding Warrants evidenced by this Certificate. The Company
or, if appointed, a transfer agent (a "Transfer Agent") will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
of Common Stock as are required for such purpose. The Company will keep a copy
of this Certificate on file with each Transfer Agent. The Company will furnish
such Transfer Agent with a copy of all notices of adjustments and certificates
related thereto which are transmitted to the Holder pursuant to Section 6
hereof.
(b) The Company agrees that all Warrant Shares issuable upon exercise
of Warrants will, upon issuance, be duly authorized and validly issued, and
fully paid and nonassessable shares of Common Stock, with no personal liability
attaching to the ownership thereof, free from preemptive rights and free from
all taxes with respect to the issuance thereof, and all liens, charges, and
--------
* WILL BE DETERMINED IN ACCORDANCE WITH THE SERIES B WARRANTS OR SERIES C
WARRANTS FOR WHICH THESE COMMON WARRANTS ARE EXCHANGED.
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security interests.
5.2 Warrant Shares Record Date. Each person in whose name any stock
certificate for Warrant Shares is issued will for all purposes be deemed to have
become the holder of record of the Warrant Shares represented thereby on, and
such stock certificate will be dated as of, the Exercise Date relating to such
Warrant Shares (unless exercise is then suspended in accordance with Section
2.3).
5.3 Purchase of Warrants by the Company. The Company has the right,
except as limited by law, other agreements or herein, to purchase or otherwise
acquire in negotiated transactions Warrants evidenced hereby at such times, in
such manner and for such consideration as it may deem appropriate.
5.4 Cancellation of Warrants. Any Certificate surrendered for exchange,
substitution, transfer or exercise in whole or in part will be canceled by the
Company and retired.
SECTION 6. Adjustment of Exercise Price. The Exercise Price and the number
of Warrant Shares issuable on Exercise of each Warrant are subject to adjustment
from time to time as described in this Section 6. All calculations under this
Section 6 will be made to the nearest one-hundredth of a cent or to the nearest
one-hundredth of a share, as the case may be.
6.1 Anti-dilution Adjustments. Subject to Section 6.4, the following
adjustments will be made, to the extent (but only to the extent) that an
appropriate adjustment has not been made to the Reference Package:
(a) Common Stock Issued at Less than Market Value. If the Company
issues or sells any Common Stock other than Excluded Stock without consideration
or for consideration per share less than the Market Price of the Common Stock
(provided, however, that no sale of securities pursuant to a bona fide
underwritten public offering will be deemed to be for less than Market Price),
as of the day of such issuance or sale, the Exercise Price in effect immediately
prior to each such issuance or sale will immediately (except as provided below)
be reduced to the price determined by multiplying the Exercise Price, in effect
immediately prior to such issuance or sale, by a fraction, (x) the numerator of
which shall be (A) the number of shares of Common Stock outstanding immediately
prior to such issuance or sale plus (B) the number of shares of Common Stock
which the aggregate consideration received by the Company for the total number
of such additional shares of Common Stock so issued or sold would purchase at
the Market Price on the last trading day immediately preceding such issuance or
sale and (y) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale. In such event, the
number of Warrant Shares issuable upon the exercise of each Warrant shall be
increased to the number obtained
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by dividing (x) the product of (A) the number of Warrant Shares issuable upon
the exercise of each Warrant before such adjustment, and (B) the Exercise Price
in effect immediately prior to the issuance giving rise to this adjustment by
(y) the new Exercise Price determined in accordance with the immediately
preceding sentence. For the purposes of any adjustment of the Exercise Price and
the number of Warrant Shares issuable upon exercise of each Warrant pursuant to
this Section 6.1(a), the following provisions shall be applicable:
(1) In the case of the issuance of Common Stock for cash, the amount of
the consideration received by the Company shall be deemed to be the
amount of the cash proceeds received by the Company for such Common
Stock before deducting therefrom any discounts or commissions allowed,
paid or incurred by the Company for any underwriting or otherwise in
connection with the issuance and sale thereof.
(2) In the case of the issuance of Common Stock (otherwise than upon the
conversion of any shares of capital stock or other securities of the
Company) for a consideration in whole or in part other than cash,
including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other
than cash shall be deemed to be the fair value thereof as determined
by the Board of Directors, provided, however, that such fair value as
determined by the Board of Directors shall not exceed the aggregate
Market Price of the shares of Common Stock being issued as of the date
the Board of Directors authorizes the issuance of such shares.
(3) In the case of the issuance of (A) options, warrants or other rights
to purchase or acquire Common Stock (whether or not at the time
exercisable) or (B) securities by their terms convertible into or
exchangeable for Common Stock (whether or not at the time so
convertible or exchangeable) or options, warrants or rights to
purchase such convertible or exchangeable securities (whether or not
at the time exercisable):
(i) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other
rights to purchase or acquire Common Stock shall be deemed to
have been issued at the time such options, warrants or rights are
issued and for a consideration equal to the consideration
(determined in the manner provided in Sections 6.1(a)(1) and
(2)), if any, received by the Company upon the issuance of such
options, warrants or rights plus the minimum purchase price
provided in such options,
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warrants or rights for the Common Stock covered thereby;
(ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or acquire such
convertible or exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options,
warrants or rights were issued and for a consideration equal to
the consideration, if any, received by the Company for any such
securities and related options, warrants or rights (excluding any
cash received on account of accrued interest or accrued
dividends), plus the additional consideration (determined in the
manner provided in Section 6.1(a)(1) and (2)), if any, to be
received by the Company upon the conversion or exchange of such
securities, or upon the exercise of any related options, warrants
or rights to purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof;
(iii) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights
or conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by
the company upon such exercise, conversion or exchange, but
excluding changes resulting from the antidilution provisions
thereof (to the extent comparable to the antidilution provisions
contained herein), the Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant as then in effect
shall forthwith be readjusted to such Exercise Price and number
of Warrant Shares as would have been obtained had an adjustment
been made upon the issuance of such options, warrants or rights
not exercised prior to such change, or of such convertible or
exchangeable securities not converted or exchanged prior to such
change, upon the basis of such change;
(iv) on the expiration or cancellation of any such options, warrants
or rights (without exercise), or the termination of the right to
convert or exchange such convertible or exchangeable securities
(without exercise), if the Exercise Price and the number of
Warrant Shares issuable upon exercise of this Warrant shall have
been adjusted upon the issuance thereof, the Exercise Price and
the number of
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Warrant Shares issuable upon exercise of this Warrant shall
forthwith be readjusted to such Exercise Price and number of
Warrant Shares as would have been obtained had an adjustment been
made upon the issuance of such options, warrants, rights or such
convertible or exchangeable securities on the basis of the
issuance of only the number of shares of Common Stock actually
issued upon the exercise of such options, warrants or rights, or
upon the conversion or exchange of such convertible or
exchangeable securities; and
(v) if the Exercise Price and the number of Warrant Shares issuable
upon exercise of this Warrant shall have been adjusted upon the
issuance of any such options, warrants, rights or convertible or
exchangeable securities, no further adjustment of the Exercise
Price and the number of Warrant Shares issuable upon exercise of
this Warrant shall be made for the actual issuance of Common
Stock upon the exercise, conversion or exchange thereof;
provided, however, that no increase in the Exercise Price shall
be made pursuant to subclauses (i) and (ii) of this Section
6.1(a)(3).
(4) Notwithstanding anything to the contrary in this Section 6.1(a), no
adjustment will be required in respect of issuances of Common Stock
(or options to purchase Common Stock) pursuant to stock options
granted prior to the date hereof. Additionally, notwithstanding
anything to the contrary in this Section 6.1(a), adjustments will be
made for stock options and restricted stock granted to employees after
the date hereof pursuant to the terms of Section 6.1(b) rather than
Section 6.1(a).
(b) Employee Stock Options and Restricted Stock Grants. If the Company
issues or sells any Common Stock or its equivalent to employees at a price of
less than $17.50 per share, or grants any options to employees where the minimum
exercise price of such options is less than $17.50 per share of Common Stock,
then the number of Warrant Shares and the Exercise Price will be adjusted in
accordance with the provisions of Section 6.1(a) but treating the Market Price
as $17.50.
Notwithstanding anything to the contrary set forth in this Section
6.1(b), no adjustment will be required in respect of issuance of employee stock
options or the sale of restricted stock to employees after adjustments have been
made pursuant to this Section 6.1(b) for the issuance of 5 million shares and
options at prices of less than $17.50 per share.
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(c) Certain Repurchases of Common Stock. In case the Company effects a Pro
Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior
to the effective date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (x) the product of (A) the number of shares of Common Stock
outstanding immediately before such Pro Rata Repurchase and (B) the Market Price
of a share of Common Stock on the trading day immediately preceding the first
public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase, minus (y) the aggregate purchase price of the
Pro Rata Repurchase, and of which the denominator shall be the product of (x)
the number of shares of Common Stock outstanding immediately prior to such Pro
Rata Repurchase minus the number of shares of Common Stock so repurchased and
(y) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement of such Pro Rata Repurchase. In such
event, the number of Warrant Shares issuable upon the exercise of each Warrant
shall be increased to the number obtained by dividing (x) the product of (A) the
number of Warrant Shares issuable upon the exercise of each Warrant before such
adjustment, and (B) the Exercise Price in effect immediately prior to the Pro
Rata Repurchase giving rise to this adjustment by (y) the new Exercise Price
determined in accordance with the immediately preceding sentence.
(d) Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 6.1(e)), any Warrant Shares issued or issuable upon
exercise of this Warrant after the date of such Business Combination or
reclassification will be exchangeable for the number of shares of stock or other
securities or property (including cash) to which the Warrant Shares issuable (at
the time of such consolidation, merger, sale, lease or conveyance) upon exercise
of this Warrant immediately prior to such Business Combination or
reclassification would have been entitled upon such Business Combination or
reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Holder shall
be appropriately adjusted so as to be applicable, as nearly as may reasonably
be, to any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant. In determining the kind and amount
of stock, securities or the property receivable upon consummation of such
Business Combination, if the holders of Common Stock have the right to elect the
kind or amount of consideration receivable upon consummation of such Business
Combination, then the Holder shall have the right to make a similar election
upon exercise of this Warrant with respect to the number of shares of stock or
other securities or property which the Holder will receive upon exercise of this
Warrant.
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(e) Stock Splits, Subdivisions, Reclassifications or Combinations. If the
Company shall (1) declare a dividend or make a distribution on its Common Stock
in shares of Common Stock, (2) subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares, or (3) combine or reclassify the
outstanding Common Stock into a smaller number of shares, the number of Warrant
Shares issuable upon exercise of this Warrant at the time of the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be proportionateley adjusted so that the
Holder after such date shall be entitled to purchase the number of Warrant
Shares which such holder would have owned or been entitled to receive after such
date had this Warrant been exercised immediately prior to such date. Successive
adjustments in the Exercise Price shall be made whenever any event specified
above shall occur. In such event the Exercise Price in effect at the time of the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (A) the number of Warrant Shares
issuable upon the exercise of this Warrant before such adjustment and (B) the
Exercise Price in effect immediately prior to the issuance giving rise to this
adjustment by (y) the new number of shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.
(f) Other Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of shares of its Common Stock
(1) of shares of any class other than its Common Stock or (2) of evidence of
indebtedness of the Company or any Subsidiary or (3) of assets, or (4) of rights
or warrants (in each case excluding (A) Ordinary Cash Dividends, (B) any
dividends or distribution referred to in Section 6.1(e) and (C) any LTWs as
defined in the Investment Agreement), in each such case the Exercise Price in
effect on the record date will be reduced by an amount equal, in the case of a
distribution in cash, to the amount thereof payable per share of the Common
Stock, or in the case of any other distribution, to the fair value thereof per
share of the Common Stock as determined by the Board of Directors. Such
reductions shall take effect on the record date for such distribution. In such
event, the number of Warrant Shares issuable upon the exercise of each Warrant
shall be increased to the number obtained by dividing (x) the product of (A) the
number of Warrant Shares issuable upon the exercise of this Warrant before such
adjustment, and (B) the Exercise Price in effect immediately prior to the
issuance giving rise to this adjustment by (y) the new Exercise Price determined
in accordance with the immediately preceding sentence. In the event that such
distribution is not so made, the Exercise Price and the number of Warrant Shares
issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board determines not to distribute such
shares, evidences of indebtedness, assets, rights or warrants, as the case may
be, to the Exercise Price that would then be in effect and the number of Warrant
Shares that would then be issuable upon exercise of this Warrant if
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such record date and distribution had not been fixed.
(g) Adjustments for Special Payments. In the event that the Company makes
any Special Payments, for so long as this Warrant is held by the First Investor
the Exercise Price in effect immediately prior to such Special Payments will be
reduced by an amount equal to the quotient of (x) the amount of such Special
Payments multiplied by 24.9%, divided by (y) the aggregate number of shares of
Common Stock underlying (or comprising the reference package of any capital
stock underlying) all warrants to purchase capital stock of the Company
theretofore issued to Holder under the Investment Agreement (including the
Warrants). In such event, the number of Warrant Shares issuable upon exercise of
each Warrant shall be increased to the number obtained by dividing (x) the
product of (A) the number of Warrant Shares issuable upon exercise of each
Warrant before such adjustment, and (B) the Exercise Price in effect immediately
prior to the issuance giving rise to this adjustment by (y) the new Exercise
Price determined in accordance with the immediately preceding sentence.
(h) No adjustment in the Exercise Price or the number of Warrant Shares
issuable upon the exercise of each Warrant is required if the amount of the
adjustment is less than $0.01 or one-hundredth (1/100th) of a share, as the case
may be; provided, however, that any adjustments which by reason of this Section
6.1(h) are not required to be made will be carried forward and given effect in
any subsequent adjustment.
(i) For the purposes of this Section 6.1, the term "shares of Common Stock"
means (1) the class of stock designated as the Common Stock of the Company at
the date hereof or (2) any other class of stock resulting from successive
changes or reclassifications of such shares consisting solely of changes in par
value, or from no par value to par value.
(j) Notwithstanding the foregoing, in any case which this Section 6.1
provides that an adjustment becomes effective immediately after a record date
for an event, the Company may defer until the occurrence of such event (1)
issuing to the Holder of any Warrant exercised after such record date and before
the occurrence of such event the additional securities issuable upon such
conversion before giving effect to such adjustment and (2) paying to the Holder
any amount in cash in lieu of any fraction pursuant to Section 7.
(k) If the Company takes any action affecting the Common Stock, other than
action described in this Section 6.1, which in the opinion of the Board of
Directors of the Company would materially adversely affect the conversion rights
of the Holder of the Warrants, the Exercise Price for the Warrants and/or the
number of Warrant Shares received upon exercise of the Warrant may be adjusted,
to the extent permitted by law, in such manner, if
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any, and at such time, as such Board may determine in good faith to be equitable
in the circumstances. Failure of the Board of Directors of the Company to
provide for any such adjustment prior to the effective date of any such action
by the Company affecting the Common Stock will be evidence that the Board of
Directors of the Company has determined that it is equitable to make no
adjustments in the circumstances.
(l) Notwithstanding any of the foregoing, no adjustment will be made to the
Exercise Price or to the number of shares purchasable upon exercise of the
Warrants with respect to any issuance or offering by the Company, by dividend on
Common Stock or otherwise, of any LTWs (as defined in the Investment Agreement),
provided, however, that for so long as this Warrant is held by the First
Investor, if the average total trading price of all such issued instruments on a
national securities exchange for the 20 trading days beginning ten days after
issuance of the LTWs, or, if the LTWs are not traded on a national securities
exchange, the total fair market value of all LTWs issued as determined by the
Board of Directors (subject to appraisal by a mutually agreeable firm if the
Holder disputes such valuation), is greater than $100 million, then the Exercise
Price will be reduced by an amount equal to (1) the difference between the
average total trading price and $100 million multiplied by (2) 0.2214, or if
the Second Closing under the Investment Agreement does not occur for any
reason, 0.1980, and then divided by (3) the Total Number where the "Total
Number" has the meaning provided for in the Investment Agreement adjusted such
that if, at any time after the date of the Investment Agreement, the Company
(A) declares or pays a dividend on any Common Stock payable in Common Stock,
(B) subdivides any Common Stock or (C) combines any Common Stock into a smaller
number of shares, then, in each case, the Total Number after such event shall
be the number of shares of Common Stock that a holder of the Total Number
immediately prior to such event would hold thereafter as a result of such event.
6.2 Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Exercise
Price or increase the number of Warrant Shares for which the Warrant may be
exercised to any amount deemed appropriate by the Board of Directors of the
Company; provided, however, that if the Company elects to make such adjustment,
such adjustment will remain in effect for at least a 15-day period, after which
time the Company may, at its option, reinstate the Exercise Price or number of
Warrant Shares in effect prior to such reduction, subject to any interim
adjustments pursuant to Section 6.1.
6.3 Notice of Adjustment. Whenever the Exercise Price or number of
Warrant Shares is adjusted, the Chief Financial Officer of the Company will
compute the adjustments in accordance with the foregoing provisions and will
prepare a certificate setting forth the adjustments and showing in reasonable
detail the facts upon which such adjustments are based. A copy of such
certificate will be filed promptly with the Transfer Agent. Promptly after
delivery of such certificate, the Company will prepare a notice setting forth
the adjustments and the date on which such adjustments become effective and will
mail such notice of such adjustments to the Holder at the last address of the
Holder as shown on the Warrants Register.
6.4 Miscellaneous. Except as provided in Section 6.1, no adjustment in
respect of any dividends or other payments or distributions
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made to Holders of securities issuable upon exercise of Warrants will be made
during the term of a Warrant or upon the exercise of a Warrant. To the extent
(but only to the extent) that the Holder's rights hereunder have been protected
by the Holder's exercise (at Holder's election and reasonable allocation) of its
preemptive rights under the Investment Agreement, no adjustments will be made to
the Exercise Price or the number of Warrant Shares. In addition, notwithstanding
any of the foregoing, no such adjustment will be made for the issuance or
conversion of (a) any Securities (as defined in the Investment Agreement) or (b)
any rights under the Rights Agreement (as defined in the Investment Agreement)
or any successor agreement unless such rights become exercisable (in which case
they will be deemed for purposes of this Agreement to have been issued at the
time they become exercisable).
6.5 Statement on Certificate. Irrespective of any adjustments in the
number or kind of securities purchasable upon the exercise of the Warrants or
the Exercise Price, the Certificates may continue to express the same price and
number and kind of shares as are stated in this Certificate.
6.6 Definitions. For purposes of Section 6.1, the following terms shall
have the following meanings:
"Business Combination" means (1) any consolidation, merger, share
exchange or similar business combination transaction involving the
Company with any person or (2) the sale, assignment, conveyance,
transfer, lease or other disposition by the Company of all or
substantially all of its assets.
"Excluded Stock" means shares of Common Stock issued by the Company as
a stock dividend payable in shares of Common Stock, or upon any
subdivision or split-up of the outstanding shares of capital stock in
each case which is subject to Section 6.1(e), or upon conversion of
shares of capital stock (but not the issuance of such capital stock
which will be subject to the provisions of Section 6.1(a)(3)).
"Market Price" means, with respect to a particular security, on any
given day, the average of the daily closing prices for 10 consecutive
trading days commencing on the 5th trading day prior to the day in
question or, in case no such reported sale takes place on such day,
the average of the last closing bid and asked prices regular way, in
either case on the principal national securities exchange on which the
applicable security is listed or admitted to trading, or if not listed
or admitted to trading on any national securities exchange, (1) the
average of the daily closing prices for 10 consecutive trading days
commencing on the 5th trading day prior to the day in question
reported by the NASDAQ Stock Market if such security is traded
over-the-counter and
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quoted in the NASDAQ Stock Market, or (2) if such security is so
traded, but not so quoted, the average of the closing reported bid and
asked prices of such security as reported by the NASDAQ Stock Market
or any comparable system, or (3) if such security is not listed on the
NASDAQ Stock Market or any comparable system, the average of the
closing bid and asked prices as furnished by two members of the
National Association of Securities Dealers, Inc. selected from time to
time by the Company for that purpose. If such security is not listed
and traded in a manner that the quotations referred to above are
available for the period required hereunder, the Market Price per
share of Common Stock shall be deemed to be the fair value per share
of such security as determined in good faith by the Board of Directors
of the Company.
