EXHIBIT 10.1.3
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WARRANT AGREEMENT
between
▇▇▇▇▇▇▇ HOLDINGS INC.
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Warrant Agent
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Dated as of November 26, 1997
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Warrants to Purchase Common Stock
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TABLE OF CONTENTS
PAGE
CERTAIN DEFINITIONS................................................................................ 2
ORIGINAL ISSUE OF WARRANTS......................................................................... 5
Section 2.1. Form of Warrant Certificates..................................................... 5
Section 2.2. Restrictive Legends.............................................................. 6
Section 2.3. Execution and Delivery of Warrant Certificates................................... 10
Section 2.4. Certificated Warrants............................................................ 10
EXERCISE PRICE CONVERSION OF WARRANTS AND
EXERCISE OF WARRANTS............................................................................... 11
Section 3.1. Exercise Price................................................................... 11
Section 3.2. Exercise; Restrictions on Exercise............................................... 11
Section 3.3. Method of Exercise; Payment of Exercise Price.................................... 11
ADJUSTMENTS........................................................................................ 12
Section 4.1. Adjustments...................................................................... 12
Section 4.2. Notice of Adjustment............................................................. 20
Section 4.3. Statement on Warrants............................................................ 20
Section 4.4. Notice of Consolidation, Merger, Etc............................................. 20
Section 4.5. Fractional Interests............................................................. 21
Section 4.6. When Issuance or Payment May Be Deferred......................................... 21
Section 4.7. Initial Public Offering.......................................................... 21
DECREASE IN EXERCISE PRICE......................................................................... 22
LOSS OR MUTILATION................................................................................. 22
RESERVATION AND AUTHORIZATION
OF COMMON SHARES................................................................................... 23
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER................................................... 23
Section 8.1. Transfer and Exchange............................................................ 23
Section 8.2. Book-Entry Provisions for Global Warrants........................................ 24
Section 8.3. Special Transfer Provisions...................................................... 25
Section 8.4. Surrender of Warrant Certificates................................................ 27
WARRANT HOLDERS.................................................................................... 28
Section 9.1. Warrant Holder Deemed Not a Shareholder.......................................... 28
Section 9.2. Right of Action.................................................................. 28
THE WARRANT AGENT.................................................................................. 28
Section 10.1. Duties and Liabilities.......................................................... 28
Section 10.2. Right to Consult Counsel........................................................ 30
Section 10.3. Compensation; Indemnification................................................... 30
Section 10.4. No Restrictions on Actions...................................................... 30
Section 10.5. Discharge or Removal; Replacement Warrant Agent................................. 31
Section 10.6. Successor Warrant Agent......................................................... 32
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MISCELLANEOUS...................................................................................... 32
Section 11.1. Monies Deposited with the Warrant Agent......................................... 32
Section 11.2. Payment of Taxes................................................................ 32
Section 11.3. No Merger, Consolidation or Sale of Assets of the Company....................... 33
Section 11.4. Reports to Holders.............................................................. 33
Section 11.5. Notices; Payment................................................................ 33
Section 11.6. Binding Effect.................................................................. 35
Section 11.7. Counterparts.................................................................... 35
Section 11.8. Amendments...................................................................... 35
Section 11.9. Headings........................................................................ 35
Section 11.10. Common Shares Legend........................................................... 35
Section 11.11. Third Party Beneficiaries...................................................... 37
Section 11.12. Termination.................................................................... 38
Section 11.13. Governing Law.................................................................. 38
EXHIBIT A FORM OF WARRANT CERTIFICATE
EXHIBIT B-1 FORM OF CERTIFICATE TO BE DELIVERED BY TRANSFEROR IN CONNECTION
WITH TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS
EXHIBIT B-2 FORM OF CERTIFICATE TO BE DELIVERED BY TRANSFEREES IN CONNECTION
WITH TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of November 26, 1997 (this "Agreement"),
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between ▇▇▇▇▇▇▇ HOLDINGS INC., a Delaware corporation (the "Company"), and
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UNITED STATES TRUST COMPANY OF NEW YORK, as warrant agent (the "Warrant Agent").
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the terms of a Purchase Agreement dated November
25, 1997 (the "Purchase Agreement"), among the Company and SBC Warburg Dillon
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Read Inc. ("SBCWDR"), and BT Alex. ▇▇▇▇▇ Incorporated (the "Initial
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Purchasers"), the Company has agreed to issue and sell to the Initial Purchasers
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an aggregate of 100,000 warrants (each, a "Warrant" and collectively, the
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"Warrants"), each Warrant initially entitling the holder thereof to purchase 4
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shares (the "Warrant Shares") of Common Stock (as defined below) of the Company
at an exercise price of $0.10 per Common Share (as defined below) as part of
100,000 units (the "Units"), each Unit consisting of one 13 3/4% Series A
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Cumulative Redeemable Exchangeable Preferred Stock of the Company (each a
"Share" and collectively, the "Shares") issued pursuant to a Certificate of
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Designations, and one Warrant;
WHEREAS, the Shares and the Warrants included in each Unit will become
separately transferable at the close of business (such date, the "Separation
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Date") upon the earliest to occur of (i) the date that is 90 days after the
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Closing Date (as defined below), (ii) such earlier date as may be determined by
the Initial Purchasers, upon written notice thereof to the Company, the Warrant
Agent and the Transfer Agent and Registrar (as defined below) for the Shares,
(iii) in the event of a Change of Control, the date on which the Company mails
notice thereof to holders of Shares, and (iv) the date on which an Exchange
Offer Registration Statement (as defined below) with respect to the Shares is
declared effective; and
WHEREAS, the Company desires to engage the Warrant Agent to act on the
Company's behalf, and the Warrant Agent desires to act on behalf of the Company,
in connection with the issuance of the Warrant Certificates (as defined below)
and the other matters as provided herein; and the Company desires to enter into
this Agreement for the purpose of, among other things, defining the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company and the record holders thereof (together with the holders of
shares of Common Stock (or other securities) received upon exercise thereof, the
"Holders").
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NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements contained herein and in the Purchase Agreement, the Company and the
Warrant Agent hereby agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any executive officer
or director of any such specified Person or other Person. For the purposes of
this definition, "control," when used with respect to any specified Person,
includes the power to vote 10% or more of any class of voting securities of such
Person or to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent Members" has the meaning specified in Section 8.2 hereof.
"Auditors" means, at any time, the independent auditors of the Company
at such time.
"Board" means the board of directors of the Company from time to time.
"Business Day" means a day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the corporate
trust office of the Warrant Agent, are authorized by law to be closed.
"Certificated Warrants" has the meaning specified in Section 2.1
hereof.
"Closing Date" means the date hereof.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the common stock, par value $0.0001 per share, of
the Company.
"Common Shares" means shares of Common Stock.
"Company" has the meaning specified in the preamble to this Agreement.
"Current Market Value" has the meaning specified in Section 4.1(f)
hereof.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Exchange Offer Registration Statement" has the meaning specified in
the Preferred Stock Registration Rights Agreement.
"Exercise Price" has the meaning specified in Section 3.1 hereof.
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"Expiration Date" means 5:00 p.m. (New York City time) on November 30,
2009.
"Global Warrants" has the meaning specified in Section 2.1 hereof.
"Holders" has the meaning specified in the recitals to this Agreement.
"IAI Certificated Warrants" has the meaning specified in Section 2.1
hereof.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is disinterested
and independent with respect to the Company and its Affiliates and, in the
reasonable judgment of the Company's Board, is qualified to perform the task for
which it has been engaged.
"Institutional Accredited Investor" shall mean an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act.
"Non-Global Purchasers" has the meaning specified in Section 2.1
hereof.
"Officer" means, with respect to the Company, the Chairman of the
Board, the Vice-Chairman of the Board, the Chief Executive Officer or any other
executive officer of the Company, the Treasurer or any Assistant Treasurer, or
the Secretary or any Assistant Secretary of the Company.
"Officer's Certificate" means a certificate signed by an Officer.
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Preferred Stock Registration Rights Agreement" means the Registration
Rights Agreement with respect to the Shares dated as of the date hereof among
the Company and the Initial Purchasers.
"Private Placement Legend" means the legend set forth on the Warrant
Certificates in the form set forth in Section 2.2(a) hereof.
"Purchase Agreement" has the meaning specified in the recitals to this
Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Restricted Certificated Warrants" has the meaning specified in
Section 2.1
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hereof.
"Right" has the meaning specified in Section 4.1(c) hereof.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Separation Date" has the meaning specified in the recitals to this
Agreement.
"Shares" has the meaning specified in the recitals to this Agreement.
"Spread" means, with respect to any Warrant, the Current Market Value
of the Common Shares (or other securities) subject to such Warrant, less the
Exercise Price of such Warrant, in each case as adjusted as provided herein.
"Subscription Form" means the form on the reverse side of the Warrant
Certificate substantially in the form of Exhibit A hereto.
"Transfer Agent and Registrar" means the United States Trust Company
of New York, as transfer agent and registrar for the Shares, or any successor
thereto.
"Underlying Securities" shall mean the Common Shares (or other
securities) issuable upon exercise of the Warrants.
"Units" has the meaning specified in the recitals to this Agreement.
"Value Report" has the meaning specified in Section 4.1(k) hereof.
"Valuation Date" means a date which is no more than three days prior
to the date of any Value Report.
"Warrant" has the meaning specified in the recitals to this Agreement.
"Warrant Agent" has the meaning specified in the preamble to this
Agreement.
"Warrant Certificates" has the meaning specified in Section 2.1
hereof.
"Warrant Registration Rights Agreement" means the Warrant Registration
Rights Agreement dated the date hereof between the Company and the Warrant
Agent.
"Warrant Registration Statement" has the meaning specified in the
Warrant Registration Rights Agreement.
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
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Section 2.1. Form of Warrant Certificates. Certificates representing
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the Warrants (the "Warrant Certificates") shall be substantially in the form
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attached hereto as Exhibit A, shall be dated the date on which such Warrant
Certificates are countersigned by the Warrant Agent and shall have such
insertions as are appropriate or required or permitted by this Agreement and may
have such letters, numbers or other marks of identification and such legends and
endorsements stamped, printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation pursuant thereto or with any rule or regulation of any securities
exchange on which the Warrants may be listed, or to conform to usage.
Warrants offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more global Warrant Certificates in definitive,
fully registered form, substantially in the form set forth in Exhibit A (a
"Global Warrant"), deposited with the Warrant Agent, as custodian for, and
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registered in the name of the nominee for, the Depositary, duly executed by the
Company and countersigned by the Warrant Agent as hereinafter provided. The
aggregate number of Warrants represented by a Global Warrant may from time to
time be increased or decreased by adjustments made on the records of the Warrant
Agent, as custodian for the Depositary, or its nominee, as provided in Section
2.4 and Section 8.3 hereof.
Warrants offered and sold to Institutional Accredited Investors who
are not QIBs ("Non-Global Purchasers") shall be issued initially in registered,
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certificated form substantially in the form set forth in Exhibit A ("IAI
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Certificated Warrants").
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Warrants issued pursuant to Sections 2.4 and 8.2(b) in exchange for
interests in a Global Warrant shall be issued in the form of permanent Warrant
Certificates in registered form, substantially in the form set forth in Exhibit
A (the "Restricted Certificated Warrants" and, together with IAI Certificated
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Warrants, the " Certificated Warrants").
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The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Warrants may be listed, all as determined by the Officer
executing such Warrant Certificates, as evidenced by the execution of such
Warrant Certificates.
Section 2.2. Restrictive Legends. (a) The Warrant Certificates shall
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bear the following legend on the face thereof:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
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SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT, WITHIN
THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT
AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE WARRANT AGENT) AND IF SUCH TRANSFER IS IN
RESPECT OF SECURITIES HAVING A PURCHASE PRICE OF LESS THAN $100,000,
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT, (c) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS) BUT ONLY IN THE CASE OF A TRANSFER THAT IS
EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE SECURITIES
REGISTERED IN ITS NAME (OR ITS NOMINEE'S NAME) IN THE BOOKS MAINTAINED
BY THE REGISTRAR, AND SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE
EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE WARRANT AGENT. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
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WARRANT AGENT AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. IN ADDITION, THE HOLDER OF THIS SECURITY UNDERSTANDS
THAT THIS SECURITY MAY NOT BE SOLD OR TRANSFERRED TO, AND SUCH HOLDER
SHALL BE DEEMED TO HAVE REPRESENTED AND COVENANTED THAT IT IS NOT
ACQUIRING THIS SECURITY FOR OR ON BEHALF OF, AND WILL NOT TRANSFER
THIS SECURITY TO, ANY PERSON OTHER THAN (I) AN INDIVIDUAL CITIZEN OR
RESIDENT OF THE UNITED STATES FOR U.S. FEDERAL INCOME TAX PURPOSES,
(II) A CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED
IN OR UNDER THE LAWS OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION
THEREOF, (III) AN ESTATE THE INCOME OF WHICH IS SUBJECT TO UNITED
STATES FEDERAL INCOME TAX REGARDLESS OF THE SOURCE, (IV) A TRUST WHOSE
ADMINISTRATION IS SUBJECT TO THE PRIMARY SUPERVISION OF A UNITED
STATES COURT AND WHICH HAS ONE OR MORE UNITED STATES PERSONS WHO HAVE
THE AUTHORITY TO CONTROL ALL SUBSTANTIAL DECISIONS OF THE TRUST, OR
(V) ANY OTHER PERSON WHOSE INCOME OR GAIN IN RESPECT OF THIS SECURITY
IS EFFECTIVELY CONNECTED WITH THE CONDUCT OF A UNITED STATES TRADE OR
BUSINESS (OR, IF APPLICABLE, ATTRIBUTABLE TO A PERMANENT ESTABLISHMENT
SITUATED IN THE UNITED STATES) WHO DELIVERS APPROPRIATE DOCUMENTATION
TO THE ISSUER OF THIS SECURITY.
(b) Each Global Warrant shall also bear the following legend on the
face thereof:
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR THE
WARRANT AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE
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DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE VIII OF THE WARRANT AGREEMENT.
(c) Each Warrant Certificate issued prior to the Separation Date
shall bear the following legend on the face thereof and, on the Separation Date,
a new Warrant Certificate without the following legend shall be executed by the
Company, countersigned by the Warrant Agent and issued by the Company in
exchange for such Warrant Certificate:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS
PART OF AN ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF ONE SHARE OF
13 3/4% SERIES A CUMULATIVE REDEEMABLE EXCHANGEABLE PREFERRED STOCK OF
THE COMPANY (THE "SHARES") AND ONE WARRANT INITIALLY ENTITLING THE
HOLDER THEREOF TO PURCHASE [__________] SHARES OF COMMON STOCK, PAR
VALUE $0.0001 PER SHARE, OF THE COMPANY. PRIOR TO THE CLOSE OF
BUSINESS UPON THE EARLIEST TO OCCUR OF (i) 90 DAYS AFTER NOVEMBER 26,
1997, (ii) SUCH EARLIER DATE AS MAY BE DETERMINED BY THE INITIAL
PURCHASERS (AS DEFINED IN THE WARRANT AGREEMENT), UPON WRITTEN NOTICE
THEREOF TO THE COMPANY, THE WARRANT AGENT AND TRANSFER AGENT AND
REGISTRAR FOR THE SHARES, (iii) IN THE EVENT OF A CHANGE OF CONTROL,
THE DATE ON WHICH THE COMPANY MAILS NOTICE OF THEREOF TO THE HOLDERS
OF SHARES, AND (iv) THE DATE ON WHICH THE EXCHANGE OFFER REGISTRATION
STATEMENT (AS DEFINED IN THE WARRANT AGREEMENT) WITH RESPECT TO THE
SHARES IS DECLARED EFFECTIVE, THE WARRANTS EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT
MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE SHARES.
UNIT CUSIP NO. ________________________________
Section 2.3. Execution and Delivery of Warrant Certificates. Warrant
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Certificates evidencing 100,000 Warrants may be executed, on or after the date
of this Agreement, by the Company and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign and deliver
such Warrant Certificates upon the order and at the written direction of the
Company signed by its Chief Executive Officer or other duly authorized executive
officer to the purchasers thereof on the date of issuance. The Warrant Agent is
hereby authorized to countersign and deliver Warrant Certificates as required by
this Section 2.3 or by Section 3.3, Article VI or Article VIII hereof.
The Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Vice-Chairman of the Board, Chief Executive Officer
or other duly authorized executive officer of the Company either manually or by
facsimile signature printed thereon. The Warrant Certificates shall be
countersigned by manual or facsimile signature of
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the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer or director of the Company whose signature
shall have been placed upon any of the Warrant Certificates shall cease to be
such officer or director of the Company before countersignature by the Warrant
Agent and the issuance and delivery thereof, such Warrant Certificates may
nevertheless be countersigned by the Warrant Agent and issued and delivered with
the same force and effect as though such person had not ceased to be such
officer or director of the Company.
Section 2.4. Certificated Warrants. Beneficial owners of interests
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in a Global Warrant may receive Certificated Warrants (which, except as set
forth in Section 8.3(c), shall bear the Private Placement Legend) in accordance
with the procedures of the Warrant Agent and the Depositary. In connection with
the execution and delivery of such Certificated Warrants, the Warrant Agent
shall reflect on its books and records a decrease in the number of Warrants
represented by the relevant Global Warrant equal to the number of such
Certificated Warrants and the Company shall execute, and the Warrant Agent shall
countersign and deliver to said beneficial owners, one or more Certificated
Warrants in an equal aggregate number.
ARTICLE III
EXERCISE PRICE CONVERSION OF WARRANTS AND
EXERCISE OF WARRANTS
Section 3.1. Exercise Price. Each Warrant Certificate shall, when
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countersigned by the Warrant Agent, initially entitle the Holder thereof,
subject to the provisions of this Agreement, to purchase the number of Common
Shares indicated thereon at a purchase price (the "Exercise Price") of $___ per
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Common Share, subject to adjustment as provided in Section 4.1 and Article V
hereof.
Section 3.2. Exercise; Restrictions on Exercise. At any time on or
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after the first anniversary the Closing Date and on or before the Expiration
Date, outstanding Warrants may be exercised on any Business Day by the Holders
thereof; provided, that the Warrant Registration Statement is, at the time of
exercise, effective and available for the exercise of the Warrants or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act, and the Warrant Shares are qualified for sale or exempt from
qualification under the applicable securities laws of the states or other
jurisdictions in which the various Holders reside. Any Warrants not exercised
by the Expiration Date shall expire and all rights of the Holders of such
Warrants shall terminate.
Section 3.3. Method of Exercise; Payment of Exercise Price. (a) In
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order to exercise all or any of the Warrants represented by a Warrant
Certificate, the Holder thereof must surrender for exercise the Warrant
Certificate to the Warrant Agent at its corporate trust office address set forth
in Section 11.5 hereof, with the Subscription Form set forth on the reverse of
the Warrant Certificate duly executed, together with payment in full of the
Exercise Price then in effect for each Common Share or other securities (or a
fraction thereof) issuable upon exercise of the Warrants as to which a Warrant
is exercised; such payment may be made by wire transfer in immediately available
funds or by certified or official bank or bank cashier's check payable to the
order of the Company and shall be made to the Warrant Agent
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at its corporate trust office address set forth in Section 11.5 hereof prior to
the close of business on the date the Warrant Certificate is surrendered to the
Warrant Agent for exercise. Notwithstanding the foregoing, the Exercise Price
may be paid by surrendering additional Warrants to the Warrant Agent having an
aggregate Spread equal to the aggregate Exercise Price of the Warrants being
exercised. All payments received upon exercise of Warrants shall be delivered to
the Company by the Warrant Agent as instructed in writing by the Company. If
less than all the Warrants represented by a Warrant Certificate are exercised,
such Warrant Certificate shall be surrendered and a new Warrant Certificate of
the same tenor and for the number of Warrants which were not exercised shall be
executed by the Company and delivered to the Warrant Agent and the Warrant Agent
shall countersign the new Warrant Certificate, registered in such name or names
as may be directed in writing by the Holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same. Upon the
exercise of any Warrants following the surrender of a Warrant Certificate in
conformity with the foregoing provisions, the Warrant Agent shall instruct the
Company to transfer promptly to the Holder or, upon the written order of the
Holder of such Warrant Certificate, appropriate evidence of ownership of any
Common Shares, dated the date of such exercise, or other security or property to
which it is entitled as a result of such exercise, registered or otherwise
placed in such name or names as may be directed in writing by the Holder, and to
deliver such evidence of ownership to the Person or Persons entitled to receive
the same and fractional shares, if any, or an amount in cash, in lieu of any
fractional shares, as provided in Section 4.5 hereof; provided that the Holder
of such Warrant shall be responsible for the payment of any transfer taxes
required as the result of any change in ownership of such Warrants or the
issuance of such Common Shares other than to the Holder of such Warrants. Upon
the exercise of a Warrant or Warrants, the Warrant Agent is hereby authorized
and directed to requisition from any transfer agent of the Common Shares (and
all such transfer agents are hereby irrevocably authorized to comply with all
such requests) certificates (bearing the legend set forth in Section 11.10
hereof, if applicable, unless the Warrant Registration Statement relating to
such Common Shares shall then be in effect or the Company and the Holder
exercising such Warrant or Warrants otherwise agree) for the necessary number of
Common Shares to which said Holder may be entitled. The Company shall enter, or
shall cause any transfer agent of the Common Shares to enter, the name of the
Person entitled to receive the Common Shares upon exercise of the Warrants into
the Company's register of stockholders within 14 days of such exercise. A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of the surrender for exercise, as provided above, of the
Warrant Certificate representing such Warrant and, for all purposes under this
Agreement, the Person entitled to receive any Common Shares deliverable upon
such exercise shall, as between such Person and the Company, be deemed to be the
Holder of such Common Shares of record as of the close of business on such date
and shall be entitled to receive, and the Warrant Agent shall deliver to such
Person, any Common Shares to which such Person is entitled.