"Ordinary Cash Dividends" means regular quarterly cash dividends
generally consistent with past practices, including periodic
increases.
"Pro Rata Repurchases" means any purchase of shares of Common Stock by
the Company or any Affiliate (as defined in the Investment Agreement)
thereof pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or pursuant to any other offer
available to substantially all holders of Common Stock, whether for
cash, shares of capital stock of the Company, other securities of the
Company, evidences of indebtedness of the Company or any other person
or any other property (including, without limitation, shares of
capital stock, other securities or evidences of indebtedness of a
subsidiary of the Company), or any combination thereof, effected while
this Warrant is outstanding; provided, however, that "Pro Rata
Repurchase" shall not include any purchase of shares by the Company or
any Affiliate thereof made directly or indirectly in accordance with
the requirements of Rule 10b-18 as in effect under the Exchange Act or
any tender offer commenced in connection with the transactions in
which this Warrant is issued. The "effective date" of a Pro Rata
Repurchase shall mean the date of acceptance of shares for purchase or
exchange under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata
Repurchase that is not a tender or exchange offer.
"Special Payments" are (x) any payment or series of payments pursuant
to a final, nonappealable judgment or a final settlement or agreement
exceeding in the aggregate $15 million to ▇▇▇▇▇▇
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United Bancorp (including any successor, "▇▇▇▇▇▇") pursuant to the
Termination, Option Cancellation and Settlement Agreement, dated as of
April 28, 2000, between ▇▇▇▇▇▇ and the Company (as amended or
modified, the "▇▇▇▇▇▇ Agreement"), except to the extent that such
payment or payments result or arise from (1) a misrepresentation by
the First Investor in Section 2.3(f) or a breach by the First Investor
of Section 4.1(a) of the Investment Agreement or (2) any actual or
potential "Acquisition Transaction", "Subsequent Transaction" or
"Subsidiary Transaction" (as such terms are defined in the ▇▇▇▇▇▇
Agreement) approved, recommended or authorized by the Board of
Directors of the Company after the date of the Investment Agreement.
SECTION 7. Fractional Interests. The Company may, but will not be required
to, issue fractional Warrant Shares on the exercise of Warrants. If more than
one Warrant is presented for exercise in full at the same time by a Holder, the
exercise thereof will be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would be issuable on the exercise of any Warrant (or
specified portion thereof), the Company may, in its sole discretion, issue such
fraction of a Warrant Share or pay to the Holder of the Warrant an amount in
cash equal to the Current Market Price per share of Common Stock computed as of
the trading day immediately preceding the date the Warrant is presented for
exercise, multiplied by such fraction of a Warrant Share (but in no event less
than an amount equal to such fraction multiplied by the Exercise Price in effect
at such time).
SECTION 8. No Rights as Stockholders; Notices to Holder. Nothing contained
in this Certificate will be construed as conferring upon the Holder or its
permitted transferees the right to vote or to receive dividends (except as
provided in Section 6 hereof) or to consent or to receive notice as stockholders
in respect of any meeting of stockholders of the Company for the election of the
directors of the Company or any other matter, or any rights whatsoever as
stockholders of the Company. However, at any time prior to the expiration of the
Warrants and prior to their exercise, the Company will give reasonable prior
notice to the Holder of any date on which an adjustment pursuant to Section 6 is
scheduled to occur.
SECTION 9. Identity of Transfer Agent. Upon the appointment of any Transfer
Agent for the Preferred Stock, or any other shares of the Company's capital
stock issuable upon the exercise of the Warrants, the Company promptly will
notify the Holder of the name and address of such Transfer Agent.
SECTION 10. Notices. Any notice, except as provided in Section 8 of this
Certificate, or demand authorized by this Certificate to be given by the
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Holder to the Company, will be in writing and will be delivered in person or by
facsimile transmission, or mailed by first class mail, postage prepaid, or by
overnight courier, to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇; confirmation no. (▇▇▇) ▇▇▇-▇▇▇▇ Attention:
Corporate Secretary. The Company may change the address or facsimile numbers to
which notices to it are to be transmitted, delivered or mailed hereunder by
notice to the Holder.
Any notice pursuant to this Certificate by the Company to the Holder
will be in writing and will be delivered by first class mail, postage prepaid,
or by facsimile transmission, by overnight courier, or otherwise delivered by
hand, to the Holder at its address on the books of the Warrants Register or at
the facsimile number specified in writing by the Holder to the Company.
Notices delivered personally will be effective at the time delivered by
hand, notices sent by mail will be effective two days after mailing, notices
sent by facsimile transmission will be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery will be effective on
the next business day after timely delivery to the courier.
SECTION 11. Supplements and Amendments. This Certificate may not be
supplemented, amended or otherwise modified without the prior written consent of
the Holder.
SECTION 12. Successors. All the covenants and provisions of this
Certificate by or for the benefit of the Company will bind and inure to the
benefit of its respective successors and assigns.
SECTION 13. Merger or Consolidation of the Company. The Company will not
merge or consolidate into, or sell, transfer or lease all or substantially all
of its property to, any other corporation unless the successor, transferee or
lessee corporation, as the case may be (if not the Company), expressly assumes
the due and punctual performance and observance of each and every covenant and
condition of this Certificate to be performed and observed by the Company.
SECTION 14. APPLICABLE LAW. THIS CERTIFICATE AND THE WARRANTS EVIDENCED
HEREBY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
SECTION 15. Benefits of this Certificate. Nothing in this Certificate,
express or implied, will be construed to give to any person or entity other than
the Company and the Holder any legal or equitable right, remedy or claim under
this Certificate; and this Certificate will be for the sole and exclusive
benefit of the Company and the Holder.
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SECTION 16. Captions. The captions of the Sections and paragraphs of this
Certificate have been inserted for convenience only and will have no substantive
effect.
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IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed this [_______] day of [_______________], 2000.
DIME BANCORP, INC.
By:
Name:
Title:
Accepted:
[HOLDER]
By:______________________________
Name:
Title:
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90
ELECTION FORM
(To be executed if Holder desires to exercise Warrant)
The undersigned hereby irrevocably elects to exercise the Warrant,
represented by this Certificate, to purchase ___ shares of Common Stock as
provided for herein and upon confirmation from the Company that such shares of
Common Stock will be issued, agrees that it will tender in payment for such
shares of Common Stock payment of the purchase price in full in the form of a
wire transfer of immediately available funds to the order of Dime Bancorp, Inc.
in the amount of $_____________ (unless it has elected Cashless Exercise below),
all in accordance with the terms hereof. The undersigned requests that a
certificate for such shares of Common Stock be registered in the name of
______________________ whose address is ____________________________ and that
such certificate will be delivered to ____________________________ whose address
is ____________________________. If said number of shares of Common Stock is
less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Certificate representing the right to purchase
the remaining balance of the shares of Common Stock be registered in the name of
______________________ whose address is _____________________ and that such
certificate will be delivered to ________________ whose address is
_________________________________.
Dated:________________
________________
(Insert Employer Identification
Number of Holder)
Signature _________________________
Note: Signature must conform in all
respects to name of holder as
specified on the face of this
Certificate in every particular,
without alteration or
enlargement or any change
whatsoever, unless this
Certificate has been assigned.
/ / Cashless Exercise
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ASSIGNMENT
(To be executed only upon
assignment of the Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ (Name and Address of Assignee, Must Be Printed or
Typewritten) the within Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________, Attorney, to transfer said Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated: ______________________
______________________________
Signature of Registered Holder
Note: The above signature must
correspond with the name
as written on the face of
this Certificate in every
particular, without
alteration or enlargement
or any change
whatsoever.
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EXHIBIT 6
FORM OF SERIES B WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS INSTRUMENT AND THE SECURITIES ISSUABLE
UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS
ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN INVESTMENT AGREEMENT, DATED AS OF JULY 6, 2000 (THE "INVESTMENT
AGREEMENT"), BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN (THE "FIRST INVESTOR"), A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
EXERCISABLE AT ANY TIME UNTIL 5:00 P.M.,
NEW YORK CITY TIME, ON [____________]* UNLESS
EXTENDED AS PROVIDED BELOW.
DIME BANCORP, INC.
WARRANT
No. ____
CERTIFICATE FOR_________ WARRANTS TO
PURCHASE SHARES OF
SERIES B JUNIOR VOTING PREFERRED STOCK
OF DIME BANCORP, INC.
This Instrument (this "Certificate") certifies that, for value
received, [____________________________], or its registered assigns (the
"Holder"), is the owner of ______________________ (__________) Warrants (as
defined below), each of which entitles the Holder to purchase at any time until
5:00 p.m., New
--------
* SEVEN YEARS AFTER ISSUE.
93
York City time, on [_____________],* at the exercise price per share set forth
herein (the "Exercise Price"), one share of Series B junior voting preferred
stock, par value $0.01 per share (the "Preferred Stock"), of Dime Bancorp, Inc.,
a Delaware corporation (the "Company"). The number and type of shares
purchasable upon exercise of each Warrant and the Exercise Price will be subject
to adjustment from time to time as herein provided. In this Certificate, the
right to purchase each share of Preferred Stock is referred to as a "Warrant";
the shares of Preferred Stock or, pursuant to the terms hereof, other
securities, issuable upon exercise of the Warrants are referred to as the
"Warrant Shares". Anything to the contrary notwithstanding, Warrants will not
entitle the Holder to purchase or otherwise acquire any interest in any shares
of common stock, par value $0.01 per share ("Common Stock"), of the Company, and
the term "Warrant Shares" does not include Common Stock. Certain rights of
holders of shares of Preferred Stock are determined by means of a "Reference
Package" as defined in the certificate of incorporation of the Company with
respect to the Preferred Stock.
Each Warrant possesses the following terms, conditions and provisions,
to which the Holder agrees by acceptance hereof:
SECTION 1. Registration; Transferability; Exchange of Certificate.
1.1 Registration. The Company will number and register each Warrant in
a register (the "Warrants Register") maintained at the office of the Company
(the "Office") as they are issued by the Company. The Company will be entitled
to treat the registered Holder of any Warrant, as set forth in the Warrants
Register, as its owner for all purposes and will not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person. The Warrants are transferable only on the Warrants Register maintained
at the Office upon delivery of the certificate or certificates evidencing such
Warrants, duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, will be
deposited and remain with the Company.
1.2 Exchange of Certificates. Subject to the provisions herein, each
Certificate may be exchanged for another Certificate(s) entitling the Holder to
purchase a like aggregate number of Warrant Shares as this Certificate then
entitles such Holder to purchase. If the Holder desires to exchange this
Certificate, it must deliver such request in writing to the Company and
surrender, properly endorsed if required by the Company, this Certificate.
Thereupon, the Company will sign and deliver to the entitled person the
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requested new Certificate.
1.3 Exchange for Common Stock Warrants. At such time as the Preferred
Stock converts into Common Stock in accordance with the terms of the certificate
of incorporation of the Company with respect to the Preferred Stock, each
Warrant will be converted into, and exchanged for, a number of warrants to
purchase Common Stock (each, a "Common Warrant") equal to (a) the number of
shares of Preferred Stock then purchasable on exercise of each Warrant
multiplied by (b) the number of shares of Common Stock into which each share of
Preferred Stock has been converted. The Common Warrants will be issued in the
form of Exhibit 5 to the Investment Agreement, registered in the name of the
Holder, and will have (a) an expiration date that is the same as the Expiration
Date then in effect for the Warrants and (b) an exercise price per share of
Common Stock that is equal to (1) the Exercise Price then in effect for the
Warrants, divided by (2) the number of shares of Common Stock into which each
share of Preferred Stock has been converted. Promptly after receiving notice
from the Company of the conversion of the Preferred Stock, the Holder will
surrender this Certificate to the Company and will be entitled to receive a
certificate for the Common Warrants issuable on such conversion. Until
surrendered, this Certificate will be deemed to represent the Common Warrants
issuable on such conversion. Notwithstanding the foregoing, if a Warrant Share
shall include any securities or property other than one share of Preferred Stock
at the time of such conversion, an appropriate adjustment will be made to the
Common Warrants (consistent with the terms thereof).
SECTION 2. Term of Warrants; Exercise of Warrants.
2.1 Term of Warrants. Subject to the terms of this Certificate, the
Holder has the right, exercisable until 5:00 p.m., New York City time, on
[_____________]* (the "Expiration Date") to purchase from the Company (and the
Company will issue and sell to the Holder of the Warrants represented hereby)
such number of Warrant Shares that the Holder may at the time be entitled to
purchase, or any lesser number of Warrant Shares requested by the Holder. Each
Warrant not exercised prior to 5:00 p.m., New York City time, on the Expiration
Date will become void.
2.2 Exercise of Warrants. (a) The Warrants may be exercised in whole or
in part at any time upon surrender to the Company, at its Office, of this
Certificate, together with the Election Form attached hereto duly completed and
signed. Such surrender may be by facsimile transmission;
--------
* SEVEN YEARS AFTER ISSUE.
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95
provided, however, that the Company will not be obligated to issue any Warrant
Shares in respect of this Certificate and such Election Form until it has
received the original versions of this Certificate and such Election Form. The
earlier of the receipt of such facsimile transmission or the receipt of such
original certificate and form is referred to herein as the "Exercise Date".
Promptly following the Exercise Date, the Holder will deliver, if it has not
already done so, (1) original versions of this Certificate and the Election Form
and (2) a bank or certified check or wire transfer of immediately available
United States funds payable to the Company in an amount equal to the product of
the Exercise Price multiplied by the number of Warrant Shares being purchased
upon such exercise (the "Aggregate Exercise Price"). "Business Day" means any
day other than a Saturday, Sunday, or a day in which banking institutions in the
City of New York, New York are authorized or obligated by law or executive order
to close.
(b) Upon the surrender of this Certificate, with the Election Form duly
executed, and payment of the Exercise Price as aforesaid, the Company will
promptly cause to be issued and delivered with all reasonable dispatch to or
upon the written order of the Holder and in such name or names as the Holder may
designate a certificate(s) for the number of Warrant Shares so purchased,
together, at the option of the Company as provided in Section 7 hereof, with
cash in respect of any fractional Warrant Shares otherwise issuable upon such
surrender. Payment of the aggregate Exercise Price will be made by wire transfer
of immediately available funds. Any such Warrant Shares so purchased will be
deemed issued as of the Exercise Date.
(c) If the Holder of this Certificate exercises fewer than all the
Warrants at any time prior to the Expiration Date, a new Certificate evidencing
the remaining unexercised Warrants will be issued to the Holder.
2.3 Compliance with Government Regulations. The Company covenants that
if any Warrant Shares required to be reserved for purposes of the exercise of
Warrants require, under any Federal or state law or applicable governing rule or
regulation of any national securities exchange, registration with or approval of
any governmental authority, or listing on any such national securities exchange,
before such Warrant Shares may be issued upon exercise, the Company will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved by such governmental authority or listed on the relevant
national securities exchange, as the case may be; provided, however, that in no
event will such Warrant Shares be issued, and the Company is hereby authorized
to suspend the exercise of all Warrants, for the period during which such
registration, approval or listing is required but not in effect (the "Suspension
Period"); and provided, further, that, if a Suspension Period is in effect, the
term of the Warrants will be extended for the equivalent number of days of such
Suspension Period (the "Extension
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Period") with such Extension Period beginning on the later of (a) the Expiration
Date or (b) the date of the end of any previously established Suspension Period.
The Company will give prompt notice of any such suspension and will promptly
return this Certificate and payment of the Exercise Price thereof to the Holder
if such Holder tendered this Certificate and Exercise Price precipitating or
during such Suspension Period and will promptly give notice of the lifting of
any such suspension and the commencement of any such Extension Period.
2.4 OTS Approval. Anything herein to the contrary notwithstanding, the
First Investor hereby acknowledges and agrees that its exercise of Warrants is
subject to the condition that it will have first received any and all necessary
approvals, authorizations and consents of the Office of Thrift Supervision or
any other relevant Governmental Entity (as defined in the Investment Agreement)
necessary to permit such exercise.
2.5 Exercise Price. The Exercise Price per share at which each Warrant
Share will be purchased upon exercise of each Warrant is the product of (a)
$21.50 and (b) the number of shares of Common Stock initially comprising the
Reference Package. The Exercise Price is subject to adjustment as set forth
herein, but will not be less than $0.01.
SECTION 3. Payment of Taxes. The Company will pay documentary, stamp or
similar issue or transfer taxes, if any, that may be payable in respect of the
issuance or delivery of any Warrant or of the Warrant Shares issuable upon the
exercise of such Warrants; provided, however, that the Company is not required
to pay any tax in respect of any registration or transfer involved in the
issuance or delivery of any Warrant or the issuance or delivery of certificates
for Warrant Shares in a name other than the Holder.
SECTION 4. Mutilated or Missing Certificates. If this Certificate is
mutilated, lost, stolen or destroyed, the Company will issue and deliver in
substitution for and upon cancellation of the mutilated Certificate, or in
substitution for the Certificate lost, stolen or destroyed, a new Certificate of
like tenor and representing an equivalent right or interest, but only upon, in
the case of a lost, stolen or destroyed certificate, receipt of evidence
satisfactory to the Company of such loss, theft or destruction.
SECTION 5. Reservation and Availability of Warrant Shares; Purchase and
Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The Company will reserve and
keep available free from preemptive rights, out of its authorized but unissued
shares of Preferred Stock, the full number of Warrant Shares deliverable upon
the exercise of all outstanding Warrants evidenced by this Certificate. The
Company or, if appointed, a transfer agent (a "Transfer Agent")
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will be irrevocably authorized and directed at all times to reserve such number
of authorized shares of Preferred Stock as are required for such purpose. The
Company will keep a copy of this Certificate on file with each Transfer Agent.
The Company will furnish such Transfer Agent with a copy of all notices of
adjustments and certificates related thereto which are transmitted to the Holder
pursuant to Section 6 hereof.
(b) The Company agrees that all Warrant Shares issuable upon exercise
of Warrants will, upon issuance, be duly authorized and validly issued, and
fully paid and nonassessable shares of Preferred Stock, with no personal
liability attaching to the ownership thereof, free from preemptive rights and
free from all taxes with respect to the issuance thereof, and all liens,
charges, and security interests.
5.2 Warrant Shares Record Date. Each person in whose name any stock
certificate for Warrant Shares is issued will for all purposes be deemed to have
become the holder of record of the Warrant Shares represented thereby on, and
such stock certificate will be dated as of, the Exercise Date relating to such
Warrant Shares (unless exercise is then suspended in accordance with Section
2.3).
5.3 Purchase of Warrants by the Company. The Company has the right,
except as limited by law, other agreements or herein, to purchase or otherwise
acquire in negotiated transactions Warrants evidenced hereby at such times, in
such manner and for such consideration as it may deem appropriate.
5.4 Cancellation of Warrants. Any Certificate surrendered for exchange,
substitution, transfer or exercise in whole or in part will be cancelled by the
Company and retired.
SECTION 6. Adjustment of Exercise Price. The Exercise Price and the number
of Warrant Shares issuable on Exercise of each Warrant are subject to adjustment
from time to time as described in this Section 6. All calculations under this
Section 6 will be made to the nearest one-hundredth of a cent or to the nearest
one-hundredth of a share, as the case may be.