11
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments. The Exercise Price and the number of
----------- -----------
Common Shares issuable upon exercise of each Warrant shall be subject to
adjustment from time to time as follows:
(a) Divisions; Consolidations; Reclassifications. In case the Company
--------------------------------------------
shall, on or before the Expiration Date, (i) issue any Common Shares in payment
of a dividend or other distribution with respect to its Common Shares, (ii)
subdivide its issued and outstanding Common Shares, (iii) consolidate its issued
and outstanding Common Shares into a smaller number of shares, or (iv)
reclassify or convert the Common Shares (other than a reclassification in
connection with a merger, consolidation or other business combination which will
be governed by Section 4.1(j)), then the number of Common Shares purchasable
upon exercise of each Warrant immediately prior to the record date for such
issue or distribution or the effective date of such subdivision, consolidation,
reclassification or conversion shall be adjusted so that the Holder of each
Warrant shall thereafter be entitled to receive the kind and number of Common
Shares which such Holder would have been entitled to receive after the happening
of any of the events described above had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this Section 4.1(a) shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(b) Rights; Options; Warrants. In case the Company shall issue
-------------------------
rights, options, warrants or convertible or exchangeable securities (other than
an issuance of convertible or exchangeable securities subject to Section 4.1(a))
to all holders of its Common Shares, entitling them to subscribe for or purchase
Common Shares at a price per share which is lower (at the record date for such
issuance) than the then Current Market Value per Common Share, then the Company
shall ensure that at the time of such issuance, the same or a like offer or
invitation is made to the Holders of the Warrants as if their Warrants had been
exercised on the day immediately preceding the record date of such offer or
invitation on the terms (subject to any adjustment pursuant to Section 4.1(a)
for a prior event) on which such Warrants could have been exercised on such
date; provided that if the Board so resolves, the Company shall not be required
to ensure that the same offer or invitation is made to the Holders of the
Warrants, but the number of Common Shares thereafter purchasable upon the
exercise of each Warrant shall instead be adjusted and shall be determined by
multiplying the number of Common Shares theretofore purchasable upon exercise of
each Warrant by a fraction, the numerator of which shall be the sum of (i) the
number of Common Shares outstanding immediately prior to the issuance of such
rights, options, warrants or convertible or exchangeable securities plus (ii)
the number of additional Common Shares which may be purchased or subscribed for
upon exercise, exchange or conversion of such rights, options, warrants or
convertible or exchangeable securities, and the denominator of which shall be
the sum of (x) the number of Common Shares outstanding immediately prior to the
issuance of such rights, options, warrants or convertible or exchangeable
securities plus (y) the number of shares which the total consideration received
by the Company for such rights, options, warrants or convertible or exchangeable
securities so offered would purchase at the then Current Market Value per Common
Share. Except as otherwise provided above, such
12
adjustment shall be made whenever such rights, options, warrants or convertible
or exchangeable securities are issued, and shall become effective retroactively
immediately after the record date for the determination of shareholders entitled
to receive such rights, options, warrants or convertible or exchangeable
securities.
(c) Issuance of Common Shares at Lower Values. In case the Company
-----------------------------------------
shall issue and sell any Common Share or Right (as defined below) (excluding (i)
any Right issued in any of the transactions described in Section 4.1(a) or (b)
above, (ii) Common Shares issued pursuant to (x) any Rights outstanding on the
date of this Agreement and (y) a Right, if on the date such Right was issued,
the exercise, conversion or exchange price per Common Share with respect thereto
was at least equal to the then Current Market Value per Common Share and (iii)
any Common Shares or Right issued as consideration when any corporation or
business is acquired, merged into or becomes part of the Company or a subsidiary
of the Company in an arm's-length transaction between the Company and a Person
other than an Affiliate of the Company) at a price per Common Share (determined
in the case of any such Right, by dividing (x) the total consideration
receivable by the Company in consideration of the sale and issuance of such
Right, plus the total consideration payable to the Company upon exercise,
conversion or exchange thereof, by (y) the total number of Common Shares covered
by such Right) that is lower than the Current Market Value per Common Share in
effect immediately prior to such sale or issuance, then the number of Common
Shares thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Common Shares theretofore purchasable
upon exercise of such Warrant by a fraction, the numerator of which shall be the
number of Common Shares outstanding immediately after such sale or issuance and
the denominator of which shall be the number of Common Shares outstanding
immediately prior to such sale or issuance plus the number of Common Shares
which the aggregate consideration received (determined as provided below) for
such sale or issuance would purchase at such Current Market Value per Common
Share. For purposes of this Section 4.1(c), the Common Shares which the holder
of any such Right shall be entitled to subscribe for or purchase shall be deemed
to be issued and outstanding as of the date of such sale and issuance and the
consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such Right, plus the consideration or
premiums stated in such Right to be paid for the Common Shares covered thereby.
In case the Company shall sell and issue any Right together with one or more
other securities as part of a unit at a price per unit, then in determining the
"price per Common Share" and the "consideration received by the Company" for
purposes of the first sentence of this Section 4.1(c), the Board shall
determine, in good faith, the fair value of the Right then being sold as part of
such unit. For purposes of this paragraph, a "Right" shall mean any right,
-----
option, warrant or convertible or exchangeable security containing the Right to
subscribe for or acquire one or more Common Shares, excluding the Warrants.
This Section 4.1(c) shall not apply to: (i) the exercise of Warrants, or the
conversion or exchange of other securities convertible or exchangeable for
Common Shares; or (ii) issuance of Rights issued to all holders of Common Shares
or Common Shares issued upon exercise of such Rights;
(d) Distributions of Debt, Assets, Subscription Rights or Convertible
-----------------------------------------------------------------
Securities. In case the Company shall make a distribution to all holders of its
----------
Common Shares of evidences of its indebtedness, or assets, or other
distributions (excluding any issuance of Common Shares referred to in Section
4.1(a) above and excluding distributions in connection with the dissolution,
liquidation or winding-up of the Company which shall be governed by Section
4.1(j) and distributions of securities referred to in Section 4.1(a), Section
4.1(b) or
13
Section 4.1(c)), then, in each case, the number of Common Shares purchasable
after such record date upon the exercise of each Warrant shall be determined by
multiplying the number of Common Shares purchasable upon the exercise of such
Warrant immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Value per Common Share immediately prior to
the record date for such distribution and the denominator of which shall be the
Current Market Value per Common Share immediately prior to the record date for
such distribution less the then fair value (as determined in good faith by the
Board) of the evidences of its indebtedness, assets or other distributions so
distributed attributable to one Common Share. Such adjustment shall be made
whenever any such distribution is made, and shall become effective on the date
of distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(e) Expiration of Rights, Options and Conversion Privileges. Upon the
-------------------------------------------------------
expiration of any rights, options, warrants or conversion or exchange privileges
that have previously resulted in an adjustment hereunder, if any thereof shall
not have been exercised, exchanged or converted, the Exercise Price and the
number of Common Shares issuable upon the exercise of each Warrant shall, upon
such expiration, be readjusted and shall thereafter, upon any future exercise,
be such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
Common Shares so issued were the Common Shares, if any, actually issued or sold
upon the exercise, exchange or conversion of such rights, options, warrants or
conversion or exchange rights and (ii) such Common Shares, if any, were issued
or sold for the consideration actually received by the Company upon such
exercise, exchange or conversion, plus the consideration, if any, actually
received by the Company for issuance, sale or grant of all such rights, options,
warrants or conversion or exchange rights whether or not exercised.
(f) Current Market Value. For the purposes of any computation under
--------------------
this Article IV, the "Current Market Value" per Common Share or of any other
--------------------
security (herein collectively referred to as a "security") at any date herein
specified shall be:
(i) if the security is not registered under the Exchange Act, the
value of the security (1) most recently determined as of a date within the
six months preceding such date by an Independent Financial Advisor selected
by the Company in accordance with the criteria for such valuation set out
in Section 4.1(k), or (2) if no such determination shall have been made
within such six-month period or if the Company so chooses, determined as of
such a date by an Independent Financial Advisor selected by the Company in
accordance with the criteria for such valuation set out in Section 4.1(k),
or
(ii) if the security is registered under the Exchange Act, the average
of the daily market prices of the security for the 20 consecutive trading
days immediately preceding such date or, if the security has been
registered under the Exchange Act for less than 20 consecutive trading days
before such date, then the average of the daily market prices for all of
the trading days before such date for which daily market prices are
available. The market price for each such trading day shall be: (A) in
the case of a security listed or admitted to trading on any national
securities exchange, the closing sales price, regular way, on such day, or
if no sale takes place on such day, the average of the closing bid and
asked price on such day on the principal national securities exchange on
which such security is listed or admitted, as determined by the Board, in
good faith, (B) in the case of a security not then listed or admitted to
trading
14
on any national securities exchange, the last reported sale price on such
day, or if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reputable quotation source
designated by the Company, (C) in the case of a security not then listed or
admitted to trading on any national securities exchange and as to which no
such reported sale price or bid and asked prices are available, the average
of the reported high bid and low asked prices on such day, as reported by a
reputable quotation service, or a newspaper of general circulation in the
Borough of Manhattan, City and State of New York customarily published on
each Business Day, designated by the Company, or, if there shall be no bid
and asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than 30 days prior
to the date in question) for which prices have been so reported and (D) if
there are no bid and asked prices reported during the 30 days prior to the
date in question, the Current Market Value of the security shall be
determined as if the security were not registered under the Exchange Act.
(g) Consideration Received. For purposes of any computation
----------------------
respecting consideration received pursuant to this Section 4.1, the following
shall apply:
(i) in the case of the issuance of Common Shares for cash, the
consideration shall be the amount of such cash, provided that in no case
shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
(ii) in the case of the issuance of Common Shares for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined
in good faith by the Board (irrespective of the accounting treatment
thereof), whose determination shall be conclusive and described in
reasonable detail in a board resolution which shall be provided as soon as
practicable thereafter to the Holders; and
(iii) in the case of the issuance of rights, options, warrants or
securities convertible into or exchangeable for Common Shares, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such rights,
options, warrants or securities convertible into or exchangeable for Common
Shares plus the additional minimum consideration, if any, to be received by
the Company upon the exercise, conversion or exchange thereof (the
consideration in each case to be determined in the same manner as provided
in clauses (i) and (ii) of this Section 4.1(g)).
(h) De Minimis Adjustments. No adjustment in the number of Common
----------------------
Shares purchasable hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the number of
Common Shares purchasable upon the exercise of each Warrant; provided, however,
that any adjustments which by reason of this Section 4.1(h) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-thousandth of a
share.
(i) Adjustment of Exercise Price. Whenever the number of Common
----------------------------
15
Shares purchasable upon the exercise of each Warrant is adjusted, as herein
provided, the Exercise Price per Common Share payable upon exercise of such
Warrant shall be adjusted (calculated to the nearest $.01) so that it shall
equal the price determined by multiplying such Exercise Price immediately prior
to such adjustment by a fraction the numerator of which shall be the number of
Common Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment and the denominator of which shall be the number of Common
Shares so purchasable immediately thereafter. Following any adjustment to the
Exercise Price pursuant to this Article IV, the amount payable, when adjusted,
shall never be less than the par value per Common Share at the time of such
adjustment.
If after an adjustment, a Holder of a Warrant upon exercise of it may
receive shares of two or more classes in the capital of the Company, the Company
shall determine the allocation of the adjusted Exercise Price between such
classes of shares in a manner that the Board deems fair and equitable to the
Holders. After such allocation, the exercise privilege and the Exercise Price
of each class of shares shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Shares in this Article IV.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(j) Consolidation, Merger, Etc. (i) Subject to the provisions of
--------------------------
Subsection (ii) below of this Section 4.1(j), in case of the consolidation of
the Company with, or merger of the Company with or into, or of the sale of all
or substantially all of the properties and assets of the Company to, any Person,
and in connection therewith consideration is payable to holders of Common Shares
in exchange therefor, the Warrants shall remain subject to the terms and
conditions set forth in this Agreement and each Warrant shall, after such
consolidation, merger or sale, entitle the Holder to receive upon exercise
thereof the number of shares in the capital stock or other securities or
property (including cash) of or from the Person resulting from such
consolidation or surviving such merger or to which such sale shall be made or of
the parent of such Person, as the case may be, that would have been
distributable or payable on account of the Common Shares if such Holder's
Warrants had been exercised immediately prior to such merger, consolidation or
sale (or, if applicable, the record date therefor); and in any such case the
provisions of this Agreement with respect to the rights and interests thereafter
of the Holders of Warrants shall be appropriately adjusted by the Board in good
faith so as to be applicable, as nearly as may reasonably be, to any shares,
other securities or any property thereafter deliverable on the exercise of the
Warrants.