6.1 Anti-dilution Adjustments. Subject to Section 6.4, the following
adjustments will be made, to the extent (but only to the extent) that an
appropriate adjustment has not been made to the Reference Package:
(a) Common Stock Issued at Less than Market Value. If the Company
issues or sells any Common Stock other than Excluded Stock without consideration
or for consideration per share less than the Market Price of the Common Stock
(provided, however, that no sale of securities pursuant to a bona fide
underwritten public offering will be deemed to be for less than Market Price),
as of the day of such issuance or sale, the Exercise Price in effect
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immediately prior to each such issuance or sale will immediately (except as
provided below) be reduced to the price determined by multiplying the Exercise
Price, in effect immediately prior to such issuance or sale, by a fraction, (x)
the numerator of which shall be (A) the number of shares of Common Stock
outstanding immediately prior to such issuance or sale plus (B) the number of
shares of Common Stock which the aggregate consideration received by the Company
for the total number of such additional shares of Common Stock so issued or sold
would purchase at the Market Price on the last trading day immediately preceding
such issuance or sale and (y) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such issue or sale. In such
event, the number of Warrant Shares issuable upon the exercise of each Warrant
shall be increased to the number obtained by dividing (x) the product of (A) the
number of Warrant Shares issuable upon the exercise of each Warrant before such
adjustment, and (B) the Exercise Price in effect immediately prior to the
issuance giving rise to this adjustment by (y) the new Exercise Price determined
in accordance with the immediately preceding sentence. For the purposes of any
adjustment of the Exercise Price and the number of Warrant Shares issuable upon
exercise of each Warrant pursuant to this Section 6.1(a), the following
provisions shall be applicable:
(1) In the case of the issuance of Common Stock for cash, the amount of
the consideration received by the Company shall be deemed to be the
amount of the cash proceeds received by the Company for such Common
Stock before deducting therefrom any discounts or commissions allowed,
paid or incurred by the Company for any underwriting or otherwise in
connection with the issuance and sale thereof.
(2) In the case of the issuance of Common Stock (otherwise than upon the
conversion of any shares of capital stock or other securities of the
Company) for a consideration in whole or in part other than cash,
including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other
than cash shall be deemed to be the fair value thereof as determined
by the Board of Directors; provided, however, that such fair value as
determined by the Board of Directors shall not exceed the aggregate
Market Price of the shares of Common Stock being issued as of the date
the Board of Directors authorizes the issuance of such shares.
(3) In the case of the issuance of (A) options, warrants or other rights
to purchase or acquire Common Stock (whether or not at the time
exercisable) or (B) securities by their terms convertible into or
exchangeable for Common Stock (whether or not at the time so
convertible or exchangeable) or options, warrants or rights to
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purchase such convertible or exchangeable securities (whether or not
at the time exercisable):
(i) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other
rights to purchase or acquire Common Stock shall be deemed to
have been issued at the time such options, warrants or rights are
issued and for a consideration equal to the consideration
(determined in the manner provided in Sections 6.1(a)(1) and
(2)), if any, received by the Company upon the issuance of such
options, warrants or rights plus the minimum purchase price
provided in such options, warrants or rights for the Common Stock
covered thereby;
(ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or acquire such
convertible or exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options,
warrants or rights were issued and for a consideration equal to
the consideration, if any, received by the Company for any such
securities and related options, warrants or rights (excluding any
cash received on account of accrued interest or accrued
dividends), plus the additional consideration (determined in the
manner provided in Section 6.1(a)(1) and (2)), if any, to be
received by the Company upon the conversion or exchange of such
securities, or upon the exercise of any related options, warrants
or rights to purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof;
(iii) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights
or conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by
the company upon such exercise, conversion or exchange, but
excluding changes resulting from the antidilution provisions
thereof (to the extent comparable to the antidilution provisions
contained herein), the Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant as then in effect
shall forthwith be readjusted to such Exercise Price
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and number of Warrant Shares as would have been obtained had an
adjustment been made upon the issuance of such options, warrants
or rights not exercised prior to such change, or of such
convertible or exchangeable securities not converted or exchanged
prior to such change, upon the basis of such change;
(iv) on the expiration or cancellation of any such options, warrants
or rights (without exercise), or the termination of the right to
convert or exchange such convertible or exchangeable securities
(without exercise), if the Exercise Price and the number of
Warrant Shares issuable upon exercise of this Warrant shall have
been adjusted upon the issuance thereof, the Exercise Price and
the number of Warrant Shares issuable upon exercise of this
Warrant shall forthwith be readjusted to such Exercise Price and
number of Warrant Shares as would have been obtained had an
adjustment been made upon the issuance of such options, warrants,
rights or such convertible or exchangeable securities on the
basis of the issuance of only the number of shares of Common
Stock actually issued upon the exercise of such options, warrants
or rights, or upon the conversion or exchange of such convertible
or exchangeable securities; and
(v) if the Exercise Price and the number of Warrant Shares issuable
upon exercise of this Warrant shall have been adjusted upon the
issuance of any such options, warrants, rights or convertible or
exchangeable securities, no further adjustment of the Exercise
Price and the number of Warrant Shares issuable upon exercise of
this Warrant shall be made for the actual issuance of Common
Stock upon the exercise, conversion or exchange thereof;
provided, however, that no increase in the Exercise Price shall
be made pursuant to subclauses (i) and (ii) of this Section
6.1(a)(3).
(4) Notwithstanding anything to the contrary in this Section 6.1(a), no
adjustment will be required in respect of issuances of Common Stock
(or options to purchase Common Stock) pursuant to stock options
granted prior to the date hereof. Additionally, notwithstanding
anything to the contrary in this Section 6.1(a), adjustments will be
made for stock options and restricted stock granted to employees after
the date hereof pursuant to the terms of Section 6.1(b) rather than
Section 6.1(a).
(b) Employee Stock Options and Restricted Stock Grants. If
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the Company issues or sells any Common Stock or its equivalent to employees at a
price of less than $17.50 per share, or grants any options to employees where
the minimum exercise price of such options is less than $17.50 per share of
Common Stock, then the number of Warrant Shares and the Exercise Price will be
adjusted in accordance with the provisions of Section 6.1(a) but treating the
Market Price as $17.50.
Notwithstanding anything to the contrary set forth in this Section
6.1(b), no adjustment will be required in respect of issuance of employee stock
options or the sale of restricted stock to employees after adjustments have been
made pursuant to this Section 6.1(b) for the issuance of 5 million shares and
options at prices of less than $17.50 per share.
(c) Certain Repurchases of Common Stock. In case the Company effects a
Pro Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to
the price determined by multiplying the Exercise Price in effect immediately
prior to the effective date of such Pro Rata Repurchase by a fraction of which
the numerator shall be (x) the product of (A) the number of shares of Common
Stock outstanding immediately before such Pro Rata Repurchase and (B) the Market
Price of a share of Common Stock on the trading day immediately preceding the
first public announcement by the Company or any of its Affiliates of the intent
to effect such Pro Rata Repurchase, minus (y) the aggregate purchase price of
the Pro Rata Repurchase, and of which the denominator shall be the product of
(x) the number of shares of Common Stock outstanding immediately prior to such
Pro Rata Repurchase minus the number of shares of Common Stock so repurchased
and (y) the Market Price per share of Common Stock on the trading day
immediately preceding the first public announcement of such Pro Rata Repurchase.
In such event, the number of Warrant Shares issuable upon the exercise of each
Warrant shall be increased to the number obtained by dividing (x) the product of
(A) the number of Warrant Shares issuable upon the exercise of each Warrant
before such adjustment, and (B) the Exercise Price in effect immediately prior
to the Pro Rata Repurchase giving rise to this adjustment by (y) the new
Exercise Price determined in accordance with the immediately preceding sentence.
(d) Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 6.1(e)), any Warrant Shares issued or issuable upon
exercise of this Warrant after the date of such Business Combination or
reclassification will be exchangeable for the number of shares of stock or other
securities or property (including cash) to which the Warrant Shares issuable (at
the time of such consolidation, merger, sale, lease or conveyance) upon exercise
of this Warrant immediately prior to such Business
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Combination or reclassification would have been entitled upon such Business
Combination or reclassification; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interests thereafter
of the Holder shall be appropriately adjusted so as to be applicable, as nearly
as may reasonably be, to any shares of stock or other securities or property
thereafter deliverable on the exercise of this Warrant. In determining the kind
and amount of stock, securities or the property receivable upon consummation of
such Business Combination, if the holders of Common Stock have the right to
elect the kind or amount of consideration receivable upon consummation of such
Business Combination, then the Holder shall have the right to make a similar
election upon exercise of this Warrant with respect to the number of shares of
stock or other securities or property which the Holder will receive upon
exercise of this Warrant.
(e) Stock Splits, Subdivisions, Reclassifications or Combinations. If
the Company shall (1) declare a dividend or make a distribution on its Common
Stock in shares of Common Stock, (2) subdivide or reclassify the outstanding
shares of Common Stock into a greater number of shares, or (3) combine or
reclassify the outstanding Common Stock into a smaller number of shares, the
number of Warrant Shares issuable upon exercise of this Warrant at the time of
the record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the Holder after such date shall be entitled to purchase the number of
Warrant Shares which such holder would have owned or been entitled to receive
after such date had this Warrant been exercised immediately prior to such date.
Successive adjustments in the Exercise Price shall be made whenever any event
specified above shall occur. In such event the Exercise Price in effect at the
time of the record date for such dividend or distribution or the effective date
of such subdivision, combination or reclassification shall be adjusted to the
number obtained by dividing (x) the product of (A) the number of Warrant Shares
issuable upon the exercise of this Warrant before such adjustment and (B) the
Exercise Price in effect immediately prior to the issuance giving rise to this
adjustment by (y) the new number of shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.
(f) Other Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of shares of its Common Stock
(1) of shares of any class other than its Common Stock or (2) of evidence of
indebtedness of the Company or any Subsidiary or (3) of assets, or (4) of rights
or warrants (in each case excluding (A) Ordinary Cash Dividends, (B) any
dividends or distribution referred to in Section 6.1(e) and (C) any LTWs as
defined in the Investment Agreement), in each such case the Exercise Price in
effect on the record date will be reduced by an amount equal, in the case of a
distribution in cash, to the amount thereof payable per share of the Common
Stock, or in the case of any other distribution, to the fair value thereof per
share of the Common Stock as determined by the Board of Directors (in each
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case multiplied by the number of shares of Common Stock then comprising the
Reference Package). Such reductions shall take effect on the record date for
such distribution. In such event, the number of Warrant Shares issuable upon the
exercise of each Warrant shall be increased to the number obtained by dividing
(x) the product of (A) the number of Warrant Shares issuable upon the exercise
of this Warrant before such adjustment, and (B) the Exercise Price in effect
immediately prior to the issuance giving rise to this adjustment by (y) the new
Exercise Price determined in accordance with the immediately preceding sentence.
In the event that such distribution is not so made, the Exercise Price and the
number of Warrant Shares issuable upon exercise of this Warrant then in effect
shall be readjusted, effective as of the date when the Board determines not to
distribute such shares, evidences of indebtedness, assets, rights or warrants,
as the case may be, to the Exercise Price that would then be in effect and the
number of Warrant Shares that would then be issuable upon exercise of this
Warrant if such record date and distribution had not been fixed.
(g) Adjustments for Special Payments. In the event that the Company
makes any Special Payments, for so long as this Warrant is held by the First
Investor the Exercise Price in effect immediately prior to such Special Payments
will be reduced by an amount equal to the product of the number of shares of
Common Stock then comprising the Reference Package and the quotient of (x) the
amount of such Special Payments multiplied by 24.9%, divided by (y) the
aggregate number of shares of Common Stock underlying (or comprising the
reference package of any capital stock underlying) all warrants to purchase
capital stock of the Company theretofore issued to Holder under the Investment
Agreement (including the Warrants). In such event, the number of Warrant Shares
issuable upon exercise of each Warrant shall be increased to the number obtained
by dividing (x) the product of (A) the number of Warrant Shares issuable upon
exercise of each Warrant before such adjustment, and (B) the Exercise Price in
effect immediately prior to the issuance giving rise to this adjustment by (y)
the new Exercise Price determined in accordance with the immediately preceding
sentence.
(h) No adjustment in the Exercise Price or the number of Warrant Shares
issuable upon the exercise of each Warrant is required if the amount of the
adjustment is less than $0.01 or one-hundredth (1/100th) of a share, as the case
may be; provided, however, that any adjustments which by reason of this Section
6.1(h) are not required to be made will be carried forward and given effect in
any subsequent adjustment.
(i) For the purposes of this Section 6.1, the term "shares of Common
Stock" means (1) the class of stock designated as the Common Stock of the
Company at the date hereof or (2) any other class of stock resulting from
successive changes or reclassifications of such shares consisting solely of
changes in par value, or from no par value to par value.
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(j) Notwithstanding the foregoing, in any case which this Section 6.1
provides that an adjustment becomes effective immediately after a record date
for an event, the Company may defer until the occurrence of such event (1)
issuing to the Holder of any Warrant exercised after such record date and before
the occurrence of such event the additional securities issuable upon such
conversion before giving effect to such adjustment and (2) paying to the Holder
any amount in cash in lieu of any fraction pursuant to Section 7.
(k) If the Company takes any action affecting the Common Stock, other
than action described in this Section 6.1, which in the opinion of the Board of
Directors of the Company would materially adversely affect the conversion rights
of the Holder of the Warrants, the Exercise Price for the Warrants and/or the
number of Warrant Shares received upon exercise of the Warrant may be adjusted,
to the extent permitted by law, in such manner, if any, and at such time, as
such Board may determine in good faith to be equitable in the circumstances.
Failure of the Board of Directors of the Company to provide for any such
adjustment prior to the effective date of any such action by the Company
affecting the Common Stock will be evidence that the Board of Directors of the
Company has determined that it is equitable to make no adjustments in the
circumstances.
(l) Notwithstanding any of the foregoing, no adjustment will be made to
the Exercise Price or to the number of shares purchasable upon exercise of the
Warrants with respect to any issuance or offering by the Company, by dividend on
Common Stock or otherwise, of any LTWs (as defined in the Investment Agreement),
provided, however, that for so long as this Warrant is held by the First
Investor, if the average total trading price of all such issued instruments on a
national securities exchange for the 20 trading days beginning ten days after
issuance of the LTWs, or, if the LTWs are not traded on a national securities
exchange, the total fair market value of all LTWs issued as determined by the
Board of Directors (subject to appraisal by a mutually agreeable firm if the
Holder disputes such valuation), is greater than $100 million, then the Exercise
Price will be reduced by an amount (to be multiplied by the number of shares of
Common Stock then comprising the Reference Package) equal to (1) the difference
between the average total trading price and $100 million multiplied by (2)
0.2214, or if the Second Closing under the Investment Agreement does not occur
for any reason, 0.1980, and then divided by (3) the Total Number where the
"Total Number" has the meaning provided for in the Investment Agreement adjusted
such that if, at any time after the date of the Investment Agreement, the
Company (A) declares or pays a dividend on any Common Stock payable in Common
Stock, (B) subdivides any Common Stock or (C) combines any Common Stock into a
smaller number of shares, then, in each case, the Total Number after such event
shall be the number of shares of Common Stock that a holder of the Total Number
immediately prior to such event would hold thereafter as a result of such event.
6.2 Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Exercise
Price or increase the number of Warrant Shares for which the Warrant may be
exercised to any amount deemed appropriate by the Board of Directors of the
Company; provided, however, that if the Company elects to make such adjustment,
such adjustment will remain in effect for at least a 15- day period, after which
time the Company may, at its option, reinstate the
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Exercise Price or number of Warrant Shares in effect prior to such reduction,
subject to any interim adjustments pursuant to Section 6.1.
6.3 Notice of Adjustment. Whenever the Exercise Price or number of
Warrant Shares is adjusted, the Chief Financial Officer of the Company will
compute the adjustments in accordance with the foregoing provisions and will
prepare a certificate setting forth the adjustments and showing in reasonable
detail the facts upon which such adjustments are based. A copy of such
certificate will be filed promptly with the Transfer Agent. Promptly after
delivery of such certificate, the Company will prepare a notice setting forth
the adjustments and the date on which such adjustments become effective and will
mail such notice of such adjustments to the Holder at the last address of the
Holder as shown on the Warrants Register.
6.4 Miscellaneous. Except as provided in Section 6.1, no adjustment in
respect of any dividends or other payments or distributions made to Holders of
securities issuable upon exercise of Warrants will be made during the term of a
Warrant or upon the exercise of a Warrant. No adjustment will be made to the
Warrant (including the Warrant Share number or the Exercise Price) with respect
to any event that results in an adjustment to the Reference Package. To the
extent (but only to the extent) that the Holder's rights hereunder have been
protected by the Holder's exercise (at Holder's election and reasonable
allocation) of its preemptive rights under the Investment Agreement, no
adjustments will be made to the Exercise Price or the number of Warrant Shares.
In addition, notwithstanding any of the foregoing, no such adjustment will be
made for the issuance or conversion of (a) any Securities (as defined in the
Investment Agreement) or (b) any rights under the Rights Agreement (as defined
in the Investment Agreement) or any successor agreement unless such rights
become exercisable (in which case they will be deemed for purposes of this
Agreement to have been issued at the time they become exercisable).
6.5 Statement on Certificate. Irrespective of any adjustments in the
number or kind of securities purchasable upon the exercise of the Warrants or
the Exercise Price, the Certificates may continue to express the same price and
number and kind of shares as are stated in this Certificate.
6.6 Definitions. For purposes of Section 6.1, the following terms shall
have the following meanings:
"Business Combination" means (1) any consolidation, merger, share
exchange or similar business combination transaction involving the
Company with any person or (2) the sale, assignment, conveyance,
transfer, lease or other disposition by the Company of all or
substantially all of its assets.
"Excluded Stock" means shares of Common Stock issued by the
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Company as a stock dividend payable in shares of Common Stock, or upon
any subdivision or split-up of the outstanding shares of capital stock
in each case which is subject to Section 6.1(e), or upon conversion of
shares of capital stock (but not the issuance of such capital stock
which will be subject to the provisions of Section 6.1(a)(3)).
"Market Price" means, with respect to a particular security, on any
given day, the average of the daily closing prices for 10 consecutive
trading days commencing on the 5th trading day prior to the day in
question or, in case no such reported sale takes place on such day,
the average of the last closing bid and asked prices regular way, in
either case on the principal national securities exchange on which the
applicable security is listed or admitted to trading, or if not listed
or admitted to trading on any national securities exchange, (1) the
average of the daily closing prices for 10 consecutive trading days
commencing on the 5th trading day prior to the day in question
reported by the NASDAQ Stock Market if such security is traded
over-the-counter and quoted in the NASDAQ Stock Market, or (2) if such
security is so traded, but not so quoted, the average of the closing
reported bid and asked prices of such security as reported by the
NASDAQ Stock Market or any comparable system, or (3) if such security
is not listed on the NASDAQ Stock Market or any comparable system, the
average of the closing bid and asked prices as furnished by two
members of the National Association of Securities Dealers, Inc.
selected from time to time by the Company for that purpose. If such
security is not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder, the
Market Price per share of Common Stock shall be deemed to be the fair
value per share of such security as determined in good faith by the
Board of Directors of the Company.
"Ordinary Cash Dividends" means regular quarterly cash dividends
generally consistent with past practices, including periodic
increases.
"Pro Rata Repurchases" means any purchase of shares of Common Stock by
the Company or any Affiliate (as defined in the Investment Agreement)
thereof pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or pursuant to any other offer
available to substantially all holders of Common Stock, whether for
cash, shares of capital stock of the Company, other securities of the
Company, evidences of
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indebtedness of the Company or any other person or any other property
(including, without limitation, shares of capital stock, other
securities or evidences of indebtedness of a subsidiary of the
Company), or any combination thereof, effected while this Warrant is
outstanding; provided, however, that "Pro Rata Repurchase" shall not
include any purchase of shares by the Company or any Affiliate thereof
made directly or indirectly in accordance with the requirements of
Rule 10b-18 as in effect under the Exchange Act or any tender offer
commenced in connection with the transactions in which this Warrant is
issued. The "effective date" of a Pro Rata Repurchase shall mean the
date of acceptance of shares for purchase or exchange under any tender
or exchange offer which is a Pro Rata Repurchase or the date of
purchase with respect to any Pro Rata Repurchase that is not a tender
or exchange offer.
"Special Payments" are any payment or series of payments pursuant to a
final, nonappealable judgment or a final settlement or agreement
exceeding in the aggregate $15 million to ▇▇▇▇▇▇ United Bancorp
(including any successor, "▇▇▇▇▇▇") pursuant to the Termination,
Option Cancellation and Settlement Agreement, dated as of April 28,
2000, between ▇▇▇▇▇▇ and the Company (as amended or modified, the
"▇▇▇▇▇▇ Agreement"), except to the extent that such payment or
payments result or arise from (1) a misrepresentation by the First
Investor in Section 2.3(f) or a breach by the First Investor of
Section 4.1(a) of the Investment Agreement or (2) any actual or
potential "Acquisition Transaction", "Subsequent Transaction" or
"Subsidiary Transaction" (as such terms are defined in the ▇▇▇▇▇▇
Agreement) approved, recommended or authorized by the Board of
Directors of the Company after the date of the Investment Agreement.
SECTION 7. Fractional Interests. The Company may, but will not be required
to, issue fractional Warrant Shares on the exercise of Warrants. If more than
one Warrant is presented for exercise in full at the same time by a Holder, the
exercise thereof will be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would be issuable on the exercise of any Warrant (or
specified portion thereof), the Company may, in its sole discretion, issue such
fraction of a Warrant Share or pay to the Holder of the Warrant an amount in
cash equal to the product of (a) the Current Market Price per share of Common
Stock computed as of the trading day immediately preceding the date the Warrant
is presented for exercise and (b) the Reference Purchase as of such date,
multiplied by such fraction of a Warrant Share (but in no event less than an
amount equal to such fraction multiplied by the Exercise Price in effect at such
time).
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SECTION 8. No Rights as Stockholders; Notices to Holder. Nothing contained
in this Certificate will be construed as conferring upon the Holder or its
permitted transferees the right to vote or to receive dividends (except as
provided in Section 6 hereof) or to consent or to receive notice as stockholders
in respect of any meeting of stockholders of the Company for the election of the
directors of the Company or any other matter, or any rights whatsoever as
stockholders of the Company. However, at any time prior to the expiration of the
Warrants and prior to their exercise, the Company will give reasonable prior
notice to the Holder of any date on which an adjustment pursuant to Section 6 is
scheduled to occur.
SECTION 9. Identity of Transfer Agent. Upon the appointment of any Transfer
Agent for the Preferred Stock, or any other shares of the Company's capital
stock issuable upon the exercise of the Warrants, the Company promptly will
notify the Holder of the name and address of such Transfer Agent.
SECTION 10. Notices. Any notice, except as provided in Section 8 of this
Certificate, or demand authorized by this Certificate to be given by the Holder
to the Company, will be in writing and will be delivered in person or by
facsimile transmission, or mailed by first class mail, postage prepaid, or by
overnight courier, to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇; confirmation no. (▇▇▇) ▇▇▇-▇▇▇▇;
Attention: Corporate Secretary. The Company may change the address or facsimile
numbers to which notices to it are to be transmitted, delivered or mailed
hereunder by notice to the Holder.
Any notice pursuant to this Certificate by the Company to the Holder
will be in writing and will be delivered by first class mail, postage prepaid,
or by facsimile transmission, by overnight courier, or otherwise delivered by
hand, to the Holder at its address on the books of the Warrants Register or at
the facsimile number specified in writing by the Holder to the Company.
Notices delivered personally will be effective at the time delivered by
hand, notices sent by mail will be effective two days after mailing, notices
sent by facsimile transmission will be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery will be effective on
the next business day after timely delivery to the courier.
SECTION 11. Supplements and Amendments. This Certificate may not be
supplemented, amended or otherwise modified without the prior written consent of
the Holder.
SECTION 12. Successors. All the covenants and provisions of this
Certificate by or for the benefit of the Company will bind and inure to the
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benefit of its respective successors and assigns.
SECTION 13. Merger or Consolidation of the Company. The Company will not
merge or consolidate into, or sell, transfer or lease all or substantially all
of its property to, any other corporation unless the successor, transferee or
lessee corporation, as the case may be (if not the Company), expressly assumes
the due and punctual performance and observance of each and every covenant and
condition of this Certificate to be performed and observed by the Company.
SECTION 14. APPLICABLE LAW. THIS CERTIFICATE AND THE WARRANTS EVIDENCED
HEREBY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
SECTION 15. Benefits of this Certificate. Nothing in this Certificate,
express or implied, will be construed to give to any person or entity other than
the Company and the Holder any legal or equitable right, remedy or claim under
this Certificate; and this Certificate will be for the sole and exclusive
benefit of the Company and the Holder.
SECTION 16. Captions. The captions of the Sections and paragraphs of this
Certificate have been inserted for convenience only and will have no substantive
effect.
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IN WITNESS WHEREOF, the Company has caused this Certificate to be duly
executed this [_______] day of [_______________], 2000.
DIME BANCORP, INC.
By:
Name:
Title:
Accepted:
[HOLDER]
By:______________________________
Name:
Title:
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ELECTION FORM
(To be executed if Holder desires to exercise Warrant)
The undersigned hereby irrevocably elects to exercise the Warrant,
represented by this Certificate, to purchase ___ shares of Series B junior
voting preferred stock ("Preferred Stock") as provided for herein and upon
confirmation from the Company that such shares of Preferred Stock will be
issued, agrees that it will tender in payment for such shares of Preferred Stock
payment of the purchase price in full in the form of a wire transfer of
immediately available funds to the order of Dime Bancorp, Inc. in the amount of
$_____________, all in accordance with the terms hereof. The undersigned
requests that a certificate for such shares of Preferred Stock be registered in
the name of ______________________ whose address is __________________________
and that such certificate will be delivered to ____________________________
whose address is ____________________________. If said number of shares of
Preferred Stock is less than all of the shares of Preferred Stock purchasable
hereunder, the undersigned requests that a new Certificate representing the
right to purchase the remaining balance of the shares of Preferred Stock be
registered in the name of ______________________ whose address is ____________
_____________________ and that such certificate will be delivered to
________________ whose address is _________________________________.
Dated:________________
________________
(Insert Employer Identification
Number of Holder)
Signature _________________________
Note: Signature must conform in all
respects to name of holder as
specified on the face of this
Certificate in every particular,
without alteration or
enlargement or any change
whatsoever, unless this
Certificate has been assigned.
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ASSIGNMENT
(To be executed only upon
assignment of the Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ (Name and Address of Assignee, Must Be Printed or
Typewritten) the within Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________, Attorney, to transfer said Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated: ______________________
______________________________
Signature of Registered Holder
Note: The above signature must
correspond with the name
as written on the face of
this Certificate in every
particular, without
alteration or enlargement
or any change
whatsoever.
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EXHIBIT 7
FORM OF SERIES C WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS INSTRUMENT AND THE SECURITIES ISSUABLE
UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS
ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN INVESTMENT AGREEMENT, DATED AS OF JULY 6, 2000 (THE "INVESTMENT
AGREEMENT"), BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN (THE "FIRST INVESTOR"), A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
EXERCISABLE AT ANY TIME UNTIL 5:00 P.M.,
NEW YORK CITY TIME, ON [___________],* UNLESS
EXTENDED AS PROVIDED BELOW.
DIME BANCORP, INC.
WARRANT
No. [___]
CERTIFICATE FOR [_________] WARRANTS TO
PURCHASE SHARES OF
SERIES C JUNIOR NONVOTING PREFERRED STOCK
OF DIME BANCORP, INC.
This Instrument (this "Certificate") certifies that, for value
received, [____________________________________], or its registered assigns (the
"Holder"), is the owner of [_________] Warrants (as defined below), each of
which entitles the Holder to purchase at any time until 5:00 p.m., New York City
time, on [____________],* at the exercise price per share set forth herein (the
"Exercise
--------
* SEVEN YEARS AFTER ISSUE.
114
Price"), one share of Series C junior nonvoting preferred stock, par value $0.01
per share (the "Preferred Stock"), of Dime Bancorp, Inc., a Delaware corporation
(the "Company"). The number and type of shares purchasable upon exercise of each
Warrant and the Exercise Price will be subject to adjustment from time to time
as herein provided. In this Certificate, the right to purchase each share of
Preferred Stock is referred to as a "Warrant"; the shares of Preferred Stock or,
pursuant to the terms hereof, other securities, issuable upon exercise of the
Warrants are referred to as the "Warrant Shares". Anything to the contrary
notwithstanding, Warrants will not entitle the Holder to purchase or otherwise
acquire any interest in any shares of Common Stock, par value $0.01 per share
("Common Stock"), of the Company, and the term "Warrant Shares" does not include
Common Stock. Certain rights of holders of shares of Preferred Stock are
determined by means of a "Reference Package" as defined in the certificate of
incorporation of the Company with respect to the Preferred Stock.
Each Warrant possesses the following terms, conditions and provisions,
to which the Holder agrees by acceptance hereof:
SECTION 1. Registration; Transferability; Exchange of Certificate.
1.1 Registration. The Company will number and register each Warrant in
a register (the "Warrants Register") maintained at the office of the Company
(the "Office") as they are issued by the Company. The Company will be entitled
to treat the registered Holder of any Warrant, as set forth in the Warrants
Register, as its owner for all purposes and will not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person. The Warrants are transferable only on the Warrants Register maintained
at the Office upon delivery of the certificate or certificates evidencing such
Warrants, duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, will be
deposited and remain with the Company.
1.2 Exchange of Certificates. Subject to the provisions herein, each
Certificate may be exchanged for another Certificate(s) entitling the Holder to
purchase a like aggregate number of Warrant Shares as this Certificate then
entitles such Holder to purchase. If the Holder desires to exchange this
Certificate, it must deliver such request in writing to the Company and
surrender, properly endorsed if required by the Company, this Certificate.
Thereupon, the Company will sign and deliver to the entitled person the
requested new Certificate.
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1.3 Exchange for Series B or Common Warrants. If the Holder surrenders
this Certificate to the Company and together therewith delivers to the Company
either (a) a certificate stating that the Holder has received the advice of
counsel to the effect that it is permissible under the federal banking laws and
regulations applicable to the Company that the Warrants convert as contemplated
by this Section 1.3 or (b) a certificate stating that the Holder is transferring
Warrants in a Widely Dispersed Offering (as defined in the certificate of
incorporation relating to the Preferred Stock) and subsequently transfers the
shares in a Widely Dispersed Offering, each Warrant will be converted into, and
exchanged for, either (a) warrants ("Series B Warrants") to purchase shares of
Series B junior voting preferred stock, par value $0.01 per share, of the
Company (the "Series B Stock") or (b) warrants to purchase Common Stock (a
"Common Warrant"), as follows:
(1) If at the time of such exchange the Series B Stock has not
converted into Common Stock in accordance with the terms of the certificate
of incorporation of the Company relating to the Series B Stock, each
Warrant will be exchanged for one Series B Warrant, which will be issued in
the form of Exhibit 6 to the Investment Agreement, registered in the name
of the Holder, and will have terms identical to the terms of the Warrant
then in effect (other than that Series B Stock will be substituted for the
Preferred Stock and as otherwise expressly contemplated by the form);
(2) Otherwise, each Warrant will be exchanged for a number of Common
Warrants to purchase Common Stock equal to (a) the number of shares of
Preferred Stock then purchasable on exercise of each Warrant multiplied by
(b) the number of shares of Common Stock then constituting the Reference
Package. The Common Warrants will be issued in the form of Exhibit 5 to the
Investment Agreement, registered in the name of the Holder, and will have
(a) an expiration date that is the same as the Expiration Date then in
effect for the Warrants and (b) an exercise price per share of Common Stock
that is equal to (1) the Exercise Price then in effect for the Warrants
divided by (2) the number of shares of Common Stock then constituting the
Reference Package. Notwithstanding the foregoing, if a Warrant Share shall
include any securities or property other than one share of Preferred Stock
at the time of such conversion, an appropriate adjustment will be made to
the Common Warrants (consistent with the terms thereof).
On such surrender and delivery, the Holder will be entitled to receive a
certificate for the Series B Warrants or the Common Warrants issuable on such
conversion (as the case may be). It is understood that, if the Holder desires to
convert less than all of the Warrants, the Holder is entitled to exchange this
Certificate for two or more other Certificates pursuant to Section 1.2 and
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surrender only the Certificate(s) representing the Warrants to be converted.
SECTION 2. Term of Warrants; Exercise of Warrants.
2.1 Term of Warrants. Subject to the terms of this Certificate, the
Holder has the right, exercisable until 5:00 p.m., New York City time, on
[____________]* (the "Expiration Date") to purchase from the Company (and the
Company will issue and sell to the Holder of the Warrants represented hereby)
such number of Warrant Shares that the Holder may at the time be entitled to
purchase, or any lesser number of Warrant Shares requested by the Holder. Each
Warrant not exercised prior to 5:00 p.m., New York City time, on the Expiration
Date will become void.
2.2 Exercise of Warrants. (a) The Warrants may be exercised in whole or
in part at any time upon surrender to the Company, at its Office, of this
Certificate, together with the Election Form attached hereto duly completed and
signed. Such surrender may be by facsimile transmission; provided, however, that
the Company will not be obligated to issue any Warrant Shares in respect of this
Certificate and such Election Form until it has received the original versions
of this Certificate and such Election Form. The earlier of the receipt of such
facsimile transmission or the receipt of such original certificate and form is
referred to herein as the "Exercise Date". Promptly following the Exercise Date,
the Holder will deliver, if it has not already done so, (1) original versions of
this Certificate and the Election Form and (2) a bank or certified check or wire
transfer of immediately available United States funds payable to the Company in
an amount equal to the product of the Exercise Price multiplied by the number of
Warrant Shares being purchased upon such exercise (the "Aggregate Exercise
Price"). "Business Day" means any day other than a Saturday, Sunday, or a day in
which banking institutions in the City of New York, New York are authorized or
obligated by law or executive order to close.
(b) Upon the surrender of this Certificate, with the Election Form duly
executed, and payment of the Exercise Price as aforesaid, the Company will
promptly cause to be issued and delivered with all reasonable dispatch to or
upon the written order of the Holder and in such name or names as the Holder may
designate a certificate(s) for the number of Warrant Shares so purchased,
together, at the option of the Company as provided in Section 7 hereof, with
cash in respect of any fractional Warrant Shares otherwise issuable upon such
surrender. Payment of the aggregate Exercise Price will be made by wire transfer
of immediately available funds. Any such Warrant Shares so purchased will be
deemed issued as of the Exercise Date.
--------
* SEVEN YEARS AFTER ISSUE.
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(c) If the Holder of this Certificate exercises fewer than all the
Warrants at any time prior to the Expiration Date, a new Certificate evidencing
the remaining unexercised Warrants will be issued to the Holder.
2.3 Compliance with Government Regulations. The Company covenants that
if any Warrant Shares required to be reserved for purposes of the exercise of
Warrants require, under any Federal or state law or applicable governing rule or
regulation of any national securities exchange, registration with or approval of
any governmental authority, or listing on any such national securities exchange,
before such Warrant Shares may be issued upon exercise, the Company will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved by such governmental authority or listed on the relevant
national securities exchange, as the case may be; provided, however, that in no
event will Warrant Shares be issued, and the Company is hereby authorized to
suspend the exercise of all Warrants, for the period during which such
registration, approval or listing is required but not in effect (the "Suspension
Period"); and provided, further, that, if a Suspension Period is in effect, the
term of the Warrants will be extended for the equivalent number of days of such
Suspension Period (the "Extension Period") with such Extension Period beginning
on the later of (a) the Expiration Date or (b) the date of the end of any
previously established Suspension Period. The Company will give prompt notice of
any such suspension and will promptly return this Certificate and payment of the
Exercise Price thereof to the Holder if such Holder tendered this Certificate
and Exercise Price precipitating or during such Suspension Period and will
promptly give notice of the lifting of any such suspension and the commencement
of any such Extension Period.
2.4 OTS Approval. Anything herein to the contrary notwithstanding, the
First Investor hereby acknowledges and agrees that its exercise of Warrants is
subject to the condition that it will have first received any and all necessary
approvals, authorizations and consents of the Office of Thrift Supervision or
any other relevant Governmental Entity (as defined in the Investment Agreement
necessary to permit such exercise.
2.5 Exercise Price. The Exercise Price per share at which each Warrant
Share will be purchased upon exercise of each Warrant is the product of (a)
$21.50 and (b) the number of shares of Common Stock initially comprising the
Reference Package. The Exercise Price is subject to adjustment as set forth
herein, but will not be less than $0.01.
SECTION 3. Payment of Taxes. The Company will pay documentary, stamp or
similar issue or transfer taxes, if any, that may be payable in respect of the
issuance or delivery of any Warrant or of the Warrant Shares issuable upon the
exercise of such Warrants; provided, however, that the Company is
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not required to pay any tax in respect of any registration or transfer involved
in the issuance or delivery of any Warrant or the issuance or delivery of
certificates for Warrant Shares in a name other than the Holder.
SECTION 4. Mutilated or Missing Certificates. If this Certificate is
mutilated, lost, stolen or destroyed, the Company will issue and deliver in
substitution for and upon cancellation of the mutilated Certificate, or in
substitution for the Certificate lost, stolen or destroyed, a new Certificate of
like tenor and representing an equivalent right or interest, but only upon, in
the case of a lost, stolen or destroyed certificate, receipt of evidence
satisfactory to the Company of such loss, theft or destruction.
SECTION 5. Reservation and Availability of Warrant Shares; Purchase and
Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The Company will reserve and
keep available free from preemptive rights, out of its authorized but unissued
shares of Preferred Stock, the full number of Warrant Shares deliverable upon
the exercise of all outstanding Warrants evidenced by this Certificate. The
Company or, if appointed, a transfer agent (a "Transfer Agent") will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares of Preferred Stock as are required for such purpose. The
Company will keep a copy of this Certificate on file with each Transfer Agent.
The Company will furnish such Transfer Agent with a copy of all notices of
adjustments and certificates related thereto which are transmitted to the Holder
pursuant to Section 6 hereof.
(b) The Company agrees that all Warrant Shares issuable upon exercise
of Warrants will, upon issuance, be duly authorized and validly issued, and
fully paid and nonassessable shares of Preferred Stock, with no personal
liability attaching to the ownership thereof, free from preemptive rights and
free from all taxes with respect to the issuance thereof, and all liens,
charges, and security interests.
5.2 Warrant Shares Record Date. Each person in whose name any stock
certificate for Warrant Shares is issued will for all purposes be deemed to have
become the holder of record of the Warrant Shares represented thereby on, and
such stock certificate will be dated as of, the Exercise Date relating to such
Warrant Shares (unless exercise is then suspended in accordance with Section
2.3).
5.3 Purchase of Warrants by the Company. The Company has the right,
except as limited by law, other agreements or herein, to purchase or otherwise
acquire in negotiated transactions Warrants evidenced hereby at such times, in
such manner and for such consideration as it may deem appropriate.
5.4 Cancellation of Warrants. Any Certificate surrendered for
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exchange, substitution, transfer or exercise in whole or in part will be
cancelled by the Company and retired.
SECTION 6. Adjustment of Exercise Price. The Exercise Price and the number
of Warrant Shares issuable on Exercise of each Warrant are subject to adjustment
from time to time as described in this Section 6. All calculations under this
Section 6 will be made to the nearest one-hundredth of a cent or to the nearest
one-hundredth of a share, as the case may be.
6.1 Anti-dilution Adjustments. Subject to Section 6.4, the following
adjustments will be made, to the extent (but only to the extent) that an
appropriate adjustment has not been made to the Reference Package:
(a) Common Stock Issued at Less than Market Value. If the Company
issues or sells any Common Stock other than Excluded Stock without consideration
or for consideration per share less than the Market Price of the Common Stock
(provided, however, that no sale of securities pursuant to a bona fide
underwritten public offering will be deemed to be for less than Market Price),
as of the day of such issuance or sale, the Exercise Price in effect immediately
prior to each such issuance or sale will immediately (except as provided below)
be reduced to the price determined by multiplying the Exercise Price, in effect
immediately prior to such issuance or sale, by a fraction, (x) the numerator of
which shall be (A) the number of shares of Common Stock outstanding immediately
prior to such issuance or sale plus (B) the number of shares of Common Stock
which the aggregate consideration received by the Company for the total number
of such additional shares of Common Stock so issued or sold would purchase at
the Market Price on the last trading day immediately preceding such issuance or
sale and (y) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale. In such event, the
number of Warrant Shares issuable upon the exercise of each Warrant shall be
increased to the number obtained by dividing (x) the product of (A) the number
of Warrant Shares issuable upon the exercise of each Warrant before such
adjustment, and (B) the Exercise Price in effect immediately prior to the
issuance giving rise to this adjustment by (y) the new Exercise Price determined
in accordance with the immediately preceding sentence. For the purposes of any
adjustment of the Exercise Price and the number of Warrant Shares issuable upon
exercise of each Warrant pursuant to this Section 6.1(a), the following
provisions shall be applicable:
(1) In the case of the issuance of Common Stock for cash, the amount of
the consideration received by the Company shall be deemed to be the
amount of the cash proceeds received by the Company for such Common
Stock before deducting therefrom any discounts or commissions allowed,
paid or incurred by the Company for any underwriting or otherwise in
connection with
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the issuance and sale thereof.