(ii) Notwithstanding the foregoing, (x) if the Company merges or
consolidates with, or sells all or substantially all of its property and
assets to, another Person (other than an Affiliate of the Company) and
consideration is payable to holders of Common Shares in exchange for their
Common Shares in connection with such merger, consolidation or sale which
consists solely of cash, or (y) in the event of the dissolution,
liquidation or winding up of the Company, then the Holders of Warrants
shall be entitled to receive distributions on the date of such event on an
equal basis with holders of Common Shares (or other securities issuable
upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event, less the Exercise Price. Upon receipt of
such payment, if any, the rights of a Holder shall terminate and cease and
such Holder's Warrants shall expire. In case of any such merger,
consolidation or sale of assets, the surviving or acquiring Person and, in
the
16
event of any dissolution, liquidation or winding up of the Company, the
Company shall deposit promptly with the Warrant Agent the funds, if any,
necessary to pay the Holders of the Warrants. After receipt of such
deposit from such Person or the Company and after receipt of surrendered
Warrant Certificates, the Warrant Agent shall make payment by delivering a
check in such amount as is appropriate (or, in the case of consideration
other than cash, such other consideration as is appropriate) to such Person
or Persons as it may be directed in writing by the Holder surrendering such
Warrants.
(k) If required pursuant to Section 4.1(f)(i), the Current Market
Value shall be deemed to be equal to the value set forth in the Value Report (as
defined below) as determined by an Independent Financial Advisor, which shall be
selected by the Board in its sole discretion, and retained on customary terms
and conditions, using one or more valuation methods that the Independent
Financial Advisor, in its best professional judgment, determines to be most
appropriate. The Company shall cause the Independent Financial Advisor to
deliver to the Company, with a copy to the Warrant Agent, within 45 days of the
appointment of the Independent Financial Advisor, a value report (the "Value
-----
Report") stating the value of the Common Shares (or other securities issuable
------
upon exercise of the Warrants) and other securities or property of the Company,
if any, being valued as of the Valuation Date and containing a brief statement
as to the nature and scope of the examination or investigation upon which the
determination of value was made. The Warrant Agent shall have no duty with
respect to the Value Report of any Independent Financial Advisor, except to keep
it on file and available for inspection by the Holders. The determination as to
Current Market Value in accordance with the provisions of this Section 4.1(k)
shall be conclusive on all Persons. The Independent Financial Advisor shall
consult with management of the Company in order to allow management to comment
on the proposed value prior to delivery to the Company of any Value Report.
(l) When No Adjustment Required. No adjustment need be made for:
---------------------------
(i) issuance of Common Shares upon exercise of Rights existing on
the Closing Date;
(ii) issuance to employees, officers, directors or consultants of
the Company or any of its subsidiaries of options to purchase
Common Shares at an exercise price of $________________ per
share (such exercise price to increase from the Closing Date to
the date of issuance at a rate of 9.0% per annum), up to an
aggregate of 12.5% of the Common Shares calculated on a fully
diluted basis;
(iii) rights to purchase Common Shares pursuant to a Company plan for
reinvestment of dividends or interest; and
(iv) a change in the par value of the Common Shares (including a
change from par value to no par value or vice versa).
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
17
(m) Adjustment for Tax Purposes. The Company may make such changes
---------------------------
to increase the number of Common Shares purchaseable upon the exercise of each
Warrant, in addition to those otherwise required by this Section 4.1, as it
considers to be advisable in order that any event treated for federal income tax
purposes as a dividend of stock or stock rights shall not be taxable to the
recipients.
Section 4.2. Notice of Adjustment. Whenever the number of Common
----------- --------------------
Shares purchasable upon the exercise of each Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall cause, so far as it is able, the
Warrant Agent promptly to mail, at the expense of the Company, to each Holder
notice of such adjustment or adjustments and shall deliver to the Warrant Agent
a certificate of the Auditors setting forth the number of Common Shares
purchasable upon the exercise of each Warrant and the Exercise Price after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
Such certificate shall be conclusive evidence of the correctness of such
adjustment except in the case of manifest error. The Warrant Agent shall be
entitled to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the same,
from time to time, to any Holder desiring an inspection thereof during
reasonable business hours upon reasonable notice. The Warrant Agent shall not
at any time be under any duty or responsibility to any Holders to determine
whether any facts exist which may require any adjustment of the Exercise Price
or the number of Common Shares purchasable on exercise of the Warrants or any of
the other adjustments set forth in Section 4.1, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment, or the validity or value (or the kind or amount) of
any Common Shares which may be purchasable on exercise of the Warrants. The
Warrant Agent shall not be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any Common Shares or share
certificates upon the exercise of any Warrant.
Section 4.3. Statement on Warrants. Irrespective of any adjustment
----------- ---------------------
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 4.4. Notice of Consolidation, Merger, Etc. In case at any
----------- -------------------------------------
time after the date hereof and prior to the Expiration Date, there shall be any
(i) consolidation or merger involving the Company or sale, transfer or other
disposition of all or substantially all of the Company's property, assets or
business (except a merger or other reorganization in which the Company shall be
the surviving corporation and holders of Common Shares receive no consideration
in respect of their shares) or (ii) any other transaction contemplated by
Section 4.1(j)(ii) above then, in any one or more of such cases, the Company
shall cause to be mailed to the Warrant Agent and shall cause the Warrant Agent
to mail, at the Company's expense, to each Holder of a Warrant, at the earliest
practicable time (and, in any event, not less than 20 days before any date set
for definitive action (so long as the Company is aware of such action at such
time)), notice of the date on which such reorganization, sale, consolidation,
merger, dissolution, liquidation or winding up shall take place, as the case may
be. Such notice shall also set forth such facts as shall indicate the effect of
such action (to the extent such effect may be known at the date of such notice)
on the Exercise Price and the kind and amount of the Common Shares and other
securities, money and other property deliverable upon exercise of the Warrants.
Such notice shall also specify the date as of which the holders of record of the
18
Common Shares or other securities or property issuable upon exercise of the
Warrants shall be entitled to exchange their shares for securities, money or
other property deliverable upon such reorganization, sale, consolidation,
merger, dissolution, liquidation or winding up, as the case may be.
Section 4.5. Fractional Interests. If more than one Warrant shall be
----------- --------------------
presented for exercise in full at the same time by the same Holder, the number
of full Common Shares which shall be issuable upon such exercise thereof shall
be computed on the basis of the aggregate number of Common Shares purchasable on
exercise of the Warrants so presented. The Company shall not be required to
issue fractional Common Shares upon the exercise of Warrants. If any fraction
of a Common Share would, except for the provisions of this Section 4.5, be
issuable on the exercise of any Warrant (or specified portion thereof), the
Company may pay an amount in cash calculated by it to be equal to the then
Current Market Value per Common Share multiplied by such fraction computed to
the nearest whole cent.
Section 4.6. When Issuance or Payment May Be Deferred. In any case
----------- ----------------------------------------
in which this Article IV shall require that an adjustment in the Exercise Price
be made effective as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event (i) issuing to the holder of
any Warrant exercised after such record date the Common Shares and other shares
in the capital of the Company, if any, issuable upon such exercise over and
above the Common Shares and other shares in the capital of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price and (ii) paying
such holder any amount in cash in lieu of a fractional share; provided, however,
that the Company shall deliver to such Holder a due ▇▇▇▇ or other appropriate
instrument evidencing such Holder's right to receive such additional Common
Shares, other shares and cash upon the occurrence of the event requiring such
adjustment.
Section 4.7. Initial Public Offering. Notwithstanding anything to
----------- -----------------------
the contrary herein contained, if the Company, ▇▇▇▇▇▇▇ Fasteners Inc.
(subsequent to the merger of ▇▇▇▇▇▇▇ Acquisition Inc. with and into ▇▇▇▇▇▇▇
Fasteners Inc.) or any entity which owns, directly or indirectly, a majority of
the capital stock of ▇▇▇▇▇▇▇ Fasteners Inc. conducts, in the case of the
Company, any initial public offering of equity securities (other than Common
Shares) and, in the case of ▇▇▇▇▇▇▇ Fasteners Inc. or any entity which owns,
directly or indirectly, a majority of the capital stock of ▇▇▇▇▇▇▇ Fasteners
Inc., any initial public offering of equity securities, in each case regardless
of whether such offering consists of the issuance of new shares or the sale of
outstanding shares, the Company will give the Holders the opportunity to convert
such Warrants into warrants to purchase such equity securities and such Warrant
Shares or such other securities that have been received by the Holders upon the
exercise of Warrants into such equity securities. Such conversion opportunity
will be on terms and conditions determined to be fair and reasonable by the
Company's Board of Directors.
ARTICLE V
DECREASE IN EXERCISE PRICE
The Board, in its sole discretion, shall have the right at any time,
or from time to time, to decrease the Exercise Price of the Warrants and/or
increase the number of shares issuable upon the exercise of the Warrants.
19
ARTICLE VI
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity or bond satisfactory to
them and (in the case of mutilation) upon surrender and cancellation thereof,
then, in the absence of notice to the Company or the Warrant Agent that the
Warrants represented thereby have been acquired by a bona fide purchaser, the
Company shall execute and the Warrant Agent shall countersign and deliver to the
registered Holder of the lost, stolen, destroyed or mutilated Warrant
Certificate, in exchange for or in lieu thereof, a new Warrant Certificate of
the same tenor and for a like aggregate number of Warrants. Upon the issuance
of any new Warrant Certificate under this Article VI, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and other expenses (including the fees
and expenses of the Warrant Agent) in connection therewith. Every new Warrant
Certificate executed and delivered pursuant to this Article VI in lieu of any
lost, stolen or destroyed Warrant Certificate shall constitute a contractual
obligation of the Company whether or not the allegedly lost, stolen or destroyed
Warrant Certificates shall be at any time enforceable by anyone and shall be
entitled to the benefits of this Agreement equally and proportionately with any
and all other Warrant Certificates duly executed and delivered hereunder. The
provisions of this Article VI are exclusive and shall preclude (to the extent
lawful) all other rights or remedies with respect to the replacement of
mutilated, lost, stolen, or destroyed Warrant Certificates.
ARTICLE VII
RESERVATION AND AUTHORIZATION
OF COMMON SHARES
The Company shall at all times reserve and keep available such number
of its authorized but unissued Common Shares deliverable upon exercise of
Warrants as will be sufficient to permit the exercise in full of all outstanding
Warrants and will cause appropriate evidence of ownership of such Common Shares
to be delivered to the Warrant Agent upon its request for delivery thereof upon
the exercise of Warrants. The Company covenants that all Common Shares of the
Company that may be issued upon the exercise of the Warrants will, upon
issuance, be duly authorized, validly issued, fully paid and not subject to any
calls for funds and free from pre-emptive rights and all taxes, liens, charges
and security interests with respect to the issue thereof.