(2) In the case of the issuance of Common Stock (otherwise than upon the
conversion of any shares of capital stock or other securities of the
Company) for a consideration in whole or in part other than cash,
including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other
than cash shall be deemed to be the fair value thereof as determined
by the Board of Directors; provided, however, that such fair value as
determined by the Board of Directors shall not exceed the aggregate
Market Price of the shares of Common Stock being issued as of the date
the Board of Directors authorizes the issuance of such shares.
(3) In the case of the issuance of (A) options, warrants or other rights
to purchase or acquire Common Stock (whether or not at the time
exercisable) or (B) securities by their terms convertible into or
exchangeable for Common Stock (whether or not at the time so
convertible or exchangeable) or options, warrants or rights to
purchase such convertible or exchangeable securities (whether or not
at the time exercisable):
(i) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other
rights to purchase or acquire Common Stock shall be deemed to
have been issued at the time such options, warrants or rights are
issued and for a consideration equal to the consideration
(determined in the manner provided in Sections 6.1(a)(1) and
(2)), if any, received by the Company upon the issuance of such
options, warrants or rights plus the minimum purchase price
provided in such options, warrants or rights for the Common Stock
covered thereby;
(ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or acquire such
convertible or exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options,
warrants or rights were issued and for a consideration equal to
the consideration, if any, received by the Company for any such
securities and related options, warrants or rights (excluding any
cash received on account of accrued interest or accrued
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dividends), plus the additional consideration (determined in the
manner provided in Section 6.1(a)(1) and (2)), if any, to be
received by the Company upon the conversion or exchange of such
securities, or upon the exercise of any related options, warrants
or rights to purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof;
(iii) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights
or conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by
the company upon such exercise, conversion or exchange, but
excluding changes resulting from the antidilution provisions
thereof (to the extent comparable to the antidilution provisions
contained herein), the Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant as then in effect
shall forthwith be readjusted to such Exercise Price and number
of Warrant Shares as would have been obtained had an adjustment
been made upon the issuance of such options, warrants or rights
not exercised prior to such change, or of such convertible or
exchangeable securities not converted or exchanged prior to such
change, upon the basis of such change;
(iv) on the expiration or cancellation of any such options, warrants
or rights (without exercise), or the termination of the right to
convert or exchange such convertible or exchangeable securities
(without exercise), if the Exercise Price and the number of
Warrant Shares issuable upon exercise of this Warrant shall have
been adjusted upon the issuance thereof, the Exercise Price and
the number of Warrant Shares issuable upon exercise of this
Warrant shall forthwith be readjusted to such Exercise Price and
number of Warrant Shares as would have been obtained had an
adjustment been made upon the issuance of such options, warrants,
rights or such convertible or exchangeable securities on the
basis of the issuance of only the number of shares of Common
Stock actually issued upon the exercise of such options, warrants
or rights, or upon the conversion or exchange of such convertible
or exchangeable securities; and
(v) if the Exercise Price and the number of Warrant Shares issuable
upon exercise of this Warrant shall have been adjusted upon the
issuance of any such options, warrants,
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rights or convertible or exchangeable securities, no further
adjustment of the Exercise Price and the number of Warrant Shares
issuable upon exercise of this Warrant shall be made for the
actual issuance of Common Stock upon the exercise, conversion or
exchange thereof; provided, however, that no increase in the
Exercise Price shall be made pursuant to subclauses (i) and (ii)
of this Section 6.1(a)(3).
(4) Notwithstanding anything to the contrary in this Section 6.1(a), no
adjustment will be required in respect of issuances of Common Stock
(or options to purchase Common Stock) pursuant to stock options
granted prior to the date hereof. Additionally, notwithstanding
anything to the contrary in this Section 6.1(a), adjustments will be
made for stock options and restricted stock granted to employees after
the date hereof pursuant to the terms of Section 6.1(b) rather than
Section 6.1(a).
(b) Employee Stock Options and Restricted Stock Grants. If the Company
issues or sells any Common Stock or its equivalent to employees at a price of
less than $17.50 per share, or grants any options to employees where the minimum
exercise price of such options is less than $17.50 per share of Common Stock,
then the number of Warrant Shares and the Exercise Price will be adjusted in
accordance with the provisions of Section 6.1(a) but treating the Market Price
as $17.50.
Notwithstanding anything to the contrary set forth in this Section
6.1(b), no adjustment will be required in respect of issuance of employee stock
options or the sale of restricted stock to employees after adjustments have been
made pursuant to this Section 6.1(b) for the issuance of 5 million shares and
options at prices of less than $17.50 per share.
(c) Certain Repurchases of Common Stock. In case the Company effects a
Pro Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to
the price determined by multiplying the Exercise Price in effect immediately
prior to the effective date of such Pro Rata Repurchase by a fraction of which
the numerator shall be (x) the product of (A) the number of shares of Common
Stock outstanding immediately before such Pro Rata Repurchase and (B) the Market
Price of a share of Common Stock on the trading day immediately preceding the
first public announcement by the Company or any of its Affiliates of the intent
to effect such Pro Rata Repurchase, minus (y) the aggregate purchase price of
the Pro Rata Repurchase, and of which the denominator shall be the product of
(x) the number of shares of Common Stock outstanding immediately prior to such
Pro Rata Repurchase minus the number of shares of Common Stock so
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repurchased and (y) the Market Price per share of Common Stock on the trading
day immediately preceding the first public announcement of such Pro Rata
Repurchase. In such event, the number of Warrant Shares issuable upon the
exercise of each Warrant shall be increased to the number obtained by dividing
(x) the product of (A) the number of Warrant Shares issuable upon the exercise
of each Warrant before such adjustment, and (B) the Exercise Price in effect
immediately prior to the Pro Rata Repurchase giving rise to this adjustment by
(y) the new Exercise Price determined in accordance with the immediately
preceding sentence.
(d) Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 6.1(e)), any Warrant Shares issued or issuable upon
exercise of this Warrant after the date of such Business Combination or
reclassification will be exchangeable for the number of shares of stock or other
securities or property (including cash) to which the Warrant Shares issuable (at
the time of such consolidation, merger, sale, lease or conveyance) upon exercise
of this Warrant immediately prior to such Business Combination or
reclassification would have been entitled upon such Business Combination or
reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Holder shall
be appropriately adjusted so as to be applicable, as nearly as may reasonably
be, to any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant. In determining the kind and amount
of stock, securities or the property receivable upon consummation of such
Business Combination, if the holders of Common Stock have the right to elect the
kind or amount of consideration receivable upon consummation of such Business
Combination, then the Holder shall have the right to make a similar election
upon exercise of this Warrant with respect to the number of shares of stock or
other securities or property which the Holder will receive upon exercise of this
Warrant.
(e) Stock Splits, Subdivisions, Reclassifications or Combinations. If
the Company shall (1) declare a dividend or make a distribution on its Common
Stock in shares of Common Stock, (2) subdivide or reclassify the outstanding
shares of Common Stock into a greater number of shares, or (3) combine or
reclassify the outstanding Common Stock into a smaller number of shares, the
number of Warrant Shares issuable upon exercise of this Warrant at the time of
the record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the Holder after such date shall be entitled to purchase the number of
Warrant Shares which such holder would have owned or been entitled to receive
after such date had this Warrant been exercised immediately prior to such date.
Successive adjustments in the Exercise Price shall be made whenever any event
specified above shall occur. In such event the Exercise Price in effect at the
time of the record date for such dividend or distribution or the effective date
of such
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subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (A) the number of Warrant Shares
issuable upon the exercise of this Warrant before such adjustment and (B) the
Exercise Price in effect immediately prior to the issuance giving rise to this
adjustment by (y) the new number of shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.
(f) Other Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of shares of its Common Stock
(1) of shares of any class other than its Common Stock or (2) of evidence of
indebtedness of the Company or any Subsidiary or (3) of assets, or (4) of rights
or warrants (in each case excluding (A) Ordinary Cash Dividends, (B) any
dividends or distribution referred to in Section 6.1(e) and (C) any LTWs as
defined in the Investment Agreement), in each such case the Exercise Price in
effect on the record date will be reduced by an amount equal, in the case of a
distribution in cash, to the amount thereof payable per share of the Common
Stock, or in the case of any other distribution, to the fair value thereof per
share of the Common Stock as determined by the Board of Directors (in each case
multiplied by the number of shares of Common Stock then comprising the Reference
Package). Such reductions shall take effect on the record date for such
distribution. In such event, the number of Warrant Shares issuable upon the
exercise of each Warrant shall be increased to the number obtained by dividing
(x) the product of (A) the number of Warrant Shares issuable upon the exercise
of this Warrant before such adjustment, and (B) the Exercise Price in effect
immediately prior to the issuance giving rise to this adjustment by (y) the new
Exercise Price determined in accordance with the immediately preceding sentence.
In the event that such distribution is not so made, the Exercise Price and the
number of Warrant Shares issuable upon exercise of this Warrant then in effect
shall be readjusted, effective as of the date when the Board determines not to
distribute such shares, evidences of indebtedness, assets, rights or warrants,
as the case may be, to the Exercise Price that would then be in effect and the
number of Warrant Shares that would then be issuable upon exercise of this
Warrant if such record date and distribution had not been fixed.
(g) Adjustments for Special Payments. In the event that the Company
makes any Special Payments, for so long as this Warrant is held by the First
Investor the Exercise Price in effect immediately prior to such Special Payments
will be reduced by an amount equal to the product of the number of shares of
Common Stock then comprising the Reference Package and the quotient of (x) the
amount of such Special Payments multiplied by 24.9%, divided by (y) the
aggregate number of shares of Common Stock underlying (or comprising the
reference package of any capital stock underlying) all warrants to purchase
capital stock of the Company theretofore issued to Holder under the Investment
Agreement (including the Warrants). In such event, the number of Warrant Shares
issuable upon exercise of each Warrant shall be
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increased to the number obtained by dividing (x) the product of (A) the number
of Warrant Shares issuable upon exercise of each Warrant before such adjustment,
and (B) the Exercise Price in effect immediately prior to the issuance giving
rise to this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence.
(h) No adjustment in the Exercise Price or the number of Warrant Shares
issuable upon the exercise of each Warrant is required if the amount of the
adjustment is less than $0.01 or one-hundredth (1/100th) of a share, as the case
may be; provided, however, that any adjustments which by reason of this Section
6.1(h) are not required to be made will be carried forward and given effect in
any subsequent adjustment.
(i) For the purposes of this Section 6.1, the term "shares of Common
Stock" means (1) the class of stock designated as the Common Stock of the
Company at the date hereof or (2) any other class of stock resulting from
successive changes or reclassifications of such shares consisting solely of
changes in par value, or from no par value to par value.
(j) Notwithstanding the foregoing, in any case which this Section 6.1
provides that an adjustment becomes effective immediately after a record date
for an event, the Company may defer until the occurrence of such event (1)
issuing to the Holder of any Warrant exercised after such record date and before
the occurrence of such event the additional securities issuable upon such
conversion before giving effect to such adjustment and (2) paying to the Holder
any amount in cash in lieu of any fraction pursuant to Section 7.
(k) If the Company takes any action affecting the Common Stock, other
than action described in this Section 6.1, which in the opinion of the Board of
Directors of the Company would materially adversely affect the conversion rights
of the Holder of the Warrants, the Exercise Price for the Warrants and/or the
number of Warrant Shares received upon exercise of the Warrant may be adjusted,
to the extent permitted by law, in such manner, if any, and at such time, as
such Board may determine in good faith to be equitable in the circumstances.
Failure of the Board of Directors of the Company to provide for any such
adjustment prior to the effective date of any such action by the Company
affecting the Common Stock will be evidence that the Board of Directors of the
Company has determined that it is equitable to make no adjustments in the
circumstances.
(l) Notwithstanding any of the foregoing, no adjustment will be made to
the Exercise Price or to the number of shares purchasable upon exercise of the
Warrants with respect to any issuance or offering by the Company, by dividend on
Common Stock or otherwise, of any LTWs (as defined in the Investment Agreement);
provided, however, that for so long as this Warrant is held by the First
Investor, the average total trading price of all such issued instruments on a
national securities exchange for the 20 trading days
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beginning ten days after issuance of the LTWs, or, if the LTWs are not traded on
a national securities exchange, the total fair market value of all LTWs issued
as determined by the Board of Directors (subject to appraisal by a mutually-
agreeable firm if the Holder disputes such valuation), is greater than $100
million, then the Exercise Price will be reduced by an amount (to be multiplied
by the number of shares of Common Stock then comprising the Reference Package)
equal to (1) the difference between the average total trading price and $100
million multiplied by (2) 0.2214, or if the Second Closing under the Investment
Agreement does not occur for any reason, 0.1980, and then divided by (3) the
Total Number where the "Total Number" has the meaning provided for in the
Investment Agreement adjusted such that if, at any time after the date of the
Investment Agreement, the Company (A) declares or pays a dividend on any Common
Stock payable in Common Stock, (B) subdivides any Common Stock or (C) combines
any Common Stock into a smaller number of shares, then, in each case, the Total
Number after such event shall be the number of shares of Common Stock that a
holder of the Total Number immediately prior to such event would hold thereafter
as a result of such event.
6.2 Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Exercise
Price or increase the number of Warrant Shares for which the Warrant may be
exercised to any amount deemed appropriate by the Board of Directors of the
Company; provided, however, that if the Company elects to make such adjustment,
such adjustment will remain in effect for at least a 15- day period, after which
time the Company may, at its option, reinstate the Exercise Price or number of
Warrant Shares in effect prior to such reduction, subject to any interim
adjustments pursuant to Section 6.1.
6.3 Notice of Adjustment. Whenever the Exercise Price or number of
Warrant Shares is adjusted, the Chief Financial Officer of the Company will
compute the adjustments in accordance with the foregoing provisions and will
prepare a certificate setting forth the adjustments and showing in reasonable
detail the facts upon which such adjustments are based. A copy of such
certificate will be filed promptly with the Transfer Agent. Promptly after
delivery of such certificate, the Company will prepare a notice setting forth
the adjustments and the date on which such adjustments become effective and will
mail such notice of such adjustments to the Holder at the last address of the
Holder as shown on the Warrants Register.
6.4 Miscellaneous. Except as provided in Section 6.1, no adjustment in
respect of any dividends or other payments or distributions made to Holders of
securities issuable upon exercise of Warrants will be made during the term of a
Warrant or upon the exercise of a Warrant. No adjustment will be made to the
Warrant (including the Warrant Share number or the Exercise Price) with respect
to any event that results in an adjustment to the Reference Package. To the
extent (but only to the extent) that (at Holder's election and reasonable
allocation) the Holder's rights hereunder have been protected by the Holder's
exercise of its preemptive rights under the Investment Agreement, no adjustments
will be made to the Exercise Price or the number of Warrant Shares. In addition,
notwithstanding any of the foregoing, no such adjustment will be made for the
issuance or conversion of (a) any Securities (as defined in the Investment
Agreement) or (b) any rights under the Rights Agreement (as defined in the
Investment Agreement) or any successor agreement unless such rights become
exercisable (in which case they will be
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deemed for purposes of this Agreement to have been issued at the time they
become exercisable).
6.5 Statement on Certificate. Irrespective of any adjustments in the
number or kind of securities purchasable upon the exercise of the Warrants or
the Exercise Price, the Certificates may continue to express the same price and
number and kind of shares as are stated in this Certificate.
6.6 Definitions. For purposes of Section 6.1, the following terms shall
have the following meanings:
"Business Combination" means (1) any consolidation, merger, share
exchange or similar business combination transaction involving the
Company with any person or (2) the sale, assignment, conveyance,
transfer, lease or other disposition by the Company of all or
substantially all of its assets.
"Excluded Stock" means shares of Common Stock issued by the Company as
a stock dividend payable in shares of Common Stock, or upon any
subdivision or split-up of the outstanding shares of capital stock in
each case which is subject to Section 6.1(e), or upon conversion of
shares of capital stock (but not the issuance of such capital stock
which will be subject to the provisions of Section 6.1(a)(3)).
"Market Price" means, with respect to a particular security, on any
given day, the average of the daily closing prices for 10 consecutive
trading days commencing on the 5th trading day prior to the day in
question or, in case no such reported sale takes place on such day,
the average of the last closing bid and asked prices regular way, in
either case on the principal national securities exchange on which the
applicable security is listed or admitted to trading, or if not listed
or admitted to trading on any national securities exchange, (1) the
average of the daily closing prices for 10 consecutive trading days
commencing on the 5th trading day prior to the day in question
reported by the NASDAQ Stock Market if such security is traded
over-the-counter and quoted in the NASDAQ Stock Market, or (2) if such
security is so traded, but not so quoted, the average of the closing
reported bid and asked prices of such security as reported by the
NASDAQ Stock Market or any comparable system, or (3) if such security
is not listed on the NASDAQ Stock Market or any comparable system, the
average of the closing bid and asked prices as furnished by two
members of the National Association of Securities Dealers, Inc.
selected from time to time by the
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Company for that purpose. If such security is not listed and traded in
a manner that the quotations referred to above are available for the
period required hereunder, the Market Price per share of Common Stock
shall be deemed to be the fair value per share of such security as
determined in good faith by the Board of Directors of the Company.
"Ordinary Cash Dividends" means regular quarterly cash dividends
generally consistent with past practices, including periodic
increases.
"Pro Rata Repurchases" means any purchase of shares of Common Stock by
the Company or any Affiliate (as defined in the Investment Agreement)
thereof pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or pursuant to any other offer
available to substantially all holders of Common Stock, whether for
cash, shares of capital stock of the Company, other securities of the
Company, evidences of indebtedness of the Company or any other person
or any other property (including, without limitation, shares of
capital stock, other securities or evidences of indebtedness of a
subsidiary of the Company), or any combination thereof, effected while
this Warrant is outstanding; provided, however, that "Pro Rata
Repurchase" shall not include any purchase of shares by the Company or
any Affiliate thereof made directly or indirectly in accordance with
the requirements of Rule 10b-18 as in effect under the Exchange Act or
any tender offer commenced in connection with the transactions in
which this Warrant is issued. The "effective date" of a Pro Rata
Repurchase shall mean the date of acceptance of shares for purchase or
exchange under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata
Repurchase that is not a tender or exchange offer.
"Special Payments" are any payment or series of payments pursuant to a
final, nonappealable judgment or a final settlement or agreement
exceeding in the aggregate $15 million to ▇▇▇▇▇▇ United Bancorp
(including any successor, "▇▇▇▇▇▇") pursuant to the Termination,
Option Cancellation and Settlement Agreement, dated as of April 28,
2000, between ▇▇▇▇▇▇ and the Company (as amended or modified, the
"▇▇▇▇▇▇ Agreement"), except to the extent that such payment or
payments result or arise from (i) a misrepresentation by the First
Investor in Section 2.3(f) or a breach by the First Investor of
Section 4.1(a) of the Investment Agreement, or (2) any actual or
potential "Acquisition Transaction", "Subsequent Transaction" or
"Subsidiary Transaction" (as such terms are defined in the ▇▇▇▇▇▇
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Agreement) approved, recommended or authorized by the Board of
Directors of the Company after the date of the Investment Agreement.