20
ARTICLE VIII
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 8.1. Transfer and Exchange. The Warrant Certificates shall
----------- ---------------------
be issued in registered form only. The Warrant Agent shall keep at its office a
register for the registration of Warrant Certificates and transfers or exchanges
of Warrant Certificates as herein provided and other appropriate data as
determined by the Warrant Agent. The Company shall, upon reasonable notice to
the Warrant Agent, have access to such register during the Warrant Agent's
regular business hours. All Warrant Certificates issued upon any registration
of transfer or exchange of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations, and entitled to the same
benefits under this Agreement, as the Warrant Certificates surrendered for such
registration of transfer or exchange.
The Warrants shall initially be issued as part of the issuance of the
Units. Prior to the Separation Date, the Warrants may not be transferred or
exchanged separately from, but may be transferred or exchanged only together
with, the Shares issued as part of such Units.
A Holder may transfer its Warrants only by written application to the
Warrant Agent stating the name of the proposed transferee and otherwise
complying with the terms of this Agreement. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Warrant Agent in the
register. Prior to the registration of any transfer of Warrants by a Holder as
provided herein, the Company, the Warrant Agent, and any agent of the Company
may treat the person in whose name the Warrants are registered as the owner
thereof for all purposes and as the person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding. Furthermore,
any holder of a Global Warrant shall, by acceptance of such Global Warrant,
agree that transfers of beneficial interests in such Global Warrant may be
effected only through a book-entry system maintained by the holder of such
Global Warrant (or its agent), and that ownership of a beneficial interest in
the Warrants represented thereby shall be required to be reflected in a book-
entry. When Warrant Certificates are presented to the Warrant Agent with a
request to register the transfer or to exchange them for an equal amount of
Warrants of other authorized denominations, the Warrant Agent shall register
such transfer or make such exchange as requested if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Company shall execute Warrant Certificates at the Warrant Agent's request. No
service charge shall be made for any registration of transfer or exchange of
Warrants, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer of Warrants.
Section 8.2. Book-Entry Provisions for Global Warrants. (a) Global
----------- -----------------------------------------
Warrants initially shall (i) be registered in the name of the Depositary for
such Global Warrant or the nominee of such Depositary, (ii) be delivered to the
Warrant Agent as custodian for such Depositary and (iii) bear legends as set
forth in Section 2.2 hereof.
Members of, or participants in, the Depositary ("Agent Members") shall
-------------
have no rights under this Agreement with respect to a Global Warrant held on
their behalf by the
21
Depositary or the Warrant Agent as its custodian, and the Depositary may be
treated by the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent as the absolute owner of such Global Warrant for all purposes
whatsoever. Nothing herein shall prevent the Company, the Warrant Agent or any
agent of the Company or the Warrant Agent, from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Warrants.
(b) Transfers of a Global Warrant shall be limited to transfers of
such Global Warrant in whole, but not in part, to the Depositary, its successors
or their respective nominees. Interests of beneficial owners in a Global
Warrant may be transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 8.3 hereof. Certificated Warrants
shall be transferred to beneficial owners in exchange for their beneficial
interests in a Global Warrant if the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for any such Global Warrant and a
successor depositary is not appointed by the Company within 90 days of such
notice, (ii) upon the request of the beneficial owner in accordance with the
rules and procedures of the Depositary and the provisions of Section 8.3 hereof
or (iii) upon notice from the Company to the Transfer Agent and Registrar in
writing requesting the issuance of Certificated Warrants in exchange for a
Global Warrant.
In connection with the transfer of an entire Global Warrant to
beneficial owners pursuant to clauses (b)(i) and (b) (iii) of this Section 8.2,
such Global Warrant shall be surrendered to the Warrant Agent for cancellation,
and the Company shall execute, and the Warrant Agent shall countersign and
deliver, to each beneficial owner identified by the Depositary in exchange for
its beneficial interest in such Global Warrant, Certified Warrants of authorized
denominations representing, in the aggregate, the number of Warrants theretofore
represented by such Global Warrant.
(d) In connection with the transfer of a portion of the beneficial
interests in a Global Warrant to beneficial owners pursuant to clause (b)(ii) of
this Section 8.2, the Warrant Agent shall reflect on its books and records the
date and a decrease in the amount of Warrants represented by the Global Warrant
in an amount equal to the amount of Warrants represented by the beneficial
interest in the Global Warrant to be transferred, and the Company shall execute,
and the Warrant Agent shall countersign and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in the
Global Warrant, Certificated Warrants of like tenor and amount.
(e) Any Certificated Warrant delivered in exchange for an interest
in a Global Warrant pursuant to paragraph (b) of this Section shall, except as
otherwise provided by paragraph (c) of Section 8.3 hereof, bear the legend
regarding transfer restrictions set forth in Section 2.2 hereof.
(g) The registered holder of a Global Warrant may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Agreement or the Warrants.
22
Section 8.3. Special Transfer Provisions. The following provisions
----------- ---------------------------
shall apply:
(a) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of Warrants to a QIB:
(i) If the Warrants to be transferred are represented by
Certificated Warrants, the Warrant Agent shall register the transfer if
such transfer is being made by a proposed transferor who has checked the
box provided for on the form of Warrant Certificate stating, or has
otherwise advised the Company and the Warrant Agent in writing, that the
sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Warrant Certificate stating, or has otherwise advised the Company and the
Warrant Agent in writing, that it is purchasing the Warrants for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the meaning of
Rule 144A, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member that is a QIB,
and the Warrants to be transferred are represented by Certificated
Warrants, upon receipt by the Warrant Agent of the documents referred to in
clause (i) above and instructions given in accordance with the Depositary's
and the Warrant Agent's procedures, the Warrant Agent shall reflect on its
books and records the date and an increase in the amount of Warrants
represented by the Global Warrant in an amount equal to the amount of
Warrants represented by the Certificated Warrants to be transferred, and
the Warrant Agent shall cancel the Certificated Warrants so transferred.
(b) Transfers to Any Other Person. The following provisions shall
-----------------------------
apply with respect to the registration of any proposed transfer of Warrants to
any Person not specified in paragraph (a) above (including any Non-Global
Purchaser).
(i) The Warrant Agent shall register any proposed transfer of
Warrants to any such Person if (x) the transferor has delivered to the
Warrant Agent and the Company a certificate substantially in the form of
Exhibit B-1 hereto and, if required by paragraph (d) thereof, an Opinion of
Counsel to the effect set forth therein and (y) the proposed transferee has
delivered to the Warrant Agent and the Company a certificate substantially
in the form of Exhibit B-2 hereto if such transferee is a Non-Global
Purchaser.
(ii) (A) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Warrant, upon receipt by the Warrant
Agent and the Company of the documents required by paragraph (i) above and
instructions given in accordance with the Depositary's and the Warrant
Agent's procedures, the Company shall execute and the Warrant Agent shall
countersign Certificated Warrants in an amount equal to the amount of
Warrants represented by the Global Warrant to be transferred, and the
23
Warrant Agent shall decrease the amount of Warrants represented by the
Global Warrant.
(c) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Warrant Certificates not bearing the Private Placement Legend,
the Warrant Agent shall deliver Warrant Certificates that do not bear the
Private Placement Legend. Upon the transfer, exchange or replacement of Warrant
Certificates bearing the Private Placement Legend, the Warrant Agent shall
deliver only Warrant Certificates that bear the Private Placement Legend unless
there is delivered to the Warrant Agent an opinion of counsel reasonably
satisfactory to the Company and its Counsel and the Warrant Agent to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
(d) General. (i) By its acceptance of any Warrants represented by a
-------
Warrant Certificate bearing the Private Placement Legend, each Holder of such
Warrants acknowledges the restrictions on transfer of such Warrants set forth in
this Agreement and in the Private Placement Legend and agrees that it will
transfer such Warrants only as provided in this Agreement. The Warrant Agent
shall not register a transfer of any Warrants unless such transfer complies with
the restrictions on transfer of such Warrants set forth in this Agreement. In
connection with any transfer of Warrants, each Holder agrees by its acceptance
of Warrants to furnish the Warrant Agent or the Company such certifications,
legal opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
provided that the Warrant Agent shall not be required to determine (but may rely
on a determination made by the Company with respect to) the sufficiency of any
such certifications, legal opinions or other information.
(ii) The Warrant Agent shall retain copies of all letters, notices
and other written communications received pursuant to Section 8.2 hereof or
this Section 8.3. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Warrant
Agent.
Section 8.4. Surrender of Warrant Certificates. Any Warrant
----------- ---------------------------------
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by the Company and, except as provided in this Article
VIII in case of an exchange, Article III hereof in case of the exercise of less
than all the Warrants represented thereby or Article VI in case of a mutilated
Warrant Certificate, no Warrant Certificate shall be issued hereunder in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of such cancelled Warrant Certificates as the Company may
direct in writing.
24
ARTICLE IX
WARRANT HOLDERS
Section 9.1. Warrant Holder Deemed Not a Shareholder. The Company
----------- ---------------------------------------
and the Warrant Agent may deem and treat the registered Holder(s) of the Warrant
Certificates as the absolute owner(s) thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone), for the purpose of any
exercise thereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Accordingly, the
Company and/or the Warrant Agent shall not, except as ordered by a court of
competent jurisdiction as required by law, be bound to recognize any equitable
or other claim to or interest in the Warrants on the part of any person other
than such registered Holder, whether or not it shall have express or other
notice thereof. Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a shareholder of the
Company, including, without limitation, the right to vote or to consent to any
action of the shareholders, to receive dividends or other distributions, to
exercise any preemptive right or to receive any notice of meetings of
shareholders and, except as otherwise provided in this Agreement, shall not be
entitled to receive any notice of any proceedings of the Company.
Section 9.2. Right of Action. All rights of action with respect to
----------- ---------------
this Agreement are vested in the Holders of the Warrants, and any Holder of any
Warrant, without the consent of the Warrant Agent or the Holders of any other
Warrant, may, on such Holder's own behalf and for such Holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, such Holder's right
to exercise such Warrants in the manner provided in the Warrant Certificate
representing such Warrants and in this Agreement.
25
ARTICLE X
THE WARRANT AGENT
Section 10.1. Duties and Liabilities. The Warrant Agent hereby
------------ ----------------------
accepts the agency established by this Agreement and agrees to perform the same
upon the terms and conditions herein set forth, by all of which the Company and
the Holders of Warrants, by their acceptance thereof, shall be bound. The
Warrant Agent shall not, by countersigning Warrant Certificates or by any other
act hereunder, be deemed to make any representations as to the validity or
authorization of the Warrants or the Warrant Certificates (except as to its
countersignature thereon) or of any Common Shares issued upon exercise of any
Warrant, or as to the accuracy of the computation of the Exercise Price or the
number or kind or amount of Common Shares deliverable upon exercise of any
Warrant or the correctness of the representations of the Company made in the
certificates that the Warrant Agent receives. The Warrant Agent shall not be
accountable for the use or application by the Company of the proceeds of the
exercise of any Warrant. The Warrant Agent shall not have any duty to calculate
or determine any adjustments with respect to either the Exercise Price or the
kind and amount of Common Shares receivable by Holders upon the exercise of
Warrants required from time to time and the Warrant Agent shall have no duty or
responsibility in determining the accuracy or correctness of such calculation.
The Warrant Agent shall not be (a) liable for any recital or statement of fact
contained herein or in the Warrant Certificates or for any action taken,
suffered or omitted by it in good faith in the belief that any Warrant
Certificate or any other documents or any signatures are genuine or properly
authorized, (b) responsible for any failure on the part of the Company to comply
with any of its covenants and obligations contained in this Agreement or in the
Warrant Certificates or (c) liable for any act or omission in connection with
this Agreement except for its own gross negligence, bad faith or willful
misconduct. The Warrant Agent is hereby authorized to enter into, and perform
its duties under, the Warrant Registration Rights Agreement, as warrant agent in
its capacity as such and on behalf of the Holders. The Warrant Agent also is
hereby authorized to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, Vice-Chairman of the Board,
Chief Executive Officer or other executive officer of the Company and to apply
to any such officer for instructions (which instructions will be promptly given
in writing when requested) and the Warrant Agent shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with the
instructions of any such officer; however, in its discretion, the Warrant Agent
may, in lieu thereof, accept other evidence of such or may require such further
or additional evidence as it may deem reasonable. The Warrant Agent shall not be
liable for any action taken with respect to any matter in the event it requests
instructions from the Company as to that matter and does not receive such
instructions within a reasonable period of time after the request therefor.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees; provided reasonable care has been exercised
with respect to the retention of any such attorney, agent or employee. The
Warrant Agent shall not be under any obligation or duty to institute, appear in
or defend any action, suit or legal proceeding in respect hereof, unless first
indemnified to its reasonable satisfaction. The Warrant Agent shall promptly
notify the Company in writing of any claim made or action, suit or proceeding
instituted against it arising out of or in
26
connection with this Agreement.
The Company will perform, execute, acknowledge and deliver or cause to
be delivered all such further acts, instruments and assurances as are consistent
with this Agreement and as may reasonably be required by the Warrant Agent in
order to enable it to carry out or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
Section 10.2. Right to Consult Counsel. The Warrant Agent may at any
------------ ------------------------
time consult with legal counsel (who may be legal counsel for the Company), and
the opinion or advice of such counsel shall be full and complete authorization
and protection to the Warrant Agent and the Warrant Agent shall incur no
liability or responsibility to the Company or to any Holder for any action
taken, suffered or omitted by it in good faith in accordance with the opinion or
advice of such counsel.
Section 10.3. Compensation; Indemnification. The Company agrees
------------ -----------------------------
promptly to pay the Warrant Agent from time to time and in any case within 30
days of receipt of an invoice, compensation for its services hereunder and under
the Warrant Registration Rights Agreement as the Company and the Warrant Agent
may agree from time to time, and to reimburse it upon its request for reasonable
fees or expenses and reasonable counsel fees and expenses incurred in connection
with the execution and administration of this Agreement and the Warrant
Registration Rights Agreement, and further agrees to indemnify the Warrant Agent
and save it harmless against any losses, liabilities or expenses arising out of
or in connection with the acceptance and administration of this Agreement or the
Warrant Registration Rights Agreement, including, without limitation, the
reasonable costs and expenses of investigating or defending any claim of such
liability, except that the Company shall have no liability hereunder to the
extent that any such loss, liability or expense results from the Warrant Agent's
own gross negligence, bad faith or willful misconduct. The obligations of the
Company under this Section 10.3 shall survive the exercise and the expiration of
the Warrants, the termination of this Agreement or the Warrant Registration
Rights Agreement and the resignation or removal of the Warrant Agent in respect
of services rendered or expenses incurred in connection with the Warrants or
this Agreement.
Section 10.4. No Restrictions on Actions. Nothing in this Agreement
------------ --------------------------
shall be deemed to prevent the Warrant Agent and any shareholder, director,
officer or employee of the Warrant Agent from buying, selling or dealing in any
of the Warrants or other securities of the Company or becoming pecuniarily
interested in transactions in which the Company may be interested, or
contracting with or lending money to the Company or otherwise acting as fully
and freely as though it were not the Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
Section 10.5. Discharge or Removal; Replacement Warrant Agent. The
------------ -----------------------------------------------
Warrant Agent may resign from its position as such and be discharged from all
further duties
27
and liabilities hereunder and under the Warrant Registration Rights Agreement
(except liability arising as a result of the Warrant Agent's own gross
negligence, bad faith or willful misconduct), after giving one month's prior
written notice to the Company. The Company may at any time remove the Warrant
Agent upon one month's written notice specifying the date when such discharge
shall take effect, and the Warrant Agent shall thereupon in like manner be
discharged from all further duties and liabilities hereunder and under the
Warrant Registration Rights Agreement, except as aforesaid. The Warrant Agent
shall mail to each Holder of a Warrant or Warrant Shares, at the Company's
expense and, in the case of Warrant Shares, upon provision by the Company to the
Warrant Agent of a list of all such Holders of Warrant Shares, a copy of said
notice of resignation or notice of removal, as the case may be. Upon such
resignation or removal the Company shall appoint in writing a new warrant agent.
If the Company shall fail to make such appointment within a period of 30
calendar days after it has been notified in writing of such resignation by the
resigning Warrant Agent or after such removal, then the resigning or removed
Warrant Agent or the Holder of any Warrant or Warrant Share may apply to any
court of competent jurisdiction for the appointment of a new warrant agent.
After 30 calendar days from receipt of, or giving, notice, as the case may be,
and pending appointment of a successor to the original Warrant Agent, either by
the Company or by such a court, the duties of the Warrant Agent shall be carried
out by the Company. Any new warrant agent, whether appointed by the Company or
by such a court, shall be a bank or trust company doing business under the laws
of the United States or any state thereof, in good standing and having a
combined capital and surplus of not less than $25,000,000. The combined capital
and surplus of any such new warrant agent shall be deemed to be the combined
capital and surplus as set forth in the most recent annual report of its
condition published by such warrant agent prior to its appointment, provided
that such reports are published at least annually pursuant to law or to the
requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new warrant agent, it shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; however, the original Warrant Agent shall in
all events deliver and transfer to the successor Warrant Agent all property
(including, without limitation, documents and recorded information), if any, at
the time held hereunder by the original Warrant Agent and if for any reason it
shall be necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning or
removed Warrant Agent. Not later than the effective date of any such
appointment, the Company shall file notice thereof with the resigning or removed
Warrant Agent and shall forthwith cause a copy of such notice to be mailed by
the successor Warrant Agent to each Holder of a Warrant or Warrant Share.
Failure to give any notice provided for in this Section 10.5, however, or any
defect therein, shall not affect the legality or validity of the resignation of
the Warrant Agent or the appointment of a new warrant agent, as the case may be.
No Warrant Agent hereunder shall be liable for any acts or omissions of any
successor Warrant Agent.
Section 10.6. Successor Warrant Agent. Any corporation into which
------------ -----------------------
the Warrant Agent or any new warrant agent may be merged or converted, or any
corporation resulting from any consolidation to which the Warrant Agent or any
new warrant agent shall be a party or any corporation succeeding to all or
substantially all the corporate agency business of the Warrant Agent, shall be a
successor Warrant Agent under this Agreement without any further act, provided
that such corporation would be eligible for appointment as
28
successor to the Warrant Agent under the provisions of Section 10.5 hereof. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed to each Holder of a Warrant.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Monies Deposited with the Warrant Agent. The Warrant
------------ ---------------------------------------
Agent shall not be required to pay interest on any monies deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
the Company to pay thereon. Any monies, securities or other property which at
any time shall be deposited by the Company or on its behalf with the Warrant
Agent pursuant to this Agreement shall be and are hereby assigned, transferred
and set over to the Warrant Agent in trust for the purpose for which such
monies, securities or other property shall have been deposited; but such monies,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. Any monies, securities
or other property deposited with the Warrant Agent for payment or distribution
to the Holders that remains unclaimed for one year after the date the monies,
securities or other property was deposited with the Warrant Agent shall be
delivered to the Company upon its request therefor.
Section 11.2. Payment of Taxes. Subject to Article VI hereof, all
------------ ----------------
Common Shares issuable upon the exercise of Warrants shall be validly issued,
fully paid and not subject to any calls for funds, and the Company shall pay any
taxes and other governmental charges that may be imposed under the laws of the
United States of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery thereof upon exercise of
Warrants (other than income taxes imposed on the Holders). The Company shall
not be required, however, to pay any tax or other charge imposed in connection
with any transfer involved in the issue of any certificate for Common Shares
(including other securities or property issuable upon the exercise of the
Warrants) or payment of cash to any Person other than the Holder of a Warrant
Certificate surrendered upon the exercise of a Warrant and in case of such
transfer or payment, the Warrant Agent and the Company shall not be required to
issue any share certificate or pay any cash until such tax or charge has been
paid or it has been established to the Warrant Agent's and the Company's
satisfaction that no such tax or charge is due.
Section 11.3. No Merger, Consolidation or Sale of Assets of the
------------ -------------------------------------------------
Company. Except as otherwise provided herein, the Company will not merge into
-------
or consolidate with any other Person, or sell or otherwise transfer its
property, assets and business substantially as an entirety to a successor of the
Company, unless the Person resulting from such merger or consolidation, or such
successor of the Company, shall expressly assume, by supplemental agreement
satisfactory in form to the Warrant Agent and executed and delivered to the
Warrant Agent, the due and punctual performance and observance of each and every
covenant and condition of this Agreement or contained in the Warrants to be
performed and observed by the Company.
Section 11.4. Reports to Holders. At all times from and after the
------------ ------------------
Separation Date, whether or not the Company is then required to file reports
with the Commission, the
29
Company shall file with the Commission, to the extent such filings are accepted
by the Commission, all quarterly and annual reports and other information,
documents and reports that would be required to be filed with the Commission
pursuant to Section 13 under the Exchange Act if the Company were required to
file under such section. The Company shall supply the Warrant Agent and each
Holder or shall supply to the Warrant Agent for forwarding to each such Holder,
without cost to such Holder, copies of such reports and other information. In
addition, at all times, the Company shall supply to each Holder, to each
prospective purchaser of Warrants designated by Holders of Warrants which are
required to bear the Private Placement Legend and to broker-dealers, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 11.5. Notices; Payment. (a) Except as otherwise provided in
------------ ----------------
Section 11.5(c) hereof, any notice, demand or delivery authorized by this
Agreement shall be sufficiently given or made when mailed, if sent by first
class mail, postage prepaid, addressed to any Holder of a Warrant at such
Holder's last known address appearing on the register of the Company maintained
by the Warrant Agent and to the Company or the Warrant Agent as follows:
To the Company:
▇▇▇▇▇▇▇ Holdings Inc.
c/o Saratoga Partners III, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
To the Warrant Agent:
(for surrender or transfer of Warrants)
United States Trust Company of New York,
as Warrant Agent
▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
(for notices, demands and other purposes):
United States Trust Company of New York,
as Warrant Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given (i) to the
Holder when mailed, whether or not the Holder receives the notice and (ii) to
the Warrant Agent or the Company, when received.
(b) Payment of the Exercise Price should be made in accordance with
the
30
provisions of this Agreement at the office of the Warrant Agent therefor, as
set forth above.
(c) Any notice required to be given by the Company to the Holders
shall be made by mailing by registered mail, return receipt requested, to the
Holders at their last known addresses appearing on the register maintained by
the Warrant Agent. The Company hereby irrevocably authorizes the Warrant Agent,
in the name and at the expense of the Company, to mail any such notice upon
receipt thereof from the Company. Any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly given when
mailed, whether or not the Holder receives the notice.
Section 11.6. Binding Effect. This Agreement shall be binding upon
------------ --------------
and inure to the benefit of the Company and the Warrant Agent and their
respective successors and assigns, and the Holders from time to time of the
Warrants. Nothing in this Agreement is intended or shall be construed to confer
upon any Person, other than the Company, the Warrant Agent and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or
any part hereof.
Section 11.7. Counterparts. This Agreement may be executed manually
------------ ------------
or by facsimile in any number of counterparts, each of which shall be deemed an
original, but all of which together constitute one and the same instrument.
Section 11.8. Amendments. (a) The Warrant Agent may, without the
------------ ----------
consent or concurrence of the Holders of the Warrants, by supplemental agreement
or otherwise, join with the Company in making any changes or corrections in this
Agreement that (a) are required to cure any ambiguity or to correct any
defective or inconsistent provision or clerical omission or mistake or manifest
error herein contained or (b) add to the covenants and agreements of the Company
in this Agreement further covenants and agreements of the Company thereafter to
be observed, or surrender any rights or power reserved to or conferred upon the
Company in this Agreement; provided that in either case such changes or
corrections do not and will not adversely affect, alter or change the rights,
privileges or immunities of the Holders of Warrants. Upon the Warrant Agent's
request, the Company shall promptly provide an Officer's Certificate and Opinion
of Counsel which provide all conditions precedent to adoption of an amendment
that have been satisfied.
(b) Notwithstanding the foregoing, the Company and the Warrant Agent
may amend this Agreement, with the prior written consent of all Holders of
Warrants issued hereunder, including any amendment to the terms of the Warrants,
the Warrant Shares or the outstanding Warrant Certificates. If any such
amendment shall amend the outstanding Warrant Certificates, the Warrant Agent
shall notify each holder of such amendment and request that each holder
surrender its Warrant Certificate at the corporate trust office address of the
Warrant Agent set forth under Section 11.5 hereof in exchange for a new
certificate evidencing such amendment.
Section 11.9. Headings. The descriptive headings of the several
------------ --------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 11.10. Common Shares Legend. Unless and until the Common
------------- --------------------
Shares issuable upon the exercise of the Warrants are registered under the
Securities Act, or unless
31
otherwise agreed by the Company and the Holder thereof, such Common Shares will
bear a legend to the following effect:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES
ACT, AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES
ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRANSFER AGENT AND REGISTRAR A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER
AGENT AND REGISTRAR) AND IF SUCH TRANSFER IS IN RESPECT OF SECURITIES
HAVING A PURCHASE PRICE OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) BUT ONLY IN THE CASE OF A
TRANSFER THAT IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE
SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEE'S NAME) IN THE BOOKS
MAINTAINED BY THE REGISTRAR, AND SUBJECT TO THE RECEIPT BY THE REGISTRAR OF
A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
32
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IN CONNECTION
WITH ANY TRANSFER OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO
ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE
TO THE TRANSFER AGENT AND REGISTRAR. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRANSFER AGENT AND REGISTRAR AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. IN ADDITION, THE HOLDER OF THIS
SECURITY UNDERSTANDS THAT THE SECURITY MAY NOT BE SOLD OR TRANSFERRED TO,
AND SUCH HOLDER SHALL BE DEEMED TO HAVE REPRESENTED AND COVENANTED THAT IT
IS NOT ACQUIRING THIS SECURITY FOR OR ON BEHALF OF, AND WILL NOT TRANSFER
THIS SECURITY TO, ANY PERSON OTHER THAN (I) AN INDIVIDUAL CITIZEN OR
RESIDENT OF THE UNITED STATES FOR U.S. FEDERAL INCOME TAX PURPOSES, (II) A
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER
THE LAWS OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, (III)
AN ESTATE THE INCOME OF WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME
TAX REGARDLESS OF THE SOURCE, (IV) A TRUST WHOSE ADMINISTRATION IS SUBJECT
TO THE PRIMARY SUPERVISION OF A UNITED STATES COURT AND WHICH HAS ONE OR
MORE UNITED STATES PERSONS WHO HAVE THE AUTHORITY TO CONTROL ALL
SUBSTANTIAL DECISIONS OF THE TRUST, OR (V) ANY OTHER PERSON WHOSE INCOME OR
GAIN IN RESPECT OF THIS SECURITY IS EFFECTIVELY CONNECTED WITH THE CONDUCT
OF A UNITED STATES TRADE OR BUSINESS (OR, IF APPLICABLE, ATTRIBUTABLE TO A
PERMANENT ESTABLISHMENT SITUATED IN THE UNITED STATES) WHO DELIVERS
APPROPRIATE DOCUMENTATION TO THE ISSUER OF THIS SECURITY.
Section 11.11. Third Party Beneficiaries. The Holders shall be third
------------- -------------------------
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Warrant Agent, on the other hand, and each Holder shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder. By acquiring Warrants, each Holder agrees to be bound by the
obligations of Holders generally as set forth herein and as such obligations may
be applicable to such Holder.
Section 11.12. Termination. Except as otherwise specified herein,
------------- -----------
this
33
Agreement shall terminate at 5:00 p.m. (New York City time) on the twelfth
anniversary of the Closing Date. Notwithstanding the foregoing, this Agreement
shall terminate on any earlier date as of which all Warrants have been
exercised.
Section 11.13. Governing Law. This Agreement shall be governed by
------------- -------------
the laws of the State of New York.
34
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
▇▇▇▇▇▇▇ HOLDINGS INC.
By:_______________________________
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Warrant Agent
By:_______________________________
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
▇▇▇▇▇▇▇ HOLDINGS INC.
[CUSIP] [CINS] [ISIN] No. _____
No. _____
WARRANTS TO PURCHASE COMMON SHARES
This certifies that ______________, or its registered assigns, is the
owner of _________________ Warrants, each of which represents the right to
purchase, after November 26, 1998, from ▇▇▇▇▇▇▇ HOLDINGS INC., a Delaware
corporation (the "Company"), [_______] common shares, par value $0.0001 per
-------
share, of the Company (the "Common Shares") at an exercise price (the "Exercise
------------- --------
Price") of $____ per Common Share (subject to adjustment as provided in the
-----
Warrant Agreement hereinafter referred to below), upon surrender hereof at the
office of the United States Trust Company of New York, or to its successor, as
the warrant agent under the Warrant Agreement (any such warrant agent being
herein called the "Warrant Agent"), with the Subscription Form on the reverse
-------------
hereof duly executed, with signature guaranteed as therein specified and
simultaneous payment in full by wire transfer in immediately available funds or
by certified or official bank or bank cashier's check payable to the order of
the Company. Notwithstanding the foregoing, the Exercise Price may be paid by
surrendering additional Warrants to the Warrant Agent having an aggregate Spread
equal to the aggregate Exercise Price of the Warrants being exercised. At any
time after November 26, 1998 and on or before 5:00 p.m. (New York City time) on
November 30, 2009 any outstanding Warrants may be exercised on any Business Day;
provided that the Warrant Registration Statement is, at the time of exercise,
effective and available for the exercise of Warrants, or the exercise of such
Warrants is exempt from the registration requirements of the Securities Act, and
the Common Shares are qualified for sale or exempt from qualification under the
applicable securities laws of the states or other jurisdictions in which the
various holders of the Warrants reside.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of November 26, 1997 (the "Warrant Agreement"),
-----------------
between the Company and the United States Trust Company of New York, as Warrant
Agent, and a Registration Rights Agreement dated as of November 26, 1997 (the
"Warrant Registration Rights Agreement"), between the Company and the United
--------------------------- ---------
States Trust Company of New York, as Warrant Agent, and is subject to the
Certificate of Incorporation and Bylaws of the Company and to the terms and
provisions contained therein, to all of which terms and provisions the Holder of
this Warrant Certificate consents by acceptance hereof. The terms of the
Warrant Agreement and the Warrant Registration Rights Agreement are hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement and the Warrant Registration Rights Agreement for
a full description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Company and the Holders of the Warrants. The
summary of the terms of the Warrant Agreement and the Warrant Registration
Rights Agreement contained in this Warrant Certificate is qualified in its
entirety by express reference to the Warrant Agreement and the Warrant
Registration Rights Agreement. All terms used in this Warrant Certificate that
are defined in the Warrant Agreement and the Warrant Registration Rights
Agreement shall have the meanings assigned to them in such
A-2
agreements.
Copies of the Warrant Agreement and the Warrant Registration Rights
Agreement are on file at the office of the Warrant Agent and may be obtained by
writing to the Warrant Agent at the following address:
United States Trust Company of New York,
as Warrant Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
If the Company merges or consolidates with or into, or sells all or
substantially all of its property and assets to, another Person and the
consideration received by holders of Common Shares consists solely of cash, the
Holders of Warrants shall be entitled to receive distributions on the date of
such event on an equal basis with holders of Common Shares (or other securities
issuable upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event (less the Exercise Price). Upon receipt of such
payment, if any, the rights of a Holder shall terminate and cease and such
Holder's Warrants shall expire.
The number of Common Shares purchasable upon the exercise of each
Warrant and the price per share are subject to adjustment as provided in the
Warrant Agreement. Except as stated in the immediately preceding paragraph, in
the event the Company merges or consolidates with, or sells all or substantially
all of its assets to, another Person, each Warrant will, upon exercise, entitle
the Holder thereof to receive the number of shares of capital stock or other
securities or the amount of money and other property which the holder of an
Common Share (or other securities or property issuable upon exercise of a
Warrant) is entitled to receive upon completion of such merger, consolidation or
sale. Notwithstanding anything to the contrary herein contained, if the
Company, ▇▇▇▇▇▇▇ Fasteners Inc. (subsequent to the merger of ▇▇▇▇▇▇▇ Acquisition
Inc. with and into ▇▇▇▇▇▇▇ Fasteners Inc.) or any entity which owns, directly or
indirectly, a majority of the capital stock of ▇▇▇▇▇▇▇ Fasteners Inc. conducts,
in the case of the Company, any initial public offering of equity securities
(other than Common Shares) and, in the case of ▇▇▇▇▇▇▇ Fasteners Inc. or any
entity which owns, directly or indirectly, a majority of the capital stock of
▇▇▇▇▇▇▇ Fasteners Inc., any initial public offering of equity securities, in
each case regardless of whether such offering consists of the issuance of new
shares or the sale of outstanding shares, the Company will give the Holders the
opportunity to convert such Warrants into warrants to purchase such equity
securities and such Warrant Shares or such other securities that have been
received by the Holders upon the exercise of Warrants into such equity
securities.
As to any final fraction of a share which the same Holder of one or
more Warrant Certificates would otherwise be entitled to purchase upon exercise
thereof in the same transaction, the Company may pay the cash value thereof
determined as provided in the Warrant Agreement.
Subject to Article VI of the Warrant Agreement, all Common Shares
issuable by the Company upon the exercise of Warrants shall be validly issued,
fully paid and not
A-3
subject to any calls for funds, and the Company shall pay any taxes and other
governmental charges that may be imposed under the laws of the United States of
America or any political subdivision or taxing authority thereof or therein in
respect of the issue or delivery thereof upon exercise of Warrants (other than
income taxes imposed on the Holders). The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for Common Shares (including other
securities or property issuable upon the exercise of the Warrants) or payment of
cash to any Person other than the Holder of a Warrant Certificate surrendered
upon the exercise of a Warrant and in case of such transfer or payment, the
Warrant Agent and the Company shall not be required to issue any share
certificate or pay any cash until such tax or charge has been paid or it has
been established to the Warrant Agent's and the Company's satisfaction that no
such tax or charge is due.
Subject to the restrictions on and conditions to transfer set forth in
Article VIII of the Warrant Agreement, this Warrant Certificate and all rights
hereunder are transferable by the registered Holder hereof, in whole or in part,
on the register of the Company maintained by the Warrant Agent for such purpose
at the Warrant Agent's office at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Services, upon surrender of this Warrant
Certificate duly endorsed, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Warrant Agent duly executed, with
signatures guaranteed as specified in the attached Form of Assignment, by the
registered Holder hereof or his attorney duly authorized in writing and by such
other documentation required pursuant to the Warrant Agreement and upon payment
of any necessary transfer tax or other governmental charge imposed upon such
transfer. Upon any partial transfer, the Company will sign and issue and the
Warrant Agent will countersign and deliver to such Holder a new Warrant
Certificate or Certificates with respect to any portion not so transferred.
Each taker and Holder of this Warrant Certificate, by taking and holding
the same, consents and agrees that prior to the registration of transfer as
provided in the Warrant Agreement, the Company and the Warrant Agent may treat
the person in whose name the Warrants are registered as the absolute owner
hereof for any purpose and as the Person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding. Accordingly, the
Company and/or the Warrant Agent shall not, except as ordered by a court of
competent jurisdiction as required by law, be bound to recognize any equitable
or other claim to or interest in the Warrants on the part of any person other
than such Registered Holder, whether or not it shall have express or other
notice thereof.
This Warrant Certificate may be exchanged at the office of the Warrant
Agent maintained for such purpose in at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ , Attention: Corporate Trust Services, for Warrant Certificates
representing the same aggregate number of Warrants, each new Warrant Certificate
to represent such number of Warrants as the Holder hereof shall designate at the
time of such exchange.
Prior to the exercise of the Warrants represented hereby, the Holder
of this Warrant Certificate, as such, shall not be entitled to any rights of a
shareholder of the Company, including, without limitation, the right to vote or
to consent to any action of the shareholders, to receive any distributions, to
exercise any pre-emptive right or to receive any notice of meetings of
shareholders, and shall not be entitled to receive any notice of any proceedings
of the Company except as provided in the Warrant Agreement.
A-4
This Warrant Certificate shall be void and all rights evidenced hereby
shall cease on November 30, 2009, unless sooner terminated by the liquidation,
dissolution or winding-up of the Company or as otherwise provided in the Warrant
Agreement upon the consolidation or merger of the Company with, or sale of the
Company to, another Person or unless such date is extended as provided in the
Warrant Agreement.
A-5
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
Dated: _____________
▇▇▇▇▇▇▇ HOLDINGS INC.
By: _________________________
Name:
Title:
Countersigned:
United States Trust Company of New York,
as Warrant Agent
By: ___________________________
Authorized Signatory
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: United States Trust Company of New York,
as Warrant Agent
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
The undersigned irrevocably exercises ________of the Warrants
represented by this Warrant Certificate and herewith makes payment [of $_______
(such payment being by wire transfer in immediately available funds or by
certified or official bank or bank cashier's check payable to the order or at
the direction of ▇▇▇▇▇▇▇ Holdings Inc.] [by surrendering additional Warrants
having an aggregate Spread equal to the aggregate exercise price of the Warrants
being exercised], all at the exercise price and on the terms and conditions
specified in this Warrant Certificate and in the Warrant Agreement and the
Warrant Registration Rights Agreement referred to herein and surrenders this
Warrant Certificate and all right, title and interest therein to and directs
that the Common shares, par value $0.0001 per share, of ▇▇▇▇▇▇▇ Holdings Inc.
(the "Common Shares") deliverable upon the exercise of such Warrants be
-------------
registered or placed in the name and at the address specified below and
delivered thereto.
Dated: _______________________________
(Signature of Owner)
_______________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
_______________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
_______________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-7
Securities and/or check or other property to be issued or delivered to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
FORM OF ASSIGNMENT
In consideration of monies or other valuable consideration received
from the Assignee(s) named below, the undersigned registered Holder of this
Warrant Certificate hereby sells, assigns, and transfers unto the Assignee(s)
named below (including the undersigned with respect to any Warrants constituting
a part of the Warrants evidenced by this Warrant Certificate not being assigned
hereby) all of the right of the undersigned under this Warrant Certificate, with
respect to the number of Warrants set forth below:
Name(s) of Assignee(s): ___________________________________
Address: __________________________________________________
No. of Warrants: __________________________________________
Please insert social security or other identifying number of assignee(s):
and does hereby irrevocably constitute and appoint ________________________ the
undersigned's attorney to make such transfer on the books of __________________
maintained for the purposes, with full power of substitution in the premises.
In connection with any transfer of Warrants, the undersigned confirms
that without utilizing any general solicitation or general advertising that:
[Check One]
[_] (a) these Warrants are being transferred in compliance with the exemption
from registration under the U.S. Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
--
[_] (b) these Warrants are being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Warrant Certificate and the
Warrant Agreement.
or
--
[_] (c) these Warrants are being transferred pursuant to an effective
registration statement under the U.S. Securities Act of 1933, as
amended.
A-9
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Warrants in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article VIII of the Warrant Agreement shall
have been satisfied.
Dated:
_________________________
(Signature of Owner)
_________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
_________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
___________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing the
Warrant(s) for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the U.S. Securities
Act of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding ▇▇▇▇▇▇▇ Holdings Inc. as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated:________________
______________________________________________
[NOTE: To be executed by an executive officer]
EXHIBIT B-1
Form of Certificate to be
Delivered by Transferor in Connection with
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
▇▇▇▇▇▇▇ Holdings Inc.
c/o Saratoga Partners III, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
United States Trust Company of New York,
as Warrant Agent
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Re:Warrants (the "Warrants") to Purchase
Common Shares of ▇▇▇▇▇▇▇ Holdings Inc. (the "Company")
Ladies and Gentlemen:
We hereby certify that such transfer is being effected in compliance with the
transfer restrictions applicable to the Warrants or interests therein
transferred pursuant to and in accordance with the Securities Act, and
accordingly we hereby further certifies that (check one):
[Check One]
(a)[_] such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;
or
--
(b)[_]such transfer is being effected to the Company or a subsidiary thereof;
or
--
(c)[_]such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
B1-2
or
--
(d) [_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or Rule 144
, and we hereby further certify that such transfer complies with the transfer
restrictions applicable to the Warrants or interests therein transferred to
Institutional Accredited Investors and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of Counsel
provided by us or the transferee (a copy of which we have attached to this
certification), to the effect that (a) such transfer is in compliance with the
Securities Act and such (b) such transfer complies with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed transfer in accordance with the terms of the Warrant Agreement, the
transferred Warrants or interests therein will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Certificated Warrant and in the Warrant Agreement and the Securities Act.
Very truly yours,
[Name of Transferor]
By:____________________________________
Authorized Signatory
EXHIBIT B-2
Form of Certificate to be
Delivered By Transferees in Connection with
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
▇▇▇▇▇▇▇ Holdings Inc.
c/o Saratoga Partners III, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
United States Trust Company of New York,
as Warrant Agent
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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Attention: Corporate Trust Services
Re: Warrants (the "Warrants") to Purchase
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Common Shares of
▇▇▇▇▇▇▇ Holdings Inc. (the "Company")
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Ladies and Gentlemen:
In connection with our proposed purchase of ___________ aggregate
number of Warrants, we confirm that:
(i) We understand that any subsequent transfer of the Warrants, any
interest therein or the Common Stock (or other securities) issuable upon
exercise of any Warrant (the "Warrant Shares") is subject to certain
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restrictions and conditions set forth in the Warrant Agreement dated as of
November 26, 1997 relating to the Warrants (the "Warrant Agreement") and the
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Warrant Registration Rights Agreement dated November 26, 1997 relating to
the Warrants (the "Warrant Registration Rights Agreement") and the
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undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Warrants or the Warrant Shares except in compliance with, such
restrictions and conditions and the U.S. Securities Act of 1933, as amended
(the "Securities Act").
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(ii) we are an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933,
as amended ("Securities Act"), or an entity in which all of the equity
owners are institutional accredited investors within the meaning of Rule
501(a) under the Securities Act (an "Institutional Accredited Investor");
(iii) any purchase of Warrants by us will be for our own account or
for the account of one or more other Institutional Accredited Investors;
(iv) in the event that we purchase any Warrants, we will acquire
Warrants having a minimum purchase price of at least $100,000 for our own
account and for each
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separate account for which we are acting;
(v) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
Warrants;
(vi) we are not acquiring the Warrants for or on behalf of, and will
not transfer the Warrants or the Warrant Shares to, any pension or welfare
plan (as defined in Section 3 of the Employee Retirement Income Security Act
of 1974, as amended) or plan (as defined in Section 4975 of the Internal
Revenue Code, as amended), except as permitted by the Warrant Agreement, the
Warrants or the Warrant Shares.
We understand that the Warrants have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Warrants, that, within the time period referred to
under Rule 144(k) under the Securities Act as in effect on the date of the
transfer of such Warrants or Warrant Shares, such Warrants or Warrant Shares may
be offered, resold, pledged or otherwise transferred only (i) (a) to a person
whom we reasonably believe to be a qualified institutional buyer (as defined in
Rule 144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A, (b) to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Warrant Agent (as defined in the Warrant Agreement)
or, in the case of the Warrant Shares, to the transfer agent and registrar
thereof, a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Warrants or Warrant Shares (the
form of which letter can be obtained from the Warrant Agent or such transfer
agent and registrar) and, if such transfer is in respect of Warrants or Warrant
Shares having a purchase price at the time of transfer of less than $100,000, an
opinion of counsel acceptable to the Company that such transfer is in compliance
with the Securities Act, (c) in a transaction meeting the requirements of Rule
144 under the Securities Act, or (d) in accordance with another exemption from
the registration requirements of the Securities Act (and based upon an opinion
of counsel if the Company so requests), but only in the case of a transfer that
is effected by the delivery to the transferee of definitive securities
registered in its name (or its nominee's name) in the books maintained by the
applicable registrar, and subject to the receipt by such registrar of a
certification of the transferor and an opinion of counsel to the effect that
such transfer is in compliance with the Securities Act, (ii) to the Company or
(iii) pursuant to an effective registration statement under the Securities Act,
and, in each case, in accordance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction. We will notify
any purchaser from us that the Warrants or Warrant Shares are subject to the
resale restrictions set forth in the above sentence. We understand that the
Warrant Agent or the transfer agent and registrar, if any, will not be required
to accept for registration or transfer any Warrants or Warrant Shares, except
upon presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that
the Warrants purchased by us will be issued in the form of definitive physical
certificates, subject to the terms and conditions of the Warrant Agreement, and
that such certificates will bear a legend reflecting the substance of this
paragraph.
We understand that the Warrants may not be sold or transferred to, and
we represent and covenant that we are not acquiring the Warrants for or on
behalf of, and will not transfer the Warrants to, any person other than (i) an
individual citizen or resident of the United States for U.S. federal income tax
purposes, (ii) a corporation, partnership or other entity created or organized
in or under the laws of the United States or any political
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subdivision thereof, (iii) an estate the income of which is subject to U.S.
federal income tax regardless of source, (iv) a trust whose administration is
subject to the primary supervision of a United States court and which has one or
more United States persons who have the authority to control all substantial
decisions of the trust, or (v) any other person whose income or gain in respect
of the Warrants is effectively connected with the conduct of a United States
trade or business (or, if applicable, attributable to a permanent establishment
situated in the United States) who delivers appropriate documentation to the
Company.
We acknowledge that you and others will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.
Very truly yours,
[Name of Transferee]
By:________________________________________
Authorized Signature