SECTION 7. Fractional Interests. The Company may, but will not be required
to, issue fractional Warrant Shares on the exercise of Warrants. If more than
one Warrant is presented for exercise in full at the same time by a Holder, the
exercise thereof will be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would be issuable on the exercise of any Warrant (or
specified portion thereof), the Company may, in its sole discretion, issue such
fraction of a Warrant Share or pay to the Holder of the Warrant an amount in
cash equal to the product of (a) the Current Market Price per share of Common
Stock computed as of the trading day immediately preceding the date the Warrant
is presented for exercise and (b) the Reference Package as of such date,
multiplied by such fraction of a Warrant Share (but in no event less than an
amount equal to such fraction multiplied by the Exercise Price in effect at such
time).
SECTION 8. No Rights as Stockholders; Notices to Holder. Nothing contained
in this Certificate will be construed as conferring upon the Holder or its
permitted transferees the right to vote or to receive dividends (except as
provided in Section 6 hereof) or to consent or to receive notice as stockholders
in respect of any meeting of stockholders of the Company for the election of the
directors of the Company or any other matter, or any rights whatsoever as
stockholders of the Company. However, at any time prior to the expiration of the
Warrants and prior to their exercise, the Company will give reasonable prior
notice to the Holder of any date on which an adjustment pursuant to Section 6 is
scheduled to occur.
SECTION 9. Identity of Transfer Agent. Upon the appointment of any Transfer
Agent for the Preferred Stock, or any other shares of the Company's capital
stock issuable upon the exercise of the Warrants, the Company promptly will
notify the Holder of the name and address of such Transfer Agent.
SECTION 10. Notices. Any notice, except as provided in Section 8 of this
Certificate, or demand authorized by this Certificate to be given by the Holder
to the Company, will be in writing and will be delivered in person or by
facsimile transmission, or mailed by first class mail, postage prepaid, or by
overnight courier, to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇; confirmation no. (▇▇▇) ▇▇▇-▇▇▇▇;
Attention: Corporate Secretary. The Company may change the address or facsimile
numbers to which notices to it are to be transmitted, delivered or mailed
hereunder by notice to the Holder.
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Any notice pursuant to this Certificate by the Company to the Holder
will be in writing and will be delivered by first class mail, postage prepaid,
or by facsimile transmission, by overnight courier, or otherwise delivered by
hand, to the Holder at its address on the books of the Warrants Register or at
the facsimile number specified in writing by the Holder to the Company.
Notices delivered personally will be effective at the time delivered by
hand, notices sent by mail will be effective two days after mailing, notices
sent by facsimile transmission will be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery will be effective on
the next business day after timely delivery to the courier.
SECTION 11. Supplements and Amendments. This Certificate may not be
supplemented, amended or otherwise modified without the prior written consent of
the Holder.
SECTION 12. Successors. All the covenants and provisions of this
Certificate by or for the benefit of the Company will bind and inure to the
benefit of its respective successors and assigns.
SECTION 13. Merger or Consolidation of the Company. The Company will not
merge or consolidate into, or sell, transfer or lease all or substantially all
of its property to, any other corporation unless the successor, transferee or
lessee corporation, as the case may be (if not the Company), expressly assumes
the due and punctual performance and observance of each and every covenant and
condition of this Certificate to be performed and observed by the Company.
SECTION 14. APPLICABLE LAW. THIS CERTIFICATE AND THE WARRANTS EVIDENCED
HEREBY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
SECTION 15. Benefits of this Certificate. Nothing in this Certificate,
express or implied, will be construed to give to any person or entity other than
the Company and the Holder any legal or equitable right, remedy or claim under
this Certificate; and this Certificate will be for the sole and exclusive
benefit of the Company and the Holder.
SECTION 16. Captions. The captions of the Sections and paragraphs of this
Certificate have been inserted for convenience only and will have no substantive
effect.
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IN WITNESS WHEREOF, the Company has caused this Certificate to be duly
executed this [_______] day of [_______________], 2000.
DIME BANCORP, INC.
By:
Name:
Title:
Accepted:
[HOLDER]
By:____________________________________
Name:
Title:
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132
ELECTION FORM
(To be executed if Holder desires to exercise Warrant)
The undersigned hereby irrevocably elects to exercise the Warrant,
represented by this Certificate, to purchase ___ shares of Series C junior
nonvoting preferred stock ("Preferred Stock") as provided for herein and upon
confirmation from the Company that such shares of Preferred Stock will be
issued, agrees that it will tender in payment for such shares of Preferred Stock
payment of the purchase price in full in the form of a wire transfer of
immediately available funds to the order of Dime Bancorp, Inc. in the amount of
$_____________, all in accordance with the terms hereof. The undersigned
requests that a certificate for such shares of Preferred Stock be registered in
the name of ______________________ whose address is __________________________
and that such certificate will be delivered to ____________________________
whose address is ____________________________. If said number of shares of
Preferred Stock is less than all of the shares of Preferred Stock purchasable
hereunder, the undersigned requests that a new Certificate representing the
right to purchase the remaining balance of the shares of Preferred Stock be
registered in the name of ______________________ whose address is
_____________________ and that such certificate will be delivered to
________________ whose address is _________________________________.
Dated:________________
________________
(Insert Employer Identification
Number of Holder)
Signature _________________________
Note: Signature must conform in all
respects to name of holder as
specified on the face of this
Certificate in every particular,
without alteration or
enlargement or any change
whatsoever, unless this
Certificate has been assigned.
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133
ASSIGNMENT
(To be executed only upon
assignment of the Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ (Name and Address of Assignee, Must Be Printed or
Typewritten) the within Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________, Attorney, to transfer said Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated: ______________________
_______________________________
Signature of Registered Holder
Note: The above signature must
correspond with the name
as written on the face of
this Certificate in every
particular, without
alteration or enlargement
or any change
whatsoever.
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EXHIBIT 8
FORM OF SERIES D WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS INSTRUMENT AND THE SECURITIES ISSUABLE
UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS
ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN INVESTMENT AGREEMENT, DATED AS OF JULY 6, 2000 (THE "INVESTMENT
AGREEMENT"), BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN (THE "FIRST INVESTOR"), A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
EXERCISABLE AT ANY TIME UNTIL 5:00 P.M.,
NEW YORK CITY TIME, ON [____________]* UNLESS
EXTENDED AS PROVIDED BELOW.
DIME BANCORP, INC.
WARRANT
No. [__]
CERTIFICATE FOR [_________] WARRANTS TO
PURCHASE SHARES OF
SERIES D JUNIOR NONVOTING PREFERRED STOCK
OF DIME BANCORP, INC.
This Instrument (this "Certificate") certifies that, for value
received, [_____________________________________], or its registered assigns
(the "Holder"), is the owner of [_________] Warrants (as defined below), each of
which entitles the Holder to purchase at any time until 5:00 p.m., New York City
time, on [____________],* at the exercise price per share set forth herein (the
"Exercise Price"), one share of Series D junior nonvoting preferred stock, par
value $0.01 per share (the "Preferred Stock"), of Dime Bancorp, Inc., a Delaware
--------
* SEVEN YEARS AFTER ISSUE.
135
corporation (the "Company"). The number and type of shares purchasable upon
exercise of each Warrant and the Exercise Price will be subject to adjustment
from time to time as herein provided. In this Certificate, the right to purchase
each share of Preferred Stock is referred to as a "Warrant"; the shares of
Preferred Stock or, pursuant to the terms hereof, other securities, issuable
upon exercise of the Warrants are referred to as the "Warrant Shares". Anything
to the contrary notwithstanding, Warrants will not entitle the Holder to
purchase or otherwise acquire any interest in any shares of Common Stock, par
value $0.01 per share ("Common Stock"), of the Company, and the term "Warrant
Shares" does not include Common Stock. Certain rights of holders of shares of
Preferred Stock are determined by means of a "Reference Package" as defined in
the certificate of incorporation of the Company with respect to the Preferred
Stock.
Each Warrant possesses the following terms, conditions and provisions,
to which the Holder agrees by acceptance hereof:
SECTION 1. Registration; Transferability; Exchange of Certificate.
1.1 Registration. The Company will number and register each Warrant in
a register (the "Warrants Register") maintained at the office of the Company
(the "Office") as they are issued by the Company. The Company will be entitled
to treat the registered Holder of any Warrant, as set forth in the Warrants
Register, as its owner for all purposes and will not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person. The Warrants are transferable only on the Warrants Register maintained
at the Office upon delivery of the certificate or certificates evidencing such
Warrants, duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, will be
deposited and remain with the Company.
1.2 Exchange of Certificates. Subject to the provisions herein, each
Certificate may be exchanged for another Certificate(s) entitling the Holder to
purchase a like aggregate number of Warrant Shares as this Certificate then
entitles such Holder to purchase. If the Holder desires to exchange this
Certificate, it must deliver such request in writing to the Company and
surrender, properly endorsed if required by the Company, this Certificate.
Thereupon, the Company will sign and deliver to the entitled person the
requested new Certificate.
1.3 Exchange for Series C Warrants. At such time as the Company has
obtained the requisite approval of its stockholders or determines, at its sole
discretion, that such approval is not required by the rules of the New
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York Stock Exchange, each Warrant will be converted into, and exchanged for, one
warrant (a "Series C Warrant") to purchase a share of Series C junior nonvoting
preferred stock, par value $0.01 per share, of the Company (the "Series C
Stock"), which will be issued in the form of Exhibit 7 to the Investment
Agreement, registered in the name of the Holder, and will have terms identical
to the terms of the Warrant then in effect (other than that Series C Stock will
be substituted for the Preferred Stock and as otherwise expressly contemplated
by the form). Promptly after receiving notice from the Company of the conversion
of Warrants, the Holder will surrender this Certificate to the Company and will
be entitled to receive a certificate for the Series C Warrant issuable on such
conversion. Until surrendered, this Certificate will be deemed to represent the
Series C Warrants issuable on such conversion.
SECTION 2. Term of Warrants; Exercise of Warrants.
2.1 Term of Warrants. Subject to the terms of this Certificate, the
Holder has the right, exercisable until 5:00 p.m., New York City time, on
[______________],* (the "Expiration Date") to purchase from the Company (and the
Company will issue and sell to the Holder of the Warrants represented hereby)
such number of Warrant Shares that the Holder may at the time be entitled to
purchase, or any lesser number of Warrant Shares requested by the Holder. Each
Warrant not exercised prior to 5:00 p.m., New York City time, on the Expiration
Date will become void.
2.2 Exercise of Warrants. (a) The Warrants may be exercised in whole or
in part at any time upon surrender to the Company, at its Office, of this
Certificate, together with the Election Form attached hereto duly completed and
signed. Such surrender may be by facsimile transmission; provided, however, that
the Company will not be obligated to issue any Warrant Shares in respect of this
Certificate and such Election Form until it has received the original versions
of this Certificate and such Election Form. The earlier of the receipt of such
facsimile transmission or the receipt of such original certificate and form is
referred to herein as the "Exercise Date". Promptly following the Exercise Date,
the Holder will deliver, if it has not already done so, (1) original versions of
this Certificate and the Election Form and (2) a bank or certified check or wire
transfer of immediately available United States funds payable to the Company in
an amount equal to the product of the Exercise Price multiplied by the number of
Warrant Shares being purchased upon such exercise (the "Aggregate Exercise
Price"). "Business Day" means any day other than a Saturday, Sunday, or a day in
which banking
--------
* SEVEN YEARS AFTER ISSUE.
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institutions in the City of New York, New York are authorized or obligated by
law or executive order to close.
(b) Upon the surrender of this Certificate, with the Election Form duly
executed, and payment of the Exercise Price as aforesaid, the Company will
promptly cause to be issued and delivered with all reasonable dispatch to or
upon the written order of the Holder and in such name or names as the Holder may
designate a certificate(s) for the number of Warrant Shares so purchased,
together, at the option of the Company as provided in Section 7 hereof, with
cash in respect of any fractional Warrant Shares otherwise issuable upon such
surrender. Payment of the aggregate Exercise Price will be made by wire transfer
of immediately available funds. Any such Warrant Shares so purchased will be
deemed issued as of the Exercise Date.
(c) If the Holder of this Certificate exercises fewer than all the
Warrants at any time prior to the Expiration Date, a new Certificate evidencing
the remaining unexercised Warrants will be issued to the Holder.
2.3 Compliance with Government Regulations. The Company covenants that
if any Warrant Shares required to be reserved for purposes of the exercise of
Warrants require, under any Federal or state law or applicable governing rule or
regulation of any national securities exchange, registration with or approval of
any governmental authority, or listing on any such national securities exchange,
before such Warrant Shares may be issued upon exercise, the Company will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved by such governmental authority or listed on the relevant
national securities exchange, as the case may be; provided, however, that in no
event will such Warrant Shares be issued, and the Company is hereby authorized
to suspend the exercise of all Warrants, for the period during which such
registration, approval or listing is required but not in effect (the "Suspension
Period"); and provided, further, that, if a Suspension Period is in effect, the
term of the Warrants will be extended for the equivalent number of days of such
Suspension Period (the "Extension Period") with such Extension Period beginning
on the later of (a) the Expiration Date or (b) the date of the end of any
previously established Suspension Period. The Company will give prompt notice of
any such suspension and will promptly return this Certificate and payment of the
Exercise Price thereof to the Holder if such Holder tendered this Certificate
and Exercise Price precipitating or during such Suspension Period and will
promptly give notice of the lifting of any such suspension and the commencement
of any such Extension Period.
2.4 OTS Approval. Anything herein to the contrary notwithstanding, the
First Investor hereby acknowledges and agrees that its exercise of Warrants is
subject to the condition that it will have first received any and all necessary
approvals, authorizations and consents of the Office of Thrift Supervision or
any other relevant Governmental Entity (as defined in the Investment Agreement
necessary to permit such exercise.
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2.5 Exercise Price. The Exercise Price per share at which each Warrant
Share will be purchased upon exercise of each Warrant is the product of (a)
$21.50 and (b) the number of shares of Common Stock initially comprising the
Reference Package. The Exercise Price is subject to adjustment as set forth
herein, but will not be less than $0.01.
SECTION 3. Payment of Taxes. The Company will pay documentary, stamp or
similar issue or transfer taxes, if any, that may be payable in respect of the
issuance or delivery of any Warrant or of the Warrant Shares issuable upon the
exercise of such Warrants; provided, however, that the Company is not required
to pay any tax in respect of any registration or transfer involved in the
issuance or delivery of any Warrant or the issuance or delivery of certificates
for Warrant Shares in a name other than the Holder.
SECTION 4. Mutilated or Missing Certificates. If this Certificate is
mutilated, lost, stolen or destroyed, the Company will issue and deliver in
substitution for and upon cancellation of the mutilated Certificate, or in
substitution for the Certificate lost, stolen or destroyed, a new Certificate of
like tenor and representing an equivalent right or interest, but only upon, in
the case of a lost, stolen or destroyed certificate, receipt of evidence
satisfactory to the Company of such loss, theft or destruction.
SECTION 5. Reservation and Availability of Warrant Shares; Purchase and
Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The Company will reserve and
keep available free from preemptive rights, out of its authorized but unissued
shares of Preferred Stock, the full number of Warrant Shares deliverable upon
the exercise of all outstanding Warrants evidenced by this Certificate. The
Company or, if appointed, a transfer agent (a "Transfer Agent") will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares of Preferred Stock as are required for such purpose. The
Company will keep a copy of this Certificate on file with each Transfer Agent.
The Company will furnish such Transfer Agent with a copy of all notices of
adjustments and certificates related thereto which are transmitted to the Holder
pursuant to Section 6 hereof.
(b) The Company agrees that all Warrant Shares issuable upon exercise
of Warrants will, upon issuance, be duly authorized and validly issued, and
fully paid and nonassessable shares of Preferred Stock, with no personal
liability attaching to the ownership thereof, free from preemptive rights and
free from all taxes with respect to the issuance thereof, and all liens,
charges, and security interests.
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5.2 Warrant Shares Record Date. Each person in whose name any stock
certificate for Warrant Shares is issued will for all purposes be deemed to have
become the holder of record of the Warrant Shares represented thereby on, and
such stock certificate will be dated as of, the Exercise Date relating to such
Warrant Shares (unless exercise is then suspended in accordance with Section
2.3).
5.3 Purchase of Warrants by the Company. The Company has the right,
except as limited by law, other agreements or herein, to purchase or otherwise
acquire in negotiated transactions Warrants evidenced hereby at such times, in
such manner and for such consideration as it may deem appropriate.
5.4 Cancellation of Warrants. Any Certificate surrendered for exchange,
substitution, transfer or exercise in whole or in part will be cancelled by the
Company and retired.
SECTION 6. Adjustment of Exercise Price. The Exercise Price and the number
of Warrant Shares issuable on Exercise of each Warrant are subject to adjustment
from time to time as described in this Section 6. All calculations under this
Section 6 will be made to the nearest one-hundredth of a cent or to the nearest
one-hundredth of a share, as the case may be.
6.1 Anti-dilution Adjustments. Subject to Section 6.4, the following
adjustments will be made, to the extent (but only to the extent) that an
appropriate adjustment has not been made to the Reference Package:
(a) Common Stock Issued at Less than Market Value. If the Company issues or
sells any Common Stock other than Excluded Stock without consideration or for
consideration per share less than the Market Price of the Common Stock
(provided, however, that no sale of securities pursuant to a bona fide
underwritten public offering will be deemed to be for less than Market Price),
as of the day of such issuance or sale, the Exercise Price in effect immediately
prior to each such issuance or sale will immediately (except as provided below)
be reduced to the price determined by multiplying the Exercise Price, in effect
immediately prior to such issuance or sale, by a fraction, (x) the numerator of
which shall be (A) the number of shares of Common Stock outstanding immediately
prior to such issuance or sale plus (B) the number of shares of Common Stock
which the aggregate consideration received by the Company for the total number
of such additional shares of Common Stock so issued or sold would purchase at
the Market Price on the last trading day immediately preceding such issuance or
sale and (y) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale. In such event, the
number of Warrant Shares issuable upon the exercise of each Warrant shall be
increased to the number obtained by dividing (x) the product of (A) the number
of Warrant Shares issuable upon the exercise of each Warrant before such
adjustment, and (B) the Exercise Price
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in effect immediately prior to the issuance giving rise to this adjustment by
(y) the new Exercise Price determined in accordance with the immediately
preceding sentence. For the purposes of any adjustment of the Exercise Price and
the number of Warrant Shares issuable upon exercise of each Warrant pursuant to
this Section 6.1(a), the following provisions shall be applicable:
(1) In the case of the issuance of Common Stock for cash, the amount of
the consideration received by the Company shall be deemed to be the
amount of the cash proceeds received by the Company for such Common
Stock before deducting therefrom any discounts or commissions allowed,
paid or incurred by the Company for any underwriting or otherwise in
connection with the issuance and sale thereof.
(2) In the case of the issuance of Common Stock (otherwise than upon the
conversion of any shares of capital stock or other securities of the
Company) for a consideration in whole or in part other than cash,
including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other
than cash shall be deemed to be the fair value thereof as determined
by the Board of Directors, provided, however, that such fair value as
determined by the Board of Directors shall not exceed the aggregate
Market Price of the shares of Common Stock being issued as of the date
the Board of Directors authorizes the issuance of such shares.
(3) In the case of the issuance of (A) options, warrants or other rights
to purchase or acquire Common Stock (whether or not at the time
exercisable) or (B) securities by their terms convertible into or
exchangeable for Common Stock (whether or not at the time so
convertible or exchangeable) or options, warrants or rights to
purchase such convertible or exchangeable securities (whether or not
at the time exercisable):
(i) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other
rights to purchase or acquire Common Stock shall be deemed to
have been issued at the time such options, warrants or rights are
issued and for a consideration equal to the consideration
(determined in the manner provided in Sections 6.1(a)(1) and
(2)), if any, received by the Company upon the issuance of such
options, warrants or rights plus the minimum purchase price
provided in such options, warrants or rights for the Common Stock
covered thereby;
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(ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or acquire such
convertible or exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options,
warrants or rights were issued and for a consideration equal to
the consideration, if any, received by the Company for any such
securities and related options, warrants or rights (excluding any
cash received on account of accrued interest or accrued
dividends), plus the additional consideration (determined in the
manner provided in Section 6.1(a)(1) and (2)), if any, to be
received by the Company upon the conversion or exchange of such
securities, or upon the exercise of any related options, warrants
or rights to purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof;
(iii) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights
or conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by
the company upon such exercise, conversion or exchange, but
excluding changes resulting from the antidilution provisions
thereof (to the extent comparable to the antidilution provisions
contained herein), the Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant as then in effect
shall forthwith be readjusted to such Exercise Price and number
of Warrant Shares as would have been obtained had an adjustment
been made upon the issuance of such options, warrants or rights
not exercised prior to such change, or of such convertible or
exchangeable securities not converted or exchanged prior to such
change, upon the basis of such change;
(iv) on the expiration or cancellation of any such options, warrants
or rights (without exercise), or the termination of the right to
convert or exchange such convertible or exchangeable securities
(without exercise), if the Exercise Price and the number of
Warrant Shares issuable upon exercise of this Warrant shall have
been adjusted upon the issuance thereof, the Exercise Price and
the number of
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Warrant Shares issuable upon exercise of this Warrant shall
forthwith be readjusted to such Exercise Price and number of
Warrant Shares as would have been obtained had an adjustment been
made upon the issuance of such options, warrants, rights or such
convertible or exchangeable securities on the basis of the
issuance of only the number of shares of Common Stock actually
issued upon the exercise of such options, warrants or rights, or
upon the conversion or exchange of such convertible or
exchangeable securities; and
(v) if the Exercise Price and the number of Warrant Shares issuable
upon exercise of this Warrant shall have been adjusted upon the
issuance of any such options, warrants, rights or convertible or
exchangeable securities, no further adjustment of the Exercise
Price and the number of Warrant Shares issuable upon exercise of
this Warrant shall be made for the actual issuance of Common
Stock upon the exercise, conversion or exchange thereof;
provided, however, that no increase in the Exercise Price shall
be made pursuant to subclauses (i) and (ii) of this Section
6.1(a)(3).
(4) Notwithstanding anything to the contrary in this Section 6.1(a), no
adjustment will be required in respect of issuances of Common Stock
(or options to purchase Common Stock) pursuant to stock options
granted prior to the date hereof. Additionally, notwithstanding
anything to the contrary in this Section 6.1(a), adjustments will be
made for stock options and restricted stock granted to employees after
the date hereof pursuant to the terms of Section 6.1(b) rather than
Section 6.1(a).
(b) Employee Stock Options and Restricted Stock Grants. If the Company
issues or sells any Common Stock or its equivalent to employees at a price of
less than $17.50 per share, or grants any options to employees where the minimum
exercise price of such options is less than $17.50 per share of Common Stock,
then the number of Warrant Shares and the Exercise Price will be adjusted in
accordance with the provisions of Section 6.1(a) but treating the Market Price
as $17.50.
Notwithstanding anything to the contrary set forth in this Section 6.1(b),
no adjustment will be required in respect of issuance of employee stock options
or the sale of restricted stock to employees after adjustments have been made
pursuant to this Section 6.1(b) for the issuance of 5 million shares and options
at prices of less than $17.50 per share.
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(c) Certain Repurchases of Common Stock. In case the Company effects a Pro
Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior
to the effective date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (x) the product of (A) the number of shares of Common Stock
outstanding immediately before such Pro Rata Repurchase and (B) the Market Price
of a share of Common Stock on the trading day immediately preceding the first
public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase, minus (y) the aggregate purchase price of the
Pro Rata Repurchase, and of which the denominator shall be the product of (x)
the number of shares of Common Stock outstanding immediately prior to such Pro
Rata Repurchase minus the number of shares of Common Stock so repurchased and
(y) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement of such Pro Rata Repurchase. In such
event, the number of Warrant Shares issuable upon the exercise of each Warrant
shall be increased to the number obtained by dividing (x) the product of (A) the
number of Warrant Shares issuable upon the exercise of each Warrant before such
adjustment, and (B) the Exercise Price in effect immediately prior to the Pro
Rata Repurchase giving rise to this adjustment by (y) the new Exercise Price
determined in accordance with the immediately preceding sentence.
(d) Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 6.1(e)), any Warrant Shares issued or issuable upon
exercise of this Warrant after the date of such Business Combination or
reclassification will be exchangeable for the number of shares of stock or other
securities or property (including cash) to which the Warrant Shares issuable (at
the time of such consolidation, merger, sale, lease or conveyance) upon exercise
of this Warrant immediately prior to such Business Combination or
reclassification would have been entitled upon such Business Combination or
reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Holder shall
be appropriately adjusted so as to be applicable, as nearly as may reasonably
be, to any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant. In determining the kind and amount
of stock, securities or the property receivable upon consummation of such
Business Combination, if the holders of Common Stock have the right to elect the
kind or amount of consideration receivable upon consummation of such Business
Combination, then the Holder shall have the right to make a similar election
upon exercise of this Warrant with respect to the number of shares of stock or
other securities or property which the Holder will receive upon exercise of this
Warrant.
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(e) Stock Splits, Subdivisions, Reclassifications or Combinations. If the
Company shall (1) declare a dividend or make a distribution on its Common Stock
in shares of Common Stock, (2) subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares, or (3) combine or reclassify the
outstanding Common Stock into a smaller number of shares, the number of Warrant
Shares issuable upon exercise of this Warrant at the time of the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be proportionateley adjusted so that the
Holder after such date shall be entitled to purchase the number of Warrant
Shares which such holder would have owned or been entitled to receive after such
date had this Warrant been exercised immediately prior to such date. Successive
adjustments in the Exercise Price shall be made whenever any event specified
above shall occur. In such event the Exercise Price in effect at the time of the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (A) the number of Warrant Shares
issuable upon the exercise of this Warrant before such adjustment and (B) the
Exercise Price in effect immediately prior to the issuance giving rise to this
adjustment by (y) the new number of shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.
(f) Other Distributions. In case the Company shall fix a record date for
the making of a distribution to all holders of shares of its Common Stock (1) of
shares of any class other than its Common Stock or (2) of evidence of
indebtedness of the Company or any Subsidiary or (3) of assets, or (4) of rights
or warrants (in each case excluding (A) Ordinary Cash Dividends, (B) any
dividends or distribution referred to in Section 6.1(e) and (C) any LTWs as
defined in the Investment Agreement), in each such case the Exercise Price in
effect on the record date will be reduced by an amount equal, in the case of a
distribution in cash, to the amount thereof payable per share of the Common
Stock, or in the case of any other distribution, to the fair value thereof per
share of the Common Stock as determined by the Board of Directors (in each case
multiplied by the number of shares of Common Stock then comprising the Reference
Package). Such reductions shall take effect on the record date for such
distribution. In such event, the number of Warrant Shares issuable upon the
exercise of each Warrant shall be increased to the number obtained by dividing
(x) the product of (A) the number of Warrant Shares issuable upon the exercise
of this Warrant before such adjustment, and (B) the Exercise Price in effect
immediately prior to the issuance giving rise to this adjustment by (y) the new
Exercise Price determined in accordance with the immediately preceding sentence.
In the event that such distribution is not so made, the Exercise Price and the
number of Warrant Shares issuable upon exercise of this Warrant then in effect
shall be readjusted, effective as of the date when the Board determines not to
distribute such shares, evidences of indebtedness, assets, rights or warrants,
as the case may be, to the Exercise Price that would then be in effect and the
number of Warrant Shares that would then be issuable upon exercise
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of this Warrant if such record date and distribution had not been fixed.
(g) Adjustments for Special Payments. In the event that the Company makes
any Special Payments, for so long as this Warrant is held by the First Investor
the Exercise Price in effect immediately prior to such Special Payments will be
reduced by an amount equal to the product of the number of shares of Common
Stock then comprising the Reference Package and the quotient of (x) the amount
of such Special Payments multiplied by 24.9%, divided by (y) the aggregate
number of shares of Common Stock underlying (or comprising the reference package
of any capitol stock underlying all warrants to purchase capital stock of the
Company theretofore issued to Holder under the Investment Agreement (including
the Warrants). In such event, the number of Warrant Shares issuable upon
exercise of each Warrant shall be increased to the number obtained by dividing
(x) the product of (A) the number of Warrant Shares issuable upon exercise of
each Warrant before such adjustment, and (B) the Exercise Price in effect
immediately prior to the issuance giving rise to this adjustment by (y) the new
Exercise Price determined in accordance with the immediately preceding sentence.
(h) No adjustment in the Exercise Price or the number of Warrant Shares
issuable upon the exercise of each Warrant is required if the amount of the
adjustment is less than $0.01 or one-hundredth (1/100th) of a share, as the case
may be; provided, however, that any adjustments which by reason of this Section
6.1(h) are not required to be made will be carried forward and given effect in
any subsequent adjustment.
(i) For the purposes of this Section 6.1, the term "shares of Common Stock"
means (1) the class of stock designated as the Common Stock of the Company at
the date hereof or (2) any other class of stock resulting from successive
changes or reclassifications of such shares consisting solely of changes in par
value, or from no par value to par value.
(j) Notwithstanding the foregoing, in any case which this Section 6.1
provides that an adjustment becomes effective immediately after a record date
for an event, the Company may defer until the occurrence of such event (1)
issuing to the Holder of any Warrant exercised after such record date and before
the occurrence of such event the additional securities issuable upon such
conversion before giving effect to such adjustment and (2) paying to the Holder
any amount in cash in lieu of any fraction pursuant to Section 7.
(k) If the Company takes any action affecting the Common Stock, other than
action described in this Section 6.1, which in the opinion of the Board of
Directors of the Company would materially adversely affect the conversion rights
of the Holder of the Warrants, the Exercise Price for the Warrants and/or the
number of Warrant Shares received upon exercise of the
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Warrant may be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as such Board may determine in good faith to be equitable in
the circumstances. Failure of the Board of Directors of the Company to provide
for any such adjustment prior to the effective date of any such action by the
Company affecting the Common Stock will be evidence that the Board of Directors
of the Company has determined that it is equitable to make no adjustments in the
circumstances.
(l) Notwithstanding any of the foregoing, no adjustment will be made to the
Exercise Price or to the number of shares purchasable upon exercise of the
Warrants with respect to any issuance or offering by the Company, by dividend on
Common Stock or otherwise, of any LTWs (as defined in the Investment Agreement),
provided, however, that for so long as this Warrant is held by the First
Investor, if the average total trading price of any such instruments on a
national securities exchange for the 20 trading days beginning ten days after
issuance of the LTWs, or, if the LTWs are not traded on a national securities
exchange, the total fair market value of the LTWs as determined by the Board of
Directors (subject to appraisal by a mutually- agreeable firm if the Holder
disputes such valuation), is greater than $100 million, then the Exercise Price
will be reduced by an amount (to be multiplied by the number of shares of Common
Stock then comprising the Reference Package) equal to (1) the difference between
the average total trading price and $100 million multiplied by (2) 0.2214, or if
the Second Closing under the Investment Agreement does not occur for any reason,
0.1980, and then divided by (3) the Total Number where the "Total Number" has
the meaning provided for in the Investment Agreement adjusted such that if, at
any time after the date of the Investment Agreement, the Company (A) declares or
pays a dividend on any Common Stock payable in Common Stock, (B) subdivides any
Common Stock or (C) combines any Common Stock into a smaller number of shares,
then, in each case, the Total Number after such event shall be the number of
shares of Common Stock that a holder of the Total Number immediately prior to
such event would hold thereafter as a result of such event.
6.2 Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Exercise
Price or increase the number of Warrant Shares for which the Warrant may be
exercised to any amount deemed appropriate by the Board of Directors of the
Company; provided, however, that if the Company elects to make such adjustment,
such adjustment will remain in effect for at least a 15- day period, after which
time the Company may, at its option, reinstate the Exercise Price or number of
Warrant Shares in effect prior to such reduction, subject to any interim
adjustments pursuant to Section 6.1.
6.3 Notice of Adjustment. Whenever the Exercise Price or number of
Warrant Shares is adjusted, the Chief Financial Officer of the Company will
compute the adjustments in accordance with the foregoing provisions and will
prepare a certificate setting forth the adjustments and showing in reasonable
detail the facts upon which such adjustments are based. A copy of such
certificate will be filed promptly with the Transfer Agent. Promptly after
delivery of such certificate, the Company will prepare a notice setting forth
the adjustments and the date on which such adjustments become effective and will
mail such notice of such adjustments to the Holder at the last address of the
Holder as shown on the Warrants Register.
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6.4 Miscellaneous. Except as provided in Section 6.1, no adjustment in
respect of any dividends or other payments or distributions made to Holders of
securities issuable upon exercise of Warrants will be made during the term of a
Warrant or upon the exercise of a Warrant. No adjustment will be made to the
Warrant (including the Warrant Share number or the Exercise Price) with respect
to any event that results in an adjustment to the Reference Package. To the
extent (but only to the extent) that the Holder's rights hereunder have been
protected by the Holder's exercise (at Holder's election and reasonable
allocation) of its preemptive rights under the Investment Agreement, no
adjustments will be made to the Exercise Price or the number of Warrant Shares.
In addition, notwithstanding any of the foregoing, no such adjustment will be
made for the issuance or conversion of (a) any Securities (as defined in the
Investment Agreement) or (b) any rights under the Rights Agreement (as defined
in the Investment Agreement) or any successor agreement unless such rights
become exercisable (in which case they will be deemed for purposes of this
Agreement to have been issued at the time they become exercisable).
6.5 Statement on Certificate. Irrespective of any adjustments in the
number or kind of securities purchasable upon the exercise of the Warrants or
the Exercise Price, the Certificates may continue to express the same price and
number and kind of shares as are stated in this Certificate.
6.6 Definitions. For purposes of Section 6.1, the following terms shall
have the following meanings:
"Business Combination" means (1) any consolidation, merger, share
exchange or similar business combination transaction involving the
Company with any person or (2) the sale, assignment, conveyance,
transfer, lease or other disposition by the Company of all or
substantially all of its assets.
"Excluded Stock" means shares of Common Stock issued by the Company as
a stock dividend payable in shares of Common Stock, or upon any
subdivision or split-up of the outstanding shares of capital stock in
each case which is subject to Section 6.1(e), or upon conversion of
shares of capital stock (but not the issuance of such capital stock
which will be subject to the provisions of Section 6.1(a)(3)).
"Market Price" means, with respect to a particular security, on any
given day, the average of the daily closing prices for 10 consecutive
trading days commencing on the 5th trading day prior to the day in
question or, in case no such reported sale takes place on such day,
the average of the last closing bid and asked prices regular way, in
either case on the principal national securities exchange on which the
applicable security is listed or
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admitted to trading, or if not listed or admitted to trading on any
national securities exchange, (1) the average of the daily closing
prices for 10 consecutive trading days commencing on the 5th trading
day prior to the day in question reported by the NASDAQ Stock Market
if such security is traded over-the-counter and quoted in the NASDAQ
Stock Market, or (2) if such security is so traded, but not so quoted,
the average of the closing reported bid and asked prices of such
security as reported by the NASDAQ Stock Market or any comparable
system, or (3) if such security is not listed on the NASDAQ Stock
Market or any comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association
of Securities Dealers, Inc. selected from time to time by the Company
for that purpose. If such security is not listed and traded in a
manner that the quotations referred to above are available for the
period required hereunder, the Market Price per share of Common Stock
shall be deemed to be the fair value per share of such security as
determined in good faith by the Board of Directors of the Company.
"Ordinary Cash Dividends" means regular quarterly cash dividends
generally consistent with past practices, including periodic
increases.
"Pro Rata Repurchases" means any purchase of shares of Common Stock by
the Company or any Affiliate (as defined in the Investment Agreement)
thereof pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or pursuant to any other offer
available to substantially all holders of Common Stock, whether for
cash, shares of capital stock of the Company, other securities of the
Company, evidences of indebtedness of the Company or any other person
or any other property (including, without limitation, shares of
capital stock, other securities or evidences of indebtedness of a
subsidiary of the Company), or any combination thereof, effected while
this Warrant is outstanding; provided, however, that "Pro Rata
Repurchase" shall not include any purchase of shares by the Company or
any Affiliate thereof made directly or indirectly in accordance with
the requirements of Rule 10b-18 as in effect under the Exchange Act or
any tender offer commenced in connection with the transactions in
which this Warrant is issued. The "effective date" of a Pro Rata
Repurchase shall mean the date of acceptance of shares for purchase or
exchange under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata
Repurchase that is
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not a tender or exchange offer.
"Special Payments" are any payment or series of payments pursuant to a
final, nonappealable judgment or a final settlement or agreement
exceeding in the aggregate $15 million to ▇▇▇▇▇▇ United Bancorp
(including any successor, "▇▇▇▇▇▇") pursuant to the Termination,
Option Cancellation and Settlement Agreement, dated as of April 28,
2000, between ▇▇▇▇▇▇ and the Company (as amended or modified, the
"▇▇▇▇▇▇ Agreement", except to the extent that such payment or payments
result or arise from (1) a misrepresentation by the First Investor in
Section 2.3(f) or a breach by the First Investor of Section 4.1(a) of
the Investment Agreement or (2) any actual or potential "Acquisition
Transaction," "Subsequent Transaction" or "Subsidiary Transaction" (as
such terms are defined in the ▇▇▇▇▇▇ Agreement) approved, recommended
or authorized by the Board of Directors of the Company after the date
of the Investment Agreement.
SECTION 7. Fractional Interests. The Company may, but will not be required
to, issue fractional Warrant Shares on the exercise of Warrants. If more than
one Warrant is presented for exercise in full at the same time by a Holder, the
exercise thereof will be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would be issuable on the exercise of any Warrant (or
specified portion thereof), the Company may, in its sole discretion, issue such
fraction of a Warrant Share or pay to the Holder of the Warrant an amount in
cash equal to the product of (a) the Current Market Price per share of Common
Stock computed as of the trading day immediately preceding the date the Warrant
is presented for exercise and (b) the Reference Package as of such date,
multiplied by such fraction of a Warrant Share (but in no event less than an
amount equal to such fraction multiplied by the Exercise Price in effect at such
time).
SECTION 8. No Rights as Stockholders; Notices to Holder. Nothing contained
in this Certificate will be construed as conferring upon the Holder or its
permitted transferees the right to vote or to receive dividends (except as
provided in Section 6 hereof) or to consent or to receive notice as stockholders
in respect of any meeting of stockholders of the Company for the election of the
directors of the Company or any other matter, or any rights whatsoever as
stockholders of the Company. However, at any time prior to the expiration of the
Warrants and prior to their exercise, the Company will give reasonable prior
notice to the Holder of any date on which an adjustment pursuant to Section 6 is
scheduled to occur.
SECTION 9. Identity of Transfer Agent. Upon the appointment of any Transfer
Agent for the Preferred Stock, or any other shares of the Company's capital
stock issuable upon the exercise of the Warrants, the Company
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promptly will notify the Holder of the name and address of such Transfer Agent.
SECTION 10. Notices. Any notice, except as provided in Section 8 of this
Certificate, or demand authorized by this Certificate to be given by the Holder
to the Company, will be in writing and will be delivered in person or by
facsimile transmission, or mailed by first class mail, postage prepaid, or by
overnight courier, to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇; facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇; confirmation no. (▇▇▇) ▇▇▇-▇▇▇▇;
Attention: Corporate Secretary. The Company may change the address or facsimile
numbers to which notices to it are to be transmitted, delivered or mailed
hereunder by notice to the Holder.
Any notice pursuant to this Certificate by the Company to the Holder
will be in writing and will be delivered by first class mail, postage prepaid,
or by facsimile transmission, by overnight courier, or otherwise delivered by
hand, to the Holder at its address on the books of the Warrants Register or at
the facsimile number specified in writing by the Holder to the Company.
Notices delivered personally will be effective at the time delivered by
hand, notices sent by mail will be effective two days after mailing, notices
sent by facsimile transmission will be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery will be effective on
the next business day after timely delivery to the courier.
SECTION 11. Supplements and Amendments. This Certificate may not be
supplemented, amended or otherwise modified without the prior written consent of
the Holder.
SECTION 12. Successors. All the covenants and provisions of this
Certificate by or for the benefit of the Company will bind and inure to the
benefit of its respective successors and assigns.
SECTION 13. Merger or Consolidation of the Company. The Company will not
merge or consolidate into, or sell, transfer or lease all or substantially all
of its property to, any other corporation unless the successor, transferee or
lessee corporation, as the case may be (if not the Company), expressly assumes
the due and punctual performance and observance of each and every covenant and
condition of this Certificate to be performed and observed by the Company.
SECTION 14. APPLICABLE LAW. THIS CERTIFICATE AND THE WARRANTS EVIDENCED
HEREBY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
SECTION 15. Benefits of this Certificate. Nothing in this Certificate,
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express or implied, will be construed to give to any person or entity other than
the Company and the Holder any legal or equitable right, remedy or claim under
this Certificate, and this Certificate will be for the sole and exclusive
benefit of the Company and the Holder.
SECTION 16. Captions. The captions of the Sections and paragraphs of
this Certificate have been inserted for convenience only and will have no
substantive effect.
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IN WITNESS WHEREOF, the Company has caused this Certificate to be duly
executed this [_______] day of [_______________], 2000.
DIME BANCORP, INC.
By:
Name:
Title:
Accepted:
[HOLDER]
By:______________________________
Name:
Title:
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153
ELECTION FORM
(To be executed if Holder desires to exercise Warrant)
The undersigned hereby irrevocably elects to exercise the Warrant,
represented by this Certificate, to purchase ___ shares of Series C junior
nonvoting preferred stock ("Preferred Stock") as provided for herein and upon
confirmation from the Company that such shares of Preferred Stock will be
issued, agrees that it will tender in payment for such shares of Preferred Stock
payment of the purchase price in full in the form of a wire transfer of
immediately available funds to the order of Dime Bancorp, Inc. in the amount of
$_____________, all in accordance with the terms hereof. The undersigned
requests that a certificate for such shares of Preferred Stock be registered in
the name of ______________________ whose address is __________________________
and that such certificate will be delivered to ____________________________
whose address is ____________________________. If said number of shares of
Preferred Stock is less than all of the shares of Preferred Stock purchasable
hereunder, the undersigned requests that a new Certificate representing the
right to purchase the remaining balance of the shares of Preferred Stock be
registered in the name of ______________________ whose address is
_____________________ and that such certificate will be delivered to
________________ whose address is _________________________________.
Dated:________________
________________
(Insert Employer Identification
Number of Holder)
Signature _________________________
Note: Signature must conform in all
respects to name of holder as
specified on the face of this
Certificate in every particular,
without alteration or
enlargement or any change
whatsoever, unless this
Certificate has been assigned.
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ASSIGNMENT
(To be executed only upon
assignment of the Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ (Name and Address of Assignee, Must Be Printed or
Typewritten) the within Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________, Attorney, to transfer said Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated: ______________________
_______________________________
Signature of Registered Holder
Note: The above signature must
correspond with the name
as written on the face of
this Certificate in every
particular, without
alteration or enlargement
or any change
whatsoever.
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EXHIBIT 9
FORM OF AMENDMENT TO STOCKHOLDER PROTECTION RIGHTS AGREEMENT
AMENDMENT, dated July 6, 2000 (this "Amendment"), to the
Shareholder Protection Rights Agreement, dated October 20, 1995, between
Dime Bancorp, Inc. (the "Company"), and The Dime Savings Bank of New York,
FSB (the "Rights Agent") (the "Rights Agreement").
WITNESSETH:
WHEREAS, the Company and the Rights Agent have heretofore
entered into the Rights Agreement;
WHEREAS, the original Rights Agent (The First National Bank of
Boston) has, as of June 23, 2000, been replaced by the Company, and the current
Rights Agent is The Dime Savings Bank of New York, FSB (also, the "Rights
Agent");
WHEREAS, the Company and the Rights Agent desire to amend
the Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
(1) Amendment of Section 1.1.
(a) The definition of "Acquiring Person" appearing in Section 1.1
of the Rights Agreement is amended to read in its entirety as follows:
"Acquiring Person" shall mean any Person who is a Beneficial Owner
of 20% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include (i) any
Person who shall become the Beneficial Owner of 20% or more of the
outstanding shares of Common Stock solely as a result of an acquisition
by the Company of shares of Common Stock, until such time thereafter as
such Person shall become the Beneficial Owner (other than by means of a
stock dividend or stock split) of any additional shares of Common Stock,
(ii) any Person who is the Beneficial Owner of 20% or more of the
outstanding shares of Common Stock but who acquired Beneficial Ownership
of shares of Common Stock without any plan or intention to seek or affect
control of the Company, if such Person promptly enters into an
irrevocable commitment promptly to divest, and thereafter promptly
divests (without exercising or retaining any power, including voting,
with respect to such shares), sufficient shares of Common Stock
156
(or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of
20% or more of the outstanding shares of Common Stock, (iii) any Person
who Beneficially Owns shares of Common Stock consisting solely of one or
more of (A) shares of Common Stock Beneficially Owned pursuant to the
grant or exercise of an option granted to such person by the Company in
connection with an agreement to merge with, or acquire, the Company
entered into prior to a Flip-in Date, (B) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common
Stock), Beneficially Owned by such Person or its Affiliates or Associates
at the time of grant of such option, (C) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common
Stock) acquired by Affiliates or Associates of such Person after the time
of such grant which, in the aggregate, amount to less than 1% of the
outstanding shares of Common Stock and (D) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common
Stock) which are held by such Person in trust accounts, managed accounts
and the like or otherwise held in a fiduciary capacity, that are
beneficially owned by third persons who are not Affiliates or Associates
of such Person or acting together with such Person to hold such shares,
or which are held by such Person in respect of a debt previously
contracted, and (iv) Warburg, ▇▇▇▇▇▇ Equity Partners, L.P. ("WPEP") and
its Affiliates, provided that such persons beneficially own only the
Common Stock (or securities convertible into or exchangeable for Common
Stock) (A) purchased pursuant to the Investment Agreement dated July 6,
2000 (the "Investment Agreement"), by and between the Company and WPEP,
(B) acquired pursuant to the exercise of any warrants or the conversion
of any preferred stock purchased pursuant to the Investment Agreement,
(C) acquired in accordance with Section 4.1(a) or Section 4.4 of the
Investment Agreement, or pursuant to any other antidilution adjustment,
preemptive right or similar provision contained therein or in the terms
of the securities issued thereunder and additional shares of Common Stock
not exceeding 2% of the outstanding shares of Common Stock. In addition,
the Company, any wholly-owned Subsidiary of the Company and any employee
stock ownership or other employee benefit plan of the Company or a
wholly-owned subsidiary of the Company shall not be an Acquiring Person.
(b) The definition of "Expiration Time" is amended to read in its
entirety as follows:
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on the
tenth-year anniversary of the Record Time, (iv) consummation of the
merger of the Company into another corporation pursuant to an agreement
entered into prior to a Flip-in Date and (v) unless the Separation Time
shall have
157
occurred, the tenth Business Day following the 2002 annual meeting of the
Company's stockholders.
(c) The following paragraph shall be inserted, in alphabetical
order, in Section 1.1 of the Rights Agreement:
"Qualifying Offer" means a tender or exchange offer for all the
outstanding shares of Common Stock made by a person (the "Offeror") who
is not, prior to the purchase of shares pursuant to such offer, an
Acquiring Person or Affiliate or Associate thereof having the following
characteristics:
(1) the consideration offered for each share of Common Stock
includes at least 50% cash and the non-cash portion of the
consideration is of a kind and quality that, taking into account
the relevant characteristics and size of the market for such
property, provides sufficient liquidity, after giving effect to
the purchase of all the Common Stock pursuant to the offer, so
that all the holders of Common Stock would be able to promptly
dispose of the non-cash portion of the consideration without
suffering any material diminution of value, as determined in the
judgment of at least a majority of the members of the Board of
Directors who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an
Acquiring Person or the Offeror ("Disinterested Directors"); and
(2) such offer is accepted by the Beneficial Owners of at
least 75% of the outstanding shares of Common Stock (other than
the Offeror and its Affiliates and Associates).
The liquidity determination to be made pursuant to this definition
by the Disinterested Directors shall be made based upon advice
from one or more nationally recognized investment banking firms.
Anything herein to the contrary notwithstanding, the purchase of shares
of Common Stock solely pursuant to a Qualifying Offer will not result in
a Flip-in Date or Flip-over Transaction or Event.
(2) This Amendment may be executed in any number of counterparts,
each of which shall be an original, but all of such counterparts shall together
constitute one and the same instrument.
(3) Except as set forth in this Amendment, the Rights Agreement
shall remain in full force and effect without amendment, modification or waiver.
(4) This Amendment shall be governed by and construed in
158
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within such State.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the day and year first above written.
DIME BANCORP, INC.
By:___________________________
Name:
Title:
THE DIME SAVINGS BANK OF
NEW YORK, FSB
By:___________________________
Name:
Title:
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EXHIBIT 10
PURCHASE OF WARRANTS ON CHANGE IN CONTROL
In the circumstance of a Change in Control as a result of a merger or
acquisition of the Company, the entering into definitive documentation for such
event or the recommendation by the Board of Directors that stockholders tender
their shares into a tender or exchange offer that would result in a Change in
Control shall be referred to as a "Trigger Date".
The third-party that has entered into such definitive documentation with the
Company or that has commenced such a tender or exchange offer shall be referred
to as "Acquiror".
The average of the Acquiror's closing stock prices for the 10 trading day period
immediately preceding the later of (x) the receipt of regulatory approval or (y)
30 days prior to the Initiation Date (as defined below) shall be referred to as
"Acquiror's Share Price".
The average of the Company's closing stock prices for the same 10 trading day
period shall be referred to as "Company's Stock Price".
The computation of the value of each Warrant shall use the Black-Scholes
calculation method for valuing options using the following assumptions:
1) Volatility of 40%;
2) Dividend Yield of 1.9%;
3) Interest Rate of 6.25%;
4) Exercise price will be the Exercise Price as adjusted and then in
effect for the Warrant at the time of the Trigger Date;
5) Term of the Warrant will be the remaining term of the Warrant from
the Trigger Date to the stated expiration date of the Warrant; and
6) The underlying security price for purposes of the Black-Scholes
model will be calculated as follows: a) In the event of an "all
cash" deal, the cash per share offered to the Company's
shareholders by the Acquiror; b) in the event of an "all stock"
deal: x) in the event of a fixed exchange ratio transaction, the
price per Company's common share arrived at by multiplying the
Acquiror's Share Price by the number of Acquiror's shares being
offered for 1 share of the Company's stock; and y) in the event of
a fixed value transaction, the value offered by the Acquiror for 1
share of Company common stock. In the event of a transaction
160
contemplating various forms of consideration for each share of the
Company's common stock, the cash portion, if any, shall be valued
as a) above; the stock portion shall be valued as b) above; and
any other forms of consideration shall be valued by the Company in
good faith, without applying any discounts to such consideration.
Upon a calculation of the value of the Warrant based on the Black-Scholes
computations above, such value will not be discounted in any way. If the
Investor disputes the valuation of the Warrant, the Company and the Investor
will chose a mutually-agreeable firm to compute the valuation of the Warrant
using the guidelines above, and such valuation shall be final. The fees and
expenses of such firm shall be borne equally by the Company and the Investor.
In the event the Investor decides to exchange the Warrants for shares of Common
Stock of the Company, the Investor will receive that number of shares of Common
Stock arrived at by dividing the value of the Warrants, as determined above, by
the Company's Stock Price. The Investor can initiate such exchange only after
the Company has received both regulatory and shareholder approval (such notice
to be provided by the Company to the Investor immediately upon receipt of such
approvals) or in the case of a tender or exchange offer referenced above after
the minimum tender condition and all other material conditions to such offer
have been satisfied (the later of such dates being the "Initiation Date"), and
may execute the exchange with the Company within the 10 business day period
immediately after the receipt of the latter of regulatory approval or
shareholder approval (it being agreed that in the context of such a tender or
exchange offer, shareholder approval shall be deemed to have occurred upon the
satisfaction of the minimum tender condition along with all other material
conditions). The Company covenants it will not close the Change in Control
transaction or otherwise facilitate the closing of a tender or exchange offer as
referenced above until giving the Investor at least 5 business days to sell or
distribute the Common Stock to be received in an exchange, such 5-day period to
be included in the 10-day period above and will cooperate with Investor to
ensure to the extent reasonably practicable that there is an effective
registration statement available to facilitate such a sale during such 5-day
period or an effective opportunity is provided in the case of a tender or
exchange offer as referenced above to tender such shares into the offer.
In all other Change in Control events, the computation of the option value of
each Warrant shall use the Black-Scholes calculation method for valuing options
using the following assumptions:
1) Volatility of 40%;
2) Dividend Yield of 1.9%;
3) Interest Rate of 6.25%;
161
4) Exercise price will be the Exercise Price as adjusted and then in
effect for the Warrant at the time of the Change in Control event;
5) Term of the Warrant will be the remaining term of the Warrant from
the Change in Control event date to the stated expiration date of
the Warrant; and
6) The underlying security price for purposes of the Black-Scholes
model will be calculated using the 5 day average of the closing
market price of the Company's common stock immediately after the
Change in Control event date ("Company Stock Price").
Upon a calculation of the value of the Warrant based on the Black-Scholes
computations above, such value will not be discounted in any way. If the
Investor disputes the valuation of the Warrant, the Company and the Investor
will chose a mutually-agreeable firm to compute the valuation of the Warrant
using the guidelines above, and such valuation shall be final. The fees and
expenses of such firm shall be borne equally by the Company and the Investor. In
the event the Investor decides to exchange the Warrants for shares of Common
Stock of the Company, the Investor will receive that number of shares of Common
Stock arrived at by dividing the value of the Warrants, as determined above, by
the Company Stock Price.
In all circumstances above the calculation of the Warrant value will be based on
the assumption that all Warrants have been converted into Common Warrants based
on the applicable formula for conversion contained therein (and giving effect to
any adjustments which have occurred under paragraphs (2) or (3) of Section
4.2(e) of the Investment Agreement) and no discount will be applied with respect
to any still pending restrictions on such conversion rights.
162
EXHIBIT 11
SEC REGISTRATION - RELATED PROVISIONS
1. Procedures. So long as the Registration Statement is effective,
Investor or any transferee whose resales are covered by the Registration
Statement agrees to provide a representative of the Company (which will be
designated from time to time) with reasonable prior notice of its intention to
conduct the sale or other transfer or disposition of any Securities pursuant to
the Registration Statement and agrees not to proceed with such sale, transfer or
disposition pursuant to the Registration Statement until it has received a
response from the representative notifying it that none of the following is then
occurring: (A) the happening of any event, as a result of which the Registration
Statement, any prospectus or prospectus supplement constituting a part thereof,
or any document incorporated by reference in any of the foregoing contains an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
in the light of the circumstances under which they are made; (B) the Company is
in possession of material information that it deems advisable not to disclose in
a Registration Statement; (C) that the Company has determined to proceed with a
public offering of its equity securities and, in the judgment of the managing
underwriter thereof or the Company (if such offering is not underwritten), sales
under the Registration Statement would have a material adverse effect on such
offering; or (D) the Company is engaged in any program for the purchase of
Common Shares, unless such repurchase program and the requested sale may proceed
concurrently pursuant to an exemption under the SEC's Regulation M or any other
applicable exemption (it being understood that, to the extent consistent with
any such program, the Company will use commercially reasonable efforts to make
an exemption available to the Investor or any such transferee or to otherwise
open up a sufficient window period under Regulation M to enable the Investor or
any such transferee to obtain the liquidity it desires hereunder). The Company
agrees to respond to any inquiry pursuant to the preceding sentence within one
hour after the receipt of notice and that any period in which sales, transfers
or dispositions must be discontinued as a result of a given occurrence of a
circumstance referred to in such sentence shall not exceed 60 days, and shall
not exceed 105 days in the aggregate over any 12-month period. It will be a
condition for any transferee to be permitted to sell, transfer or dispose of
Securities pursuant to the Registration Statement that the transferee agrees to
comply with this Section 1.
2. Indemnification by the Company. The Company agrees to indemnify and
hold harmless Investor, its officers and directors, and each person, if any, who
controls Investor, within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by Investor, any of its officers or
163
directors or any such controlling person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any prospectus relating to the Securities (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished by
Investor or the plan of distribution furnished in writing to the Company by or
on behalf of Investor expressly for use therein; provided that the foregoing
indemnity agreement with respect to any prospectus shall not inure to the
benefit of Investor if a copy of the most current prospectus at the time of the
delivery of the Securities was not provided to the purchaser and such current
prospectus would have cured the defect giving rise to such loss, claim, damage
or liability. The Company also agrees to indemnify any Underwriters of the
Securities, their officers and directors and each person who controls such
Underwriters on substantially the same basis as that of the indemnification of
Investor provided in this Section 2. As used throughout this Exhibit,
"Underwriter" means a securities dealer who purchases any Securities as
principal and not as part of such dealer's market-making activities.
3. Indemnification by Investor. Investor agrees to indemnify and hold
harmless the Company, its officers and directors, and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to Investor, but only with reference to information
furnished by Investor or the plan of distribution furnished in writing by or on
behalf of Investor expressly for use in the Registration Statement or any
prospectus relating to the Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Investor also agrees to indemnify and hold
harmless any Underwriters of the Securities, their officers and directors and
each person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Company provided in this Section 3.
Notwithstanding anything to the contrary contained in this Exhibit, the
obligations of Investor pursuant to this Section 3 shall not exceed the amount
of proceeds received by Investor for the relevant Securities.
4. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 2 or 3,
such person (the "Indemnified Party") shall promptly notify the person against
whom such indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon the request of the Indemnified Party,
164
shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel (which counsel shall be
reasonably acceptable to the Company), but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (a) the Indemnifying
Party and the Indemnified Party shall have mutually agreed in writing to the
retention of such counsel or (b) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential conflicts of interests between them.
It is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings involving one or more Indemnified Parties in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel required under the
circumstances) at any time for all such Indemnified Parties, and that all such
fees and expenses shall be reimbursed as they are submitted in writing for
payment. In the case of any such separate firm for the Indemnified Parties, such
firm shall be designated in writing by Investor. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.
5. Contribution. If the indemnification provided for in this Exhibit is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (a) in such proportion as is appropriate to reflect the relative
benefits received by the Company, Investor and the Underwriters from the
offering of the securities, or (b) if the allocation provided by clause (a)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (a) above but
also the relative fault of the Company, Investor and the Underwriters in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, Investor and the
Underwriters shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by each of the Company and Investor and
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the prospectus, bear
to the aggregate public offering price of the securities. The relative fault of
the Company, Investor and the Underwriters shall be determined by reference to,
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among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Investor agree that it would not be just
and equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and Investor shall not
be required to contribute any amount in excess of the amount by which the net
proceeds of the offering (before deducting expenses) received by Investor
exceeds the amount of any damages which Investor has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
6. Survival. The indemnity and contribution agreements contained in
this Exhibit shall remain operative and in full force and effect regardless of
(a) any termination of this Agreement or any underwriting agreement, (b) any
investigation made by or on behalf of any Indemnified Person or by or on behalf
of the Company and (c) the consummation of the sale or successive resales of the
Securities.
7. Registration Expenses. In connection with the registration of the
Securities, the Company shall pay the following reasonable expenses incurred in
connection with such registration: (a) registration and filing fees with the
SEC, (b) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Securities), (c) printing expenses, (d) fees and
expenses incurred in connection with the listing of the Securities, (e) fees and
expenses of counsel and independent certified public accountants for the Company
(including the expenses of any comfort letters pursuant to Section
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7(f)), (f) the fees and expenses of any additional experts retained by the
Company in connection with such registration and (g) fees and expenses in
connection with any review of underwriting arrangements by the National
Association of Securities Dealers, Inc., including fees and expenses of any
"qualified independent underwriter". The Investor shall pay any underwriting
fees, discounts or commissions attributable to the sale of Securities and any
out-of-pocket expenses of the Investor, including its counsel fees, accountant
fees and expenses. The Company shall pay internal Company expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties).