S&S DRAFT
01/20/97
WARRANT AGREEMENT
between
ORION NEWCO SERVICES, INC.
and
BANKERS TRUST COMPANY,
Warrant Agent
Dated as of [___________], 1997
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates................................................................ 5
Section 2.2. Legends..................................................................................... 6
Section 2.3. Execution and Delivery of Warrant Certificates.............................................. 7
Section 2.4. Transfer and Exchange....................................................................... 7
Section 2.5. Surrender of Warrant Certificates........................................................... 10
ARTICLE III
EXERCISE PRICE; EXERCISE AND REPURCHASE OF WARRANTS
Section 3.1. Exercise Price.............................................................................. 10
Section 3.2. Exercise; Restrictions on Exercise.......................................................... 10
Section 3.3. Method of Exercise; Payment of Exercise Price............................................... 11
Section 3.4. Repurchase Offers........................................................................... 12
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments................................................................................. 15
Section 4.2. Notice of Adjustment........................................................................ 22
Section 4.3. Statement on Warrants....................................................................... 22
Section 4.4. Notice of Consolidation, Merger, Etc........................................................ 22
Section 4.5. Fractional Interests........................................................................ 23
ARTICLE V
DECREASE IN EXERCISE PRICE
ARTICLE VI
LOSS OR MUTILATION
ARTICLE VII
AUTHORIZATION AND RESERVATION
OF COMMON SHARES
ii
Page
ARTICLE VIII
WARRANT HOLDERS
Section 8.1. Warrant Holder Not Deemed a Stockholder..................................................... 24
Section 8.2. Right of Action............................................................................. 25
ARTICLE IX
REMEDIES
Section 9.1. Defaults.................................................................................... 25
Section 9.2. Payment Obligations......................................................................... 25
Section 9.3. Remedies; No Waiver......................................................................... 25
ARTICLE X
THE WARRANT AGENT
Section 10.1. Duties and Liabilities..................................................................... 26
Section 10.2. Right to Consult Counsel................................................................... 27
Section 10.3. Compensation; Indemnification.............................................................. 27
Section 10.4. No Restrictions on Actions................................................................. 27
Section 10.5. Discharge or Removal; Replacement Warrant Agent............................................ 28
Section 10.6. Successor Warrant Agent.................................................................... 29
ARTICLE XI
REGISTRATION
Section 11.1. Effectiveness and Availability of Registration Statement................................... 29
Section 11.2. Suspension................................................................................. 29
Section 11.3. Blue Sky................................................................................... 29
Section 11.4. Accuracy of Disclosure..................................................................... 30
Section 11.5. Indemnity.................................................................................. 30
Section 11.6. Expenses................................................................................... 30
Section 11.7. Additional Acts............................................................................ 30
ARTICLE XII
MISCELLANEOUS
Section 12.1. Money Deposited with the Warrant Agent..................................................... 31
Section 12.2. Payment of Taxes........................................................................... 31
Section 12.3. No Merger, Consolidation or Sale of Assets of Newco........................................ 31
iii
Page
Section 12.4. Reports to Holders......................................................................... 31
Section 12.5. Notices.................................................................................... 32
Section 12.6. Governing Law.............................................................................. 32
Section 12.7. Binding Effect............................................................................. 33
Section 12.8. Counterparts............................................................................... 33
Section 12.9. Amendments................................................................................. 33
Section 12.10. Headings.................................................................................. 33
Section 12.11. Common Shares Legend...................................................................... 33
Section 12.12. Third Party Beneficiaries................................................................. 34
Section 12.13. Submission to Jurisdiction; Appointment of Agent for Service.............................. 34
EXHIBIT A FORM OF WARRANT CERTIFICATE.................................A-1
APPENDIX A LIST OF FINANCIAL EXPERTS
2
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of [_____________], 1997 (this
"Agreement"), between ORION NEWCO SERVICES, INC., a Delaware corporation
("Newco"), and BANKERS TRUST COMPANY, a banking corporation duly organized and
existing under the laws of the State of New York, as warrant agent (the "Warrant
Agent").
Pursuant to the terms of an Underwriting Agreement dated
as of [______________], 1997 (the "Underwriting Agreement"), between Newco and
Orion Network Systems, Inc., a Delaware corporation ("Orion"), on the one hand,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., as Underwriters (collectively, the "Underwriters"), on the other hand,
Newco has agreed to issue and sell to the Underwriters _____ Senior Note Units
(collectively, the "Senior Note Units") and _____ Senior Discount Note Units
(collectively, the "Senior Discount Note Units"; and, together with the Senior
Note Units, the "Units"). Each Senior Note Unit will consist of (i) one ____%
Senior Note due 2007 with a principal amount of $1,000 (collectively, the
"Senior Notes") to be issued pursuant to the provisions of a Senior Note
Indenture (the "Senior Note Indenture") to be dated as of the Closing Date (as
defined below) between Newco, the subsidiaries of Orion, as guarantors (the
"Guarantors") and Bankers Trust Company, as trustee and (ii) a Warrant
(collectively, the "Warrants"), each Warrant entitling the holder thereof to
purchase ______ Common Shares of Newco at a price of $[___] per share, subject
to adjustment as provided herein. Each Senior Discount Note Unit will consist of
(i) one ___% Senior Unsecured Discount Note due 2007 with a principal amount of
maturity of $1,000 (collectively, the "Senior Discount Notes"; and, together
with the Senior Notes, the "Notes") to be issued pursuant to the provisions of a
Senior Discount Note Indenture to be dated as of the Closing Date (the "Senior
Discount Note Indenture"; and, together with the Senior Note Indenture, the
"Indentures") between Newco, the Guarantors, as guarantors, and the Trustee, as
trustee and (ii) a Warrant. The Notes and Warrants included in each Unit will
become separately transferable at the close of business upon the earliest of (i)
the date that is six months after the Closing Date, (ii) such date as the
Underwriters may, in their discretion, deem appropriate and (iii) in the event
of an Offer to Purchase, the date Newco mails notice thereof to holders of the
Notes.
In consideration of the foregoing and of the agreements
contained in the Underwriting Agreement and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder of Newco and the record holders of the Warrants (the "Holders"),
Newco and the Warrant Agent hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" of any Person means any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control", when used
with respect to any Person, means the power to direct the management and
policies of such Person, 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 2.4
hereof.
"Business Day" means any day which is not a Saturday, a
Sunday, or any other day on which banking institutions are authorized or
required to be closed in the State of New York or the state in which the
principal corporate trust office of the Warrant Agent is located.
"Certificated Warrants" has the meaning specified in
Section 2.4 hereof.
"Closing Date" means [____________], 1997.
"Commission" means the Securities and Exchange Commission.
"Common Shares" means the common stock, par value $.01 per
share, of Newco and any other capital stock into which such shares may be
converted or reclassified or that may be issued in respect of, in exchange for,
or in substitution of, such Common Shares by reason of any stock splits, stock
dividends, distributions, mergers, consolidations or other like events.
"Current Market Value" has the meaning specified in
Section 4.1(f) hereof.
"Default" has the meaning specified in Article IX hereof.
"Depositary" means The Depository Trust Company, its
nominees and their respective successors.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exercise Price" has the meaning specified in Section 3.1
hereof.
"Expiration Date" means [________________], 2007.
"Expiration Time" has the meaning specified in Section
4.1(e) hereof.
"Financial Expert" means one of the Persons listed in
Appendix A hereto.
"Global Warrant" has the meaning specified in Section 2.1
hereof.
"Guarantors" has the meaning specified in the recitals to
this Agreement.
"Holders" has the meaning specified in the recitals to
this Agreement.
"Indentures" has the meaning specified in the recitals to
this Agreement.
"Independent Financial Expert" means a Financial Expert
that does not (and whose directors, executive officers or 5% stockholders do
not) have a direct or indirect financial interest in Newco or any of its
subsidiaries, which has not been for at least five years, and, at the time it is
called upon to give independent financial advice to Newco is not (and none of
its directors, executive officers or 5% stockholders is) a promoter, director,
or officer of Newco or any of its subsidiaries. The Independent Financial Expert
may be compensated and indemnified by Newco for opinions or services it provides
as an Independent Financial Expert.
"Newco" has the meaning specified in the recitals to this
Agreement.
"Notes" has the meaning specified in the recitals to this
Agreement.
"Notice Date" has the meaning specified in Section 3.4(b)
hereof.
"Offer Notice" has the meaning specified in Section 3.4(f)
hereof.
"Offer to Purchase" means an offer to purchase Notes by
Newco from the Holders commenced by mailing a notice to the relevant trustee and
each Holder stating: (i) the covenant of the Indenture pursuant to which the
offer is being made and that all Notes validly tendered will be accepted for
payment on a pro rata basis; (ii) the purchase price and the date of purchase
(which shall be a Business Day no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the "Payment Date"); (iii) that any Note
not tendered will continue to accrue interest (or original issue discount)
pursuant to its terms; (iv) that, unless Newco defaults in the payment of the
purchase price, any Note accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest (or original issue discount) on and after the
Payment Date; (v) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
Note completed, to the Paying Agent (as defined in the Indentures) at the
address specified in the notice prior to the close of business on the Business
Day immediately preceding the Payment Date; (vi) that Holders will be entitled
to withdraw their election if the Paying Agent receives, not later than the
close of business on the third Business Day immediately preceding the Payment
Date, a telegram, facsimile transmission or letter setting forth the name of
such Holder, the principal amount at maturity of Notes delivered for purchase
and a statement that such Holder is withdrawing his election to have such Notes
purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount at maturity to the
unpurchased portion of the Notes surrendered; provided that each Note purchased
and each new Note issued shall be in a principal amount at maturity of $1,000 or
an integral multiple thereof.
"Orion" has the meaning specified in the recitals to this
Agreement.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Registration Statement" has the meaning specified in
Section 11.1 hereof.
"Relevant Value" has the meaning specified in Section
3.4(d) hereof.
"Repurchase Event" means, and shall be deemed to occur on,
any date prior to the Expiration Date when Newco (i) consolidates or merges into
or with another Person (but only where the holders of Common Shares receive
consideration in exchange for all or part of such Common Shares) if the Common
Shares (or other securities) thereafter issuable upon exercise of the Warrants
are not registered under the Exchange Act or (ii) sells all or substantially all
of its assets to another Person if the Common Shares (or other securities)
thereafter issuable upon exercise of the Warrants is not registered under the
Exchange Act; provided that in each case a "Repurchase Event" will not be deemed
to have occurred if the consideration for the Common Shares in such transaction
consists solely of cash.
"Repurchase Notice" has the meaning specified in Section
3.4(a) hereof.
"Repurchase Obligation" has the meaning specified in
Section 9.2 hereof.
"Repurchase Offer" has the meaning specified in Section
3.4(b) hereof.
"Repurchase Price" has the meaning specified in Section
3.4(d) hereof.
"Securities Act" means the Securities Act of 1933, as
amended.
"Senior Discount Note Indenture" has the meaning specified
in the recitals to this Agreement.
"Senior Discount Notes" has the meaning specified in the
recitals to this Agreement.
"Senior Discount Notes Units" has the meaning specified in
the recitals to this Agreement.
"Senior Note Indenture" has the meaning specified in the
recitals to this Agreement.
"Senior Notes" has the meaning specified in the recitals
to this Agreement.
"Senior Note Units" has the meaning specified in the
recitals to this Agreement.
"Separation Date" means the close of business upon the
earliest of (i) the date that is six months after the Closing Date, (ii) such
date as the Underwriters may, in their discretion, deem appropriate and (iii) in
the event of an Offer to Purchase, the date Newco mails notice thereof to
holders of the Notes.
"Spread" means, with respect to any Warrant, the Current
Market Value of the Underlying Securities issuable upon exercise of such
Warrant, less the Exercise Price of such Warrant, in each case as adjusted as
provided herein.
"Underlying Securities" means the Common Shares or other
securities or property issuable upon exercise of the Warrants.
"Underwriting Agreement" has the meaning specified in the
recitals to this Agreement.
"Units" has the meaning specified in the recitals to this
Agreement.
"Valuation Date" means the date five Business Days prior
to the Notice Date.
"Value Certificate" has the meaning specified in Section
3.4(d)(ii)(1) hereof.
"Value Report" means the value report prepared by an
Independent Financial Expert in accordance with Section 3.4(d)(ii)(2) hereof.
"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.
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates. Certificates
representing the Warrants (the "Warrant Certificates") shall be issued in
registered form only, shall be substantially in the form attached hereto as
Exhibit A, shall be dated the date on which 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 Newco 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.
The Warrants shall be issued initially in the form of one
or more permanent global Warrant Certificates in definitive, fully registered
form, substantially in the form set forth in Exhibit A (the "Global Warrant"),
deposited with the Warrant Agent, as custodian for the Depositary, duly executed
by Newco and countersigned by the Warrant Agent as hereinafter provided.
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 officers executing such Warrant Certificates, as evidenced by their
execution of such Warrant Certificates.
Section 2.2. Legends. (a) 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 NEWCO OR THE WARRANT
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR REPURCHASE 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 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 II OF THE WARRANT AGREEMENT.
(b) Each Warrant Certificate issued prior to the
Separation Date shall bear the following legend on the face thereof:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE WERE INITIALLY ISSUED AS PART
OF AN ISSUANCE OF SENIOR NOTE UNITS (CUSIP NO. [______]) AND SENIOR
DISCOUNT NOTE UNITS (CUSIP NO. [_______]), EACH SENIOR NOTE UNIT OF WHICH
CONSISTS OF $[_______] PRINCIPAL AMOUNT OF [__]% SENIOR NOTES DUE 2007 OF
NEWCO (THE "SENIOR NOTES") AND A WARRANT, AND EACH SENIOR DISCOUNT NOTE
UNIT OF WHICH CONSISTS OF $[_____] PRINCIPAL AMOUNT AT MATURITY OF SENIOR
DISCOUNT NOTES DUE 2007 (TOGETHER WITH THE SENIOR NOTES, THE "NOTES") AND
A WARRANT. PRIOR TO THE CLOSE OF BUSINESS UPON THE EARLIEST OF (I) THE
DATE THAT IS SIX MONTHS AFTER THE CLOSING DATE, (II) SUCH DATE AS THE
UNDERWRITERS MAY, IN THEIR DISCRETION, DEEM APPROPRIATE AND (III) THE DATE
NEWCO MAILS NOTICE OF AN OFFER TO REPURCHASE THE NOTES TO HOLDERS OF THE
NOTES PURSUANT TO THE INDENTURES, THE WARRANTS EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY
BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.
Section 2.3. Execution and Delivery of Warrant
Certificates. Warrant Certificates evidencing Warrants to purchase initially an
aggregate of up to [__________] Common Shares may be executed, on or after the
date of this Agreement, by Newco and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign and deliver
such Warrant Certificates upon the written order and at the direction of Newco
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 2.4, Section 3.3, Section 3.4 or Article VI hereof.
The Warrant Certificates shall be executed on behalf of
Newco by its Chairman of the Board, Chief Executive Officer or President or by a
Vice President, either manually or by facsimile signature printed thereon. The
Warrant Certificates shall be countersigned by manual or facsimile signature of
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of Newco whose signature shall have been
placed upon any of the Warrant Certificates shall cease to be such officer of
Newco 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 of Newco.
Section 2.4. Transfer and Exchange. Newco shall cause to
be kept at the office of the Warrant Agent a register in which, subject to such
reasonable regulations as it may
prescribe, Newco shall provide for the registration of Warrant Certificates and
transfers and exchanges of Warrant Certificates as herein provided.
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 in accordance with this Agreement. Prior to the registration of any
transfer of Warrants by a Holder as provided herein, Newco, the Warrant Agent
and any agent of Newco 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
Warrants are presented to the Warrant Agent with a request to register the
transfer thereof or to exchange them for an equal number of Warrants of other
authorized denominations, the Warrant Agent shall register the transfer or make
the exchange as requested if the requirements of this Agreement for such
transaction are met. To permit registrations of transfers and exchanges, Newco
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 Newco may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection with any registration of
transfer or exchange of Warrants.
The Warrants will 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 Notes issued as part of such Units.
Notwithstanding any other provisions of this Section 2.4,
unless and until it is exchanged in whole or in part for Warrants in definitive
registered form ("Certificated Warrants"), a Global Warrant representing all or
a portion of the Warrants may not be transferred except as a whole by the
Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Interests of beneficial owners in the Global Warrant may be
transferred in accordance with the rules and procedures of the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have no
rights under this Agreement with respect to the Global Warrant held on their
behalf by the Depositary or the Warrant Agent as its custodian, and the
Depositary may be treated by Newco, the Warrant Agent and any agent of Newco or
the Warrant Agent as the absolute owner of such Global Warrant for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent Newco,
the Warrant Agent or any
agent of Newco 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. The registered holder of the 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.
If the Depositary notifies Newco that it is unwilling or
unable to continue as Depositary for the Global Warrant or Warrants or if at any
time the Depositary shall no longer be eligible under the next sentence of this
paragraph, Newco shall appoint a successor Depositary with respect to the
Warrants. Each Depositary appointed pursuant to this Section 2.4 must, at the
time of its appointment and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. Newco will execute, and the Warrant Agent, upon receipt
of written instructions from Newco, will countersign and deliver, Warrants in
definitive registered form in any authorized denominations, in an aggregate
amount equal to the amount of the Global Warrant or Warrants representing such
Warrants in exchange for such Global Warrant or Warrants if the Depositary
notifies Newco that it is unwilling or unable to continue as Depositary for the
Global Warrant or Warrants or if at any time the Depositary shall no longer be
eligible to serve as Depositary and a successor Depositary for the Warrants is
not appointed by Newco within 60 days after Newco receives such notice or
becomes aware of such ineligibility.
Newco may at any time and in its sole discretion determine
that the Warrants shall no longer be represented by a Global Warrant or
Warrants. In such event Newco will execute, and the Warrant Agent, upon receipt
of written instructions from Newco, will countersign and deliver, Certificated
Warrants in any authorized denominations, in an aggregate amount equal to the
amount of Warrants represented by the Global Warrant or Warrants in exchange for
such Global Warrant or Warrants.
Upon the exchange of a Global Warrant for Certificated
Warrants, such Global Warrant shall be cancelled by the Warrant Agent.
Certificated Warrants issued in exchange for a Global Warrant pursuant to this
Section 2.4 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Warrant, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent. The Warrant Agent shall deliver such Certificated
Warrants to or as directed by the Persons in whose names such Warrants are so
registered.
All Warrant Certificates issued upon any registration of
transfer or exchange of Warrants shall be the valid obligations of Newco,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for registration of transfer
or exchange.
Section 2.5. Surrender of Warrant Certificates. Any
Warrant Certificate surrendered for registration of transfer, exchange, exercise
or repurchase of the Warrants represented thereby shall, if surrendered to
Newco, 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 Newco and, except as provided in
this Article II in case of an exchange, Article III hereof in case of the
exercise or repurchase 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 destroy all
cancelled Warrant Certificates in accordance with its normal procedures.
ARTICLE III
EXERCISE PRICE; EXERCISE AND REPURCHASE OF WARRANTS
Section 3.1. Exercise Price. Each Warrant Certificate
shall, when countersigned by the Warrant Agent, entitle the Holder thereof,
subject to the provisions of this Agreement, to purchase [___________] Common
Shares for each Warrant represented thereby at a purchase price (the "Exercise
Price") of $[_____] per share, subject to adjustment as provided in Section 4.1
and Article V hereof, provided that, at the option of the Holder thereof,
payment of the Exercise Price may be satisfied through the delivery and
cancellation of additional Warrants having an aggregate Spread equal to the
Exercise Price of the Warrants being exercised.
Section 3.2. Exercise; Restrictions on Exercise. (a) At
any time after six months from the Closing Date and on or before the Expiration
Date, any outstanding Warrants may be exercised on any Business Day; provided
that the Registration Statement is, at the time of exercise, effective and
available or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act. Any Warrants not exercised by 5:00 p.m., New
York City time, on the Expiration Date shall expire and all rights of the
Holders of such Warrants shall terminate. Additionally, pursuant to Section
4.1(i)(ii) hereof, the Warrants may expire and all rights of the Holders of such
Warrants shall terminate in the event Newco merges or consolidates with, or
sells all or substantially all of its property and assets to, a Person (other
than an Affiliate of Newco) if the consideration payable to holders of Common
Shares in exchange for their Common Shares in connection with such merger,
consolidation or sale consists solely of cash or in the event of the
dissolution, liquidation or winding up of Newco.
(b) In the event a Holder exercises its Warrants at a time
when the Registration Statement is not effective and available, such Holder must
furnish to the Warrant Agent and Newco such certifications, legal opinions or
other information as either of them may reasonably require to confirm that such
exercise is being made pursuant to an exemption from the registration
requirements of the Securities Act.
Section 3.3. Method of Exercise; Payment of Exercise
Price. In 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 set forth in
Section 12.5 hereof, with the Subscription Form set forth in 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 property issuable
upon exercise of the Warrants as to which a Warrant is exercised; such payment
may be made (x) in the form of cash or by certified or official bank check
payable to the order of Newco or (y) as permitted pursuant to the proviso in
Section 3.1. All payments received upon exercise of Warrants shall be delivered
to Newco by the Warrant Agent as instructed in writing by Newco. 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 Newco 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 exercise of any Warrants following surrender
of a Warrant Certificate in conformity with the foregoing provisions, the
Warrant Agent shall instruct Newco to transfer promptly to or upon the written
order of the Holder of such Warrant Certificate appropriate evidence of
ownership of any Common Shares or other securities or property (including money)
to which it is entitled, 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 and any other securities or property (including money) to the Person
or Persons entitled to receive the same, together with 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 or other securities or property other than to the
registered owner of such Warrants. Upon 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 12.11, if applicable) for the necessary number of shares to
which the Holder of the Warrant or Warrants may be entitled. 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 of this Agreement,
the Person entitled to receive any Common Shares or other securities or property
deliverable upon such exercise shall, as between such Person and Newco, be
deemed to be the Holder of such Common Shares or other securities or property 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 money, Common
Shares or other securities or property to which he would have been entitled had
he been the record holder on such date. Without limiting the foregoing, if, at
the date referred to above, the transfer books for the Common Shares or other
securities purchasable upon the exercise of the Warrants shall be closed, the
certificates for the Common Shares or securities in respect of which such
Warrants are then exercised shall be issuable as of the date on which such books
shall next be opened, and until such date Newco shall be under no duty to
deliver any certificate for such Common Shares or other securities; provided
further that the transfer books or records, unless required by law, shall not be
closed at any one time for a period longer than 20 days.
Section 3.4. Repurchase Offers. (a) Notice of Repurchase
Event. Within five Business Days following the occurrence of a Repurchase Event,
Newco shall give notice (a "Repurchase Notice") to all Holders of the Warrants
and the Warrant Agent that such event has occurred.
(b) Repurchase Offers Generally. Following the occurrence
of a Repurchase Event, Newco shall offer to repurchase for cash all outstanding
Warrants pursuant to the provisions of this Section 3.4 (a "Repurchase Offer").
Newco shall give notice of a Repurchase Offer in accordance with Section 3.4(f)
hereof. The date on which Newco gives any such notice with respect to a
Repurchase Offer is referred to as the "Notice Date". The Repurchase Offer shall
commence on the Notice Date for such Repurchase Offer and shall expire at 5:00
p.m., New York City time, on a date determined by Newco (the "expiration date")
that is at least 30 but not more than 60 calendar days after the Notice Date.
Once a Repurchase Event has occurred, there is no limit on the number of
Repurchase Offers that Newco may make.
(c) Repurchase Offers. (i) In any Repurchase Offer, Newco
shall offer to purchase for cash at the Repurchase Price (as defined below) all
Warrants outstanding on the Notice Date for such Repurchase Offer that are
properly tendered to the Warrant Agent on or prior to the expiration date for
such Repurchase Offer.
(ii) Each Holder may, but shall not be obligated to,
accept such Repurchase Offer by tendering to the Warrant Agent, on or prior to
the expiration date for such Repurchase Offer, the Warrant Certificates
evidencing the Warrants such Holder desires to have repurchased in such offer,
together with a completed Certificate for Surrender in substantially the form
attached to the Warrant Certificate. A Holder may withdraw all or a portion of
the Warrants tendered to the Warrant Agent at any time prior to the expiration
date for such Repurchase Offer. If less than all the Warrants represented by a
Warrant Certificate shall be tendered, such Warrant Certificate shall be
surrendered and a new Warrant Certificate of the same tenor and for the number
of Warrants which were not tendered shall be executed by Newco 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; provided that the Holder of such Warrants
shall be responsible for the payment of any transfer taxes required as the
result of any change in ownership of such Warrants.
(d) Repurchase Price. (i) The purchase price (the
"Repurchase Price") for each Warrant properly tendered to the Warrant Agent
pursuant to a Repurchase Offer shall be
equal to the value (the "Relevant Value") on the Valuation Date of the Common
Shares issuable, and other securities or property which would have been
delivered, upon exercise of Warrants had the Warrants been exercised (regardless
of whether the Warrants are then exercisable), less the Exercise Price then in
effect.
(ii) The Relevant Value of the Common Shares and other
securities or property issuable upon exercise of the Warrants, on any Valuation
Date, shall be:
(1) (A) If the Common Shares (or other securities) are
registered under the Exchange Act, deemed to be the average of the daily
market prices (on the stock exchange that is the primary trading market
for the Common Shares) of the Common Shares (or other securities) for the
20 consecutive trading days immediately preceding such Valuation Date or
(B) if the Common Shares (or other securities) have 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, in the
case of each of (A) and (B), as certified to the Warrant Agent by the
President, any Vice President or the Chief Financial Officer of Newco (the
"Value Certificate"). The Warrant Agent shall have no duty with respect to
the Value Certificate, except to keep it on file and available for
inspection by the Holders and the Warrant Agent shall have no duty or
responsibility in determining the accuracy or correctness of the
calculations in such certificate. 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 prices on such day, (B) in the case of a security
not then listed or admitted to trading 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 Newco, (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 Newco, 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 not bid and asked prices reported during the 30 days prior to the date
in question, the Relevant Value shall be determined as if the Common
Shares (or other securities) were not registered under the Exchange Act;
or
(2) If the Common Shares (or other securities) are not
registered under the Exchange Act or if the value cannot be computed under
clause (1) above, deemed to be
equal to the value set forth in the Value Report (as defined below) as
determined by an Independent Financial Expert, which shall be selected by
the Board of Directors of Newco in accordance with Section 3.4(e) hereof,
and retained on customary terms and conditions, using one or more
valuation methods that the Independent Financial Expert, in its best
professional judgment, determines to be most appropriate but without
giving effect to any discount for lack of liquidity, the fact that Newco
has no class of equity securities registered under the Exchange Act or the
fact that the Common Shares and other securities or property issuable upon
exercise of the Warrants represent a minority interest in Newco. Newco
shall cause the Independent Financial Expert to deliver to Newco, with a
copy to the Warrant Agent, within 45 days of the appointment of the
Independent Financial Expert in accordance with Section 3.4(e) hereof, a
value report (a "Value Report") stating the Relevant Value of the Common
Shares and other securities or property, 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
Relevant Value was made. The Warrant Agent shall have no duty with respect
to the Value Report of any Independent Financial Expert, except to keep it
on file and available for inspection by the Holders and the Warrant Agent
shall have no duty or responsibility in determining the accuracy or
correctness of the calculations in such report. The determination as to
Relevant Value in accordance with the provisions of this Section 3.4(d)
shall be conclusive on all Persons. The Independent Financial Expert shall
consult with management of Newco in order to allow management to comment
on the proposed Relevant Value prior to delivery to Newco of any Value
Report of the Independent Financial Expert.
(e) Selection of Independent Financial Expert. If clause
(d)(ii)(2) is applicable, the Board of Directors of Newco shall select an
Independent Financial Expert not more than five Business Days following a
Repurchase Event. Within two calendar days after such selection of the
Independent Financial Expert, Newco shall deliver to the Warrant Agent a notice
setting forth the name of such Independent Financial Expert.
(f) Notice of Repurchase Offer. Each notice of a
Repurchase Offer (an "Offer Notice") given by Newco pursuant to Section 3.4(b)
shall (i) be given by Newco directly to all Holders of the Warrants, with a copy
to the Warrant Agent; (ii) be given simultaneously with the Repurchase Notice
(or, in the event that the Relevant Value of the Common Shares or other
securities or property issuable upon exercise of all the Warrants cannot be
determined pursuant to Section 3.4(d)(ii)(1), then such Offer Notice shall be
given within five Business Days after Newco receives the Value Report with
respect to such offer); and (iii) specify (A) the expiration date for such
Repurchase Offer, (B) the manner in which Warrants may be surrendered to the
Warrant Agent for repurchase by Newco, (C) the Repurchase Price at which the
Warrants will be repurchased by Newco, (D) if applicable, the name of the
Independent Financial Expert whose valuation of the Common Shares or other
securities or property was utilized in connection with determining such
Repurchase Price and (E) that payment of the Repurchase Price will be
made by the Warrant Agent. Each such notice shall be accompanied by a
Certificate for Surrender for Repurchase Offer in substantially the form
attached to the Warrant Certificate and a copy of the Value Report, if any.
(g) Payment for Warrants. Upon surrender for repurchase of
any Warrants in conformity with the provisions of this Section 3.4, the Warrant
Agent shall thereupon promptly notify Newco of such surrender. Before 10:00
A.M., New York City time, on the expiration date for any Repurchase Offer, Newco
shall deposit with the Warrant Agent funds sufficient to make payment for the
Warrants tendered to the Warrant Agent and not withdrawn. After receipt of such
deposit from Newco, the Warrant Agent shall make payment, by delivering a check
in such amount as is appropriate, to such Person or Persons as it may be
directed in writing by the Holder surrendering such Warrants, net of any
transfer taxes required to be paid in the event payment is made to a Person
other than the Holder.
(h) Compliance with Laws. Notwithstanding anything
contained in this Section 3.4, if Newco is required to comply with laws or
regulations in connection with making
any Repurchase Offer, such laws or regulations shall govern the making of such
Repurchase Offer.
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) Stock Dividends; Stock Splits; Reverse Stock Splits;
Reclassifications. In the event Newco shall (i) declare or pay a dividend or
make any other distribution with respect to its Common Shares in shares of any
class or series of its capital stock, (ii) subdivide its outstanding Common
Shares, (iii) combine its outstanding Common Shares into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
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)), the number of Common Shares purchasable upon exercise of each Warrant
immediately prior to the record date for such dividend or distribution or the
effective date of such subdivision, or combination or reclassification shall be
adjusted so that the Holder of each Warrant shall thereafter be entitled to
receive the kind and number of Common Shares or other securities of Newco 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 (with any
record date requirement being deemed to have been satisfied). 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 the event Newco shall
issue rights, options, warrants or convertible or exchangeable securities (other
than a convertible or exchangeable security 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 (determined in the case of such rights, options,
warrants or convertible or exchangeable securities, by dividing (x) the total
amount receivable by Newco in consideration of the issuance of such rights,
options, warrants or convertible or exchangeable securities, if any, plus the
total consideration payable to Newco upon exercise, conversion or exchange
thereof, by (y) the total number of Common Shares covered by such rights,
options, warrants or convertible or exchangeable securities) which is lower (at
the record date for such issuance) than the then Current Market Value per Common
Share, 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 each Warrant by a fraction, the
numerator of which shall be the number of Common Shares outstanding immediately
prior to the issuance of such rights, options, warrants or convertible or
exchangeable securities plus the number of additional Common Shares offered for
subscription or purchase or issuable upon conversion or exchange, and the
denominator of which shall be the number of Common Shares outstanding
immediately prior to the issuance of such rights, options, warrants or
convertible or exchangeable securities plus the number of shares which the
aggregate offering price of the total number of Common Shares so offered would
purchase at the then Current Market Value per Common Share. Such 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 the
event Newco shall sell and issue any Common Shares or Right (excluding (i) any
Right issued in any of the transactions described in Section 4.1(a) or (b)
above, (ii) any 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 Right issued as consideration when any corporation or business is
acquired, merged into or becomes part of Newco or a subsidiary of Newco in an
arm's-length transaction between Newco and a Person other than an Affiliate of
Newco) at a price per Common Share (determined in the case of such Right, by
dividing (x) the total amount receivable by Newco in consideration of the sale
and issuance of such Right, plus the total consideration payable to Newco 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 Newco therefor shall be deemed to be the consideration received by
Newco for such Right, plus the consideration or premiums stated in such Right to
be paid for the Common Shares covered thereby. In case Newco shall sell and
issue Common Shares or any Right, for a consideration consisting, in whole or in
part, of property other than cash or its equivalent, then in determining the
"price per Common Share" and the "consideration received by Newco" for purposes
of the first sentence of this Section 4.1(c), the Board of Directors of Newco
shall determine, in good faith, the fair value of said property, which
determination shall be evidenced by a resolution of the Board of Directors of
Newco. In case Newco 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 Newco" for purposes
of the first sentence of this Section 4.1(c), the Board of Directors of Newco
shall determine, in good faith, the fair value of the Right then being sold as
part of such unit, which determination shall be evidenced by a resolution of the
Board of Directors of Newco. 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.
(d) Distributions of Debt, Assets, Subscription Rights or
Convertible Securities. In the event Newco shall fix a record date for the
making of a distribution to all holders of its Common Shares of evidences of its
indebtedness, assets, cash dividends or distributions (excluding dividends or
distributions referred to in Section 4.1(a) above and excluding distributions in
connection with the dissolution, liquidation or winding up of Newco which will
be governed by Section 4.1(j)(ii) below) or securities (excluding those referred
to in Section 4.1(a), Section 4.1(b) or Section 4.1(c) above), 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 Directors of Newco) of the
portion of the assets, evidence of indebtedness, cash dividends or distributions
or securities so distributed applicable 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) Self-Tenders. In case of the consummation of an issuer
bid or a tender or exchange offer (other than an odd-lot tender offer or a
normal course issuer bid) made by Newco or any subsidiary of Newco for all or
any portion of the Common Shares to the extent that the cash and value of any
other consideration included in such payment per Common Share exceeds the
Current Market Price per share of Common Shares on the trading day next
succeeding the Expiration Time (as defined below), the Exercise Price shall be
reduced so that the same shall equal the price determined by multiplying the
Exercise Price in effect immediately prior to the last time tenders or exchanges
were made pursuant to such issuer bid or tender or exchange offer (the
"Expiration Time") by a fraction of which the numerator shall be the number of
Common Shares outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the Current Market Price of the Common Shares on
the trading day next succeeding the Expiration Time, and the denominator shall
be the sum of (A) the fair market value (determined by the Board of Directors of
Newco, whose determination shall be conclusive and described in a resolution of
the Board of Directors) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the issuer
bid or tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as the Expiration Time (the shares deemed so accepted, up to any
such maximum, as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (B) the
product of the number of Common Shares outstanding (less any Purchased Shares)
on the Expiration Time and the Current Market Price of the Common Shares on the
trading day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
(f) 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, 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 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 Newco upon such exercise plus the
consideration, if any, actually received by Newco for issuance, sale or grant of
all such rights, options, warrants or conversion or exchange rights whether or
not exercised; provided that no such readjustment shall have the effect of
increasing the Exercise Price by an amount, or decreasing the number of shares
issuable upon exercise of each Warrant by a number, in excess of the
amount or number of the adjustment initially made in respect to the issuance,
sale or grant of such rights, options, warrants or conversion or exchange
rights.
(g) 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 Expert selected by Newco in accordance with the criteria for
such valuation set out in Section 4.1(l), or (2) if no such determination
shall have been made within such six-month period or if Newco so chooses,
determined as of such date by an Independent Financial Expert selected by
Newco in accordance with the criteria for such valuation set out in
Section 4.1(l), 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 prices on such day on the principal national
securities exchange on which such security is listed or admitted, as
determined by the Board of Directors of Newco, in good faith, (B) in the
case of a security not then listed or admitted to trading 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 Newco, (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 Newco, 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.
(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 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
$.0001) 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.
(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 Newco with,
or merger of Newco with or into, or of the sale of all or substantially
all of the properties and assets of Newco to, any Person, and in
connection therewith consideration is payable to holders of Common Shares
(or other securities or property purchasable upon exercise of Warrants) 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
the number of shares of capital stock or other securities or property
(including cash) of Newco, or of such Person resulting from such
consolidation or surviving such merger or to which such sale shall be
made, as the case may be, that would have been distributable or payable on
account of the Common Shares (or other securities or property purchasable
upon exercise of Warrants) 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 of
Directors of Newco in good faith so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or any property
thereafter deliverable on the exercise of the Warrants.
(ii) Notwithstanding the foregoing, (x) if Newco
merges or consolidates with, or sells all or substantially all of its
property and assets to, another Person (other than an Affiliate of Newco)
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 Newco, 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.
Notwithstanding the foregoing, if Newco has made, or is required to make,
a Repurchase Offer pursuant to Section 3.4 hereof and such Repurchase
Offer has not expired at the time of such transaction, the Holders of the
Warrants shall be entitled to receive the higher of (i) the amount payable
to the holders of the Warrants as described in the preceding sentence and
(ii) the Repurchase Price payable to the Holders of the Warrants pursuant
to such Repurchase Offer. 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 event of any dissolution,
liquidation or winding up of Newco, Newco 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 Newco 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) In addition to the foregoing adjustments, the Board of
Directors of Newco may make any other adjustment to increase the number of
Common Shares issuable upon exercise of Warrants or to decrease the Exercise
Price as it may, in good faith, deem desirable to protect the rights and
benefits of Holders.
(l) If required pursuant to Section 4.1(g)(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 Expert,
which shall be selected by the Board of Directors of Newco, and retained on
customary terms and conditions, using one or more valuation methods that the
Independent Financial Expert, in its best professional judgment, determines to
be most appropriate. Newco shall cause the Independent Financial Expert to
deliver to Newco, with a copy to the Warrant Agent, within 45 days of the
appointment of the Independent Financial Expert, a value report (the "Value
Report") stating the value of the Common Shares and other securities or property
of Newco, 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 Expert, except to
keep it on file and available for inspection by the Holders and the Warrant
Agent shall have no duty or responsibility in determining the accuracy or
correctness of the calculations in such report. The determination as to value in
accordance with the provisions of this Section 4.1(l) shall be conclusive on all
Persons. The Independent Financial Expert shall consult with
management of Newco in order to allow management to comment on the proposed
value prior to delivery to Newco of any Value Report of the Independent
Financial Expert.
Section 4.2. Notice of Adjustment. Whenever the number of
Common Shares or other stock or property purchasable upon the exercise of each
Warrant or the Exercise Price is adjusted, as herein provided, Newco shall cause
the Warrant Agent promptly to mail, at the expense of Newco, to each Holder
notice of such adjustment or adjustments and shall deliver to the Warrant Agent
a certificate of a firm of independent public accountants selected by the Board
of Directors of Newco (who may be the regular accountants employed by Newco)
setting forth the number of Common Shares or other stock or property 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.
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. 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 or other securities or property purchasable on exercise of the
Warrants, 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 or other
securities or property which may be purchasable on exercise of the Warrants. The
Warrant Agent shall not be responsible for any failure of Newco to make any cash
payment or to issue, transfer or deliver any Common Shares or other securities
or property 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 5:00 p.m., New York City time, on
the Expiration Date, there shall be any (i) consolidation or merger involving
Newco or sale, transfer or other disposition of all or substantially all of
Newco's property, assets or business (except a merger or other reorganization in
which Newco shall be the surviving corporation and holders of Common Shares (or
other securities or property purchasable upon exercise of the Warrants) receive
no consideration in respect of their shares) or (ii) any other transaction
contemplated by Section 4.1(i)(ii) above, then in any one or more of such cases,
Newco shall cause to be mailed to the Warrant Agent and each Holder of a
Warrant, at the earliest practicable time (and, in any event, not less than 20
calendar days before any date set for definitive action), 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 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 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. If any
fraction of an Common Share would, except for the provisions of this Section
4.5, be issuable on the exercise of any Warrant (or specified portion thereof),
Newco shall 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.
ARTICLE V
DECREASE IN EXERCISE PRICE
The Board of Directors of Newco, in its sole discretion,
shall have the right at any time, or from time to time, to decrease the Exercise
Price of the Warrants, such reduction of the Exercise Price to be effective for
a period or periods to be determined by it, but in no event for a period of less
than 30 calendar days. Any exercise by the Board of Directors of Newco of any
rights granted in this Article V must be preceded by a written notice from Newco
to each Holder of the Warrants and to the Warrant Agent setting forth the
reduction in the Exercise Price, which notice shall be mailed at least 30
calendar days prior to the effective date of such decrease in the Exercise
Price. Any reduction of the Exercise Price pursuant to provisions of this
Article V shall not alter or adjust the number of Common Shares or other
securities or property issuable upon the exercise of the Warrants.
ARTICLE VI
LOSS OR MUTILATION
Upon receipt by Newco 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 satisfactory to them and
(in the case of mutilation) upon surrender and cancellation thereof, then, in
the absence of notice to Newco or the Warrant Agent that the Warrants
represented thereby have been acquired by a bona fide purchaser, Newco 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, Newco 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 Newco, 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
AUTHORIZATION AND RESERVATION
OF COMMON SHARES
Newco shall at all times reserve and keep available for
issue upon the exercise of Warrants such number of its authorized but unissued
Common Shares or other securities of Newco 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 or other
securities of Newco to be delivered to the Warrant Agent upon its request for
delivery upon the exercise of Warrants, and all such Common Shares will, at all
times, be duly approved for listing subject to official notice of issuance on
each securities exchange, if any, on which such Common Shares are then listed.
Newco covenants that all Common Shares or other securities of Newco 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 nonassessable, and free from preemptive or similar rights (other than those
validly and effectively waived) and all taxes, liens, charges and security
interests.
ARTICLE VIII
WARRANT HOLDERS
Section 8.1. Warrant Holder Not Deemed a Stockholder.
Newco 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 Newco nor the
Warrant Agent shall be affected by any notice to the contrary. Prior to the
exercise of the Warrants, no Holder of a Warrant Certificate, as such, shall be
entitled to any
rights of a stockholder of Newco, including, without limitation, the right to
vote or to consent to any action of the stockholders, to receive dividends or
other distributions, to exercise any preemptive right or to receive any notice
of meetings of stockholders and, except as otherwise provided in this Agreement,
shall not be entitled to receive any notice of any proceedings of Newco.
Section 8.2. 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, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against Newco
suitable to enforce, or otherwise in respect of, his right to exercise his
Warrants in the manner provided in the Warrant Certificate representing his
Warrants and in this Agreement.
ARTICLE IX
REMEDIES
Section 9.1. Defaults. It shall be deemed to be a
"Default" with respect to Newco's (or its successor's) obligations under this
Agreement if:
(a) a Repurchase Event occurs and Newco (or its successor)
shall fail to make a Repurchase Offer pursuant to Section 3.4 hereof; or
(b) Newco (or its successor) shall fail to purchase the
Warrants pursuant to the Repurchase Offer in accordance with the provisions of
Section 3.4 hereof.
Section 9.2. Payment Obligations. Upon the happening of a
Default under this Agreement, Newco shall be obligated to increase the amount
otherwise payable pursuant to Section 3.4(d) hereof in respect of the Repurchase
Offer to which such Default relates by an amount equal to interest thereon at a
rate per annum equal to [__]% from the date of the Default to the date of
payment, which interest shall compound quarterly (all such payment obligations
in respect of such Repurchase Offer, together with all such increased amounts,
being the "Repurchase Obligation").
Section 9.3. Remedies; No Waiver. Notwithstanding any
other provision of this Warrant Agreement, if a Default occurs and is
continuing, the Holders of the Warrants may pursue any available remedy to
collect the Repurchase Obligation or to enforce the performance of any provision
of this Warrant Agreement. A delay or omission by any Holder of a Warrant in
exercising, or a failure to exercise, any right or remedy arising out of a
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Default. All remedies are cumulative to the extent permitted
by law.
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 Newco
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 securities or other property delivered upon
exercise or repurchase of any Warrant, or as to the accuracy of the computation
of the Exercise Price or the number or kind or amount of stock or other
securities or other property deliverable upon exercise or repurchase of any
Warrant, or as to the independence of any Independent Financial Expert or the
correctness of the representations of Newco made in the certificates that the
Warrant Agent receives. The Warrant Agent shall not be accountable for the use
or application by Newco 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 shares or
other securities or any property receivable by Holders upon the exercise or
repurchase 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 Newco 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 or willful misconduct.
The Warrant Agent is hereby authorized to accept instructions with respect to
the performance of its duties hereunder from the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer or the Secretary or
Treasurer of Newco 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 Newco 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 in the selection and in the continued employment 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 satisfaction, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without such indemnity.
The Warrant Agent shall promptly notify Newco in writing of any claim made or
action, suit or proceeding instituted against it arising out of or in connection
with this Agreement.
Newco 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 Newco
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 Newco),
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 Newco 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. Newco agrees
promptly to pay the Warrant Agent from time to time, on demand of the Warrant
Agent, compensation for its services hereunder as Newco and the Warrant Agent
may agree from time to time, and to reimburse it for reasonable expenses and
counsel fees incurred in connection with the execution and administration of
this 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, including
the costs and expenses of investigating or defending any claim of such
liability, except that Newco shall have no liability hereunder to the extent
that any such loss, liability or expense results from the Warrant Agent's own
gross negligence or willful misconduct. The obligations of Newco under this
Section shall survive the exercise and the expiration of the Warrants and the
resignation or removal of the Warrant Agent.
Section 10.4. No Restrictions on Actions. The Warrant
Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities of Newco or
become pecuniarily interested in transactions in
which Newco may be interested, or contract with or lend money to Newco or
otherwise act 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 Newco 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 and liabilities hereunder (except liability arising as a
result of the Warrant Agent's own gross negligence or willful misconduct), after
giving one month's prior written notice to Newco. Newco may 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, except as
aforesaid. Newco shall cause to be mailed to each Holder of a Warrant a copy of
said notice of resignation or notice of removal, as the case may be. Upon such
resignation or removal Newco shall appoint in writing a new warrant agent. If
Newco 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 Warrant Agent or the
Holder of any Warrant may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Pending appointment of a successor to the
original Warrant Agent, either by Newco or by such a court, the duties of the
Warrant Agent shall be carried out by Newco. Any new warrant agent, whether
appointed by Newco 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, 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 Newco 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, Newco shall file notice thereof with the resigning or
removed Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to each Holder of a Warrant. 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.
Section 10.6. Successor Warrant Agent. Any corporation
into which the Warrant Agent or any new warrant agent may be merged, or any
corporation resulting from any consolidation to which the Warrant Agent or any
new warrant agent shall be a party, shall be a successor Warrant Agent under
this Agreement without any further act, provided that such corporation would be
eligible for appointment as 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
REGISTRATION
Section 11.1. Effectiveness and Availability of
Registration Statement. (a) Newco shall use its best efforts to maintain the
effectiveness of the registration statement covering the issuance of the
Underlying Securities (the "Registration Statement") until the earlier of (i)
such time as all Warrants have been exercised and (ii) [__________], 2007. Prior
to filing any amendment to the Registration Statement, Newco shall provide a
copy thereof to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its counsel and afford them a reasonable time
to comment thereon. Newco will furnish the Warrant Agent with current
prospectuses meeting the requirements of the Securities Act and the rules and
regulations of the Commission thereunder in sufficient quantity to permit the
Warrant Agent to deliver, at Newco's expense, a prospectus to each Holder of a
Warrant upon the exercise thereof. Newco shall promptly inform the Warrant Agent
of any change in the status of the effectiveness or availability of the
Registration Statement.
(b) Newco shall use its best efforts to register the
Underlying Securities on the Nasdaq Stock Market by [__________], 1997.
Section 11.2. Suspension. Notwithstanding the foregoing,
during any consecutive 365-day period, Newco shall have the privilege to suspend
availability of the Registration Statement for up to two 15-consecutive-day
periods, except during the 30-day period immediately prior to the Expiration
Date, if Newco's Board of Directors determines in good faith that there is a
valid business purpose for such suspension and provides notice of such
determination to the Holders at their addresses appearing in the register of
Warrants maintained by the Warrant Agent.
Section 11.3. Blue Sky. Newco shall use its best efforts
to register or qualify the Underlying Securities under all applicable securities
or "blue sky" laws of all jurisdictions in the United States and Canada and
shall use its best efforts to maintain such registration or qualification
through the earlier of the date upon which all Warrants have been exercised and
[__________], 2007; provided, however, that Newco shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise
be required to qualify but for this Section 11.3, (ii) file any general consent
to service of process or (iii) subject itself to taxation in any jurisdiction if
it is not otherwise so subject.
Section 11.4. Accuracy of Disclosure. Newco represents and
warrants to each Holder and agrees for the benefit of each Holder that (i) the
Registration Statement and the documents incorporated by reference therein will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading; and (ii) the
prospectus delivered to such Holder upon its exercise of Warrants and the
documents incorporated by reference therein will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 11.5. Indemnity. Newco hereby indemnifies each
beneficial owner of a Warrant (whether or not it is, at the time the indemnity
provided for in this Section 11.5 is sought, such a beneficial owner) against
all losses, damages or liabilities which such beneficial owner suffers as a
result of any breach, on the date of any exercise of a Warrant by such
beneficial owner, of the representations, warranties or agreements contained in
Section 11.4.
Section 11.6. Expenses. All expenses incident to Newco's
performance of or compliance with its obligations under this Agreement will be
borne by Newco, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all Commission, stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws, (iii) all expenses of any Persons incurred by or
on behalf of Newco in preparing or assisting in preparing, word processing,
printing and distributing any registration statement, any prospectus, any
amendments or supplements thereto and other documents relating to the
performance of and compliance with this Agreement, (iv) the fees and
disbursements of the Warrant Agent, (v) the fees and disbursements of counsel
for Newco and the Warrant Agent and (vi) the fees and disbursements of the
independent public accountants of Newco, including the expenses of any special
audits or "cold comfort" letters required by or incident to such performance and
compliance.
Section 11.7. Additional Acts. If the issuance or sale of
any Common Shares or other securities issuable upon the exercise of the Warrants
require registration or approval of any governmental authority (other than the
registration requirements under the Securities Act), or the taking of any other
action under the laws of the United States of America or any political
subdivision thereof before such securities may be validly offered or sold in
compliance with such laws, then Newco covenants that it will, in good faith and
as expeditiously as reasonably practicable, endeavor to secure and maintain such
registration or approval or to take such other action, as the case may be.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Money Deposited with the Warrant Agent. The
Warrant Agent shall not be required to pay interest on any moneys deposited
pursuant to the provisions of this Agreement except such as it shall agree in
writing with Newco to pay thereon. Any moneys, securities or other property
which at any time shall be deposited by Newco 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
moneys, securities or other property shall have been deposited; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. Any money, securities or
other property deposited with the Warrant Agent for payment or distribution to
the Holders that remains unclaimed for two years after the date the money,
securities or other property was deposited with the Warrant Agent shall be
delivered to Newco upon its request therefor.
Section 12.2. Payment of Taxes. All Common Shares or other
securities issuable upon the exercise of Warrants shall be validly issued, fully
paid and not subject to any calls for funds, and Newco 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 or of other securities
deliverable upon exercise of Warrants or in respect of any Repurchase Offer
(other than income taxes imposed on the Holders). Newco 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 or other securities
or property issuable upon the exercise of the Warrants or in respect of a
Repurchase Offer or payment of cash to any Person other than the Holder of a
Warrant Certificate surrendered upon the exercise or repurchase of a Warrant and
in case of such transfer or payment, the Warrant Agent and Newco shall not be
required to issue any stock certificate or pay any cash until such tax or charge
has been paid or it has been established to the Warrant Agent's and Newco's
satisfaction that no such tax or charge is due.
Section 12.3. No Merger, Consolidation or Sale of Assets
of Newco. Except as otherwise provided herein, Newco 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 Newco, unless
the Person resulting from such merger or consolidation, or such successor of
Newco, 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 to be performed and observed by Newco.
Section 12.4. Reports to Holders. Newco shall file with
the Commission the annual, quarterly and other reports required by Section
13(a), 13(c) or 15(d) of the Exchange
Act, regardless of whether such Sections of the Exchange Act are applicable to
Newco, and shall, at its expense, provide copies of such reports to each Holder,
without cost to such Holder, and the Warrant Agent within seven days after the
date it would have been required to file such reports or other information with
the Commission had it been subject to such sections.
Section 12.5. Notices. (a) Except as otherwise provided in
Section 12.5(b) 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 Newco maintained by the
Warrant Agent and to Newco or the Warrant Agent as follows:
To Newco:
Orion Newco Services, Inc.
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Attention: [Chief Financial Officer]
To the Warrant Agent:
Bankers Trust Company
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Attention: Corporate Trust and Agency Group
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 when mailed,
whether or not the Holder receives the notice.
(b) Any notice required to be given by Newco to the
Holders pursuant to Section 3.4(b) hereof 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. Newco hereby
irrevocably authorizes the Warrant Agent, in the name and at the expense of
Newco, to mail any such notice upon receipt thereof from Newco. 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 12.6. Governing Law. This Agreement shall be
governed by the laws of the State of New York.
Section 12.7. Binding Effect. This Agreement shall be
binding upon and inure to the benefit of Newco 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 Newco, 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 12.8. 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 12.9. Amendments. The Warrant Agent may, without
the consent or concurrence of the Holders of the Warrants, by supplemental
agreement or otherwise, join with Newco 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 Newco in
this Agreement further covenants and agreements of Newco thereafter to be
observed, or surrender any rights or power reserved to or conferred upon Newco
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. Amendments or supplements which do not
meet the requirements of the preceding sentence shall require the written
consent of the Holders of a majority of the then outstanding Warrants; provided,
however, that the consent of each Holder is required for any amendment or
supplement pursuant to which the Exercise Price would be increased or the number
of Common Shares purchasable upon exercises of Warrants would be decreased
(other than pursuant to adjustments as provided in Article IV of this
Agreement).
Section 12.10. 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 12.11. Common Shares Legend. In the event a Holder
exercises its Warrants at a time when the Registration Statement is not
effective and available pursuant to an exemption from the registration
requirements of the Securities Act, any Common Shares or other securities of
Newco issuable upon exercise of such Warrants shall bear the following legend:
THE COMMON SHARES [OR OTHER SECURITIES] EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES
ACT") AND ACCORDINGLY MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES THAT (1) IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO THE TRANSFER OF THE
COMMON SHARES [OR OTHER SECURITIES] EVIDENCED HEREBY, RESELL OR OTHERWISE
TRANSFER THE COMMON SHARES [OR OTHER SECURITIES] EVIDENCED HEREBY EXCEPT
(A) TO NEWCO OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE REGISTRAR A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE COMMON SHARES [OR OTHER SECURITIES] EVIDENCED HEREBY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE REGISTRAR) AND, IF REQUESTED BY
NEWCO, AN OPINION OF COUNSEL ACCEPTABLE TO NEWCO THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (F) AFTER REGISTRATION UNDER THE
SECURITIES ACT AND (2) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON
SHARES [OR OTHER SECURITIES] EVIDENCED HEREBY ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Section 12.12. Third Party Beneficiaries. The Holders
shall be third party beneficiaries to the agreements made hereunder between
Newco, 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.
Section 12.13. Submission to Jurisdiction; Appointment of
Agent for Service. By the execution and delivery of this Agreement, Newco (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed [NAME AND ADDRESS OF AGENT] (together with any successor, the
"Authorized Agent"), as its authorized agent upon which process may be served in
any suit or proceeding arising out of or relating to this Agreement, the
Warrants or the Underlying Securities that may be instituted in any federal or
state court in the State of New York, Borough of
Manhattan, or brought under federal or state securities laws, and acknowledges
that the Authorized Agent has accepted such designation, (ii) submits to the
non-exclusive jurisdiction of any such court in any such suit or proceeding, and
waives any objection which it may now or hereafter have to the laying of venue
of any such proceeding or any claim of inconvenient forum and (iii) agrees that
service of process upon the Authorized Agent and written notice of said service
to Newco (mailed or delivered to [its Chief Financial Officer] at the address
provided in Section 12.5, shall be deemed in every respect effective service of
process upon Newco in any such suit or proceeding. Newco further agrees to take
any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of the Authorized Agent in full force and effect so long as any of
the Warrants or Underlying Securities shall be outstanding.
To the extent that Newco has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed, as of the day and year first above written.
ORION NEWCO SERVICES, INC.
By:
-----------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as Warrant Agent
By:
-----------------------------------
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[THE WARRANTS EVIDENCED BY THIS CERTIFICATE WERE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF SENIOR NOTE UNITS (CUSIP NO. [______]) AND SENIOR DISCOUNT NOTE
UNITS (CUSIP NO. [_______]), EACH SENIOR NOTE UNIT OF WHICH CONSISTS OF
$[_______] PRINCIPAL AMOUNT OF [__]% SENIOR NOTES DUE 2007 OF NEWCO (THE "SENIOR
NOTES") AND A WARRANT, AND EACH SENIOR DISCOUNT NOTE UNIT OF WHICH CONSISTS OF
$[_____] PRINCIPAL AMOUNT AT MATURITY OF SENIOR DISCOUNT NOTES DUE 2007
(TOGETHER WITH THE SENIOR NOTES, THE "NOTES") AND A WARRANT. PRIOR TO THE CLOSE
OF BUSINESS UPON THE EARLIEST OF (I) THE DATE THAT IS SIX MONTHS AFTER THE
CLOSING DATE, (II) SUCH DATE AS THE UNDERWRITERS MAY, IN THEIR DISCRETION, DEEM
APPROPRIATE AND (III) THE DATE NEWCO MAILS NOTICE OF AN OFFER TO REPURCHASE THE
NOTES TO HOLDERS OF THE NOTES PURSUANT TO THE INDENTURES, THE WARRANTS EVIDENCED
BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY
BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.]*
[UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO NEWCO OR THE WARRANT AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR REPURCHASE 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 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 II OF THE WARRANT AGREEMENT.]**
-----------------------------
* To be included on Warrants issued prior to the Separation Date.
** To be included on any Global Warrant.
▇-▇
▇▇▇▇▇ ▇▇▇▇▇ SERVICES, INC.
No. _____ CUSIP No. [_______]
WARRANTS TO PURCHASE COMMON SHARES
This certifies that _____________, or its registered assigns,
is the owner of the number of Warrants set forth above, each of which represents
the right to purchase, after [_____], 1997, from ORION NEWCO SERVICES, INC., a
Delaware corporation ("Newco"), one share of common stock, par value $.01 per
share (collectively, the "Common Shares"), of Newco at the purchase price (the
"Exercise Price") of $[___] per Common Share (subject to adjustment as provided
in the Warrant Agreement hereinafter referred to), upon surrender hereof at the
office of Bankers Trust Company or to its successor as the warrant agent under
the Warrant Agreement hereinafter referred to (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 cash or by certified or official bank or bank
cashier's check payable to the order of Newco, or by the surrender of Warrants
having an aggregate Spread (as defined in the Warrant Agreement) equal to the
Exercise Price of the Warrants being exercised) of the purchase price for the
share(s) as to which the Warrant(s) represented by this Warrant Certificate are
exercised, all subject to the terms and conditions hereof and of the Warrant
Agreement. Notwithstanding the foregoing, Newco shall have the right to not
allow an exercise of any Warrants in the event the Registration Statement is not
effective and available at the time Warrants are exercised, unless prior to the
exercise of such Warrants, the Holder thereof furnishes to the Warrant Agent and
Newco such certifications, legal opinions or other information as either of them
may reasonably require to confirm that such exercise is being made pursuant to
an exemption from the registration requirements of the Securities Act.
This Warrant Certificate is issued under and in accordance
with a Warrant Agreement dated as of [_______], 1997 (the "Warrant Agreement"),
between Newco and Bankers Trust Company, as Warrant Agent, and is subject 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 Warrant
Agreement is hereby incorporated herein by reference and made a part hereof.
Reference is hereby made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
Newco and the Holders of the Warrants. The summary of the terms of the Warrant
Agreement contained in this Warrant Certificate is qualified in its entirety by
express reference to the Warrant Agreement. All terms used in this Warrant
Certificate that are defined in the Warrant Agreement shall have the meanings
assigned to them in the Warrant Agreement.
A-3
Copies of the Warrant 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:
Bankers Trust Company
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Attention: Corporate Trust and Agency Group
A "Repurchase Event", as defined in the Warrant Agreement,
shall be deemed to occur on any date prior to [________], 2007 when Newco (i)
consolidates or merges into or with another Person (but only where the holders
of Common Shares receive consideration in exchange for all or part of such
Common Shares) if the Common Shares (or other securities) thereafter issuable
upon exercise of the Warrants are not registered under the Exchange Act or (ii)
sells all or substantially all of its assets to another Person if the Common
Shares (or other securities) thereafter issuable upon exercise of the Warrants
is not registered under the Exchange Act; provided that in each case a
"Repurchase Event" will not be deemed to have occurred if the consideration for
the Common Shares in such transaction consists solely of cash.
Following a Repurchase Event, Newco must make an offer to
repurchase all outstanding Warrants (a "Repurchase Offer"). If Newco makes a
Repurchase Offer, Holders may, until the expiration date of such offer,
surrender all or part of their Warrants for repurchase by Newco.
Warrants received by the Warrant Agent in proper form during a
Repurchase Offer will, except as otherwise provided in the Warrant Agreement, be
repurchased by Newco at a price in cash (the "Repurchase Price") equal to the
value on the Valuation Date relating thereto of the Common Shares and other
securities or property which would have been delivered upon exercise of the
Warrants had the Warrants been exercised, less the Exercise Price (whether or
not the Warrants are then exercisable). The value of such Common Shares and
other securities will be (i) if the Common Shares (or other securities) are
registered under the Exchange Act, determined based upon the average of the
closing sales prices of the Common Shares (or other securities) for the 20
consecutive trading days immediately preceding such Valuation Date or, if the
Common Shares (or other securities) have been registered under the Exchange Act
for less than 20 consecutive trading days before such date, then the average of
the closing sales prices for all of the trading days before such date for which
closing sales prices are available or (ii) if the Common Shares (or other
securities) are not registered under the Exchange Act or if the value cannot be
computed under clause (i) above, determined by the Independent Financial Expert
(as defined in the Warrant Agreement), in each case as set forth in the Warrant
Agreement.
The "Valuation Date" with respect to a Repurchase Offer is the
date five Business Days prior to the date notice of such Repurchase Offer is
first given.
A-4
If Newco fails to make or complete a Repurchase Offer (a
"Default") as required by the Warrant Agreement, it shall be obligated to
increase the amount otherwise payable pursuant to the Warrant Agreement in
respect of the Repurchase Offer by an amount equal to interest thereon at a rate
per annum of [__]% from the date of the Default to the date of payment, which
interest shall compound quarterly.
If Newco merges or consolidates with or into, or sells all or
substantially all of its property and assets to, another Person solely for cash,
or in the event of the dissolution, liquidation or winding-up of Newco, 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) or the amount payable
pursuant to an outstanding Repurchase Offer if a Repurchase Offer is then
outstanding or required, if higher.
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 Newco 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 a
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.
As to any final fraction of a share which the same Holder of
one or more Warrants would otherwise be entitled to purchase upon exercise
thereof in the same transaction, Newco shall pay the cash value thereof
determined as provided in the Warrant Agreement.
All Common Shares or other securities issuable by Newco upon
the exercise of Warrants shall be validly issued, fully paid and not subject to
any calls for funds, and Newco shall pay all 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 of such shares or of other securities deliverable upon
exercise of Warrants. Newco 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, and in such case Newco shall not be required
to issue or deliver any stock certificate until such tax or other charge has
been paid or it has been established to the Warrant Agent's and Newco's
satisfaction that no tax or other charge is due.
This Warrant Certificate and all rights hereunder are
transferable by the registered Holder hereof, in whole or in part, on the
register of Newco maintained by the Warrant Agent for such purpose at its office
in New York, New York, upon surrender of this Warrant Certificate duly endorsed,
or accompanied by a written instrument of transfer in form
A-5
satisfactory to Newco 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 upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any partial transfer, Newco will issue and the Warrant Agent will 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, Newco 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.
This Warrant Certificate may be exchanged at the office of the
Warrant Agent maintained for such purpose in New York, New York 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 stockholder of Newco, including, without limitation, the right to vote or
to consent to any action of the stockholders, to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of
meetings of stockholders, and shall not be entitled to receive any notice of any
proceedings of Newco except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights
evidenced hereby shall cease on [________], 2007, unless sooner terminated by
the liquidation, dissolution or winding-up of Newco or as otherwise provided in
the Warrant Agreement upon the consolidation or merger of Newco with, or sale of
Newco to, another Person or unless such date is extended as provided in the
Warrant Agreement.
A-6
This Warrant Certificate shall not be valid for any purpose
until it shall have been countersigned by the Warrant Agent.
Dated:
ORION NEWCO SERVICES, INC.
By:
----------------------
Name:
Title:
Countersigned:
BANKERS TRUST COMPANY,
as Warrant Agent
By:
---------------------
Authorized Signatory
A-7
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant) To:
The undersigned irrevocably exercises ________ of the Warrants
represented by the Warrant Certificate for the purchase of [_____] (subject to
adjustment) Common Shares, par value $.01 per share, of ORION NEWCO SERVICES,
INC. and herewith makes payment of $_______ (such payment being by cash or by
certified or official bank or bank cashier's check payable to the order or at
the direction of Newco, or by the surrender of Warrants having an aggregate
Spread (as defined in the Warrant Agreement) equal to the Exercise Price of the
Warrants being exercised), all at the exercise price and on the terms and
conditions specified in the within Warrant Certificate and the Warrant Agreement
therein referred to, surrenders this Warrant Certificate and all right, title
and interest therein to and directs that 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:
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(Signature of Owner)
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(Street Address)
------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:1
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1 The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act. Securities and/or check
to be issued to: Please insert social security or identifying number: Name:
A-8
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
FORM OF CERTIFICATE FOR SURRENDER FOR REPURCHASE OFFER
(To be executed only upon repurchase
of Warrant by Newco)
To:
The undersigned, having received prior notice of the
consideration for which ORION NEWCO SERVICES, INC. will repurchase the Warrants
represented by the within Warrant Certificate, hereby surrenders this Warrant
Certificate for repurchase by ORION NEWCO SERVICES, INC. of the number of
Warrants specified below for the consideration set forth in such notice.
Dated:
-----------------------------------
(Number of Warrants
to be Repurchased)
-----------------------------------
(Signature of Owner)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:1
-----------------------------------
----------
1 The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act. Securities and/or check
to be issued to: Please insert social security or identifying number: Name:
A-10
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the
within 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 the within Warrant Certificate
not being assigned hereby) all of the right of the undersigned under the within
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.
Dated:
-------------------------------------
(Signature of Owner)
-------------------------------------
(Street Address)
-------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:*
-------------------------------------
----------
1 The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act. Securities and/or check
to be issued to: Please insert social security or identifying number: Name:
APPENDIX A
LIST OF FINANCIAL EXPERTS
-------------------------
[Alex. ▇▇▇▇▇ & Sons
Bear, ▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇▇, Read & Co. Inc.
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇, Sachs & Co.
Lazard Freres & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Inc.
Salomon Brothers Inc
▇▇▇▇▇▇ Brothers]
--------
11 The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act.
11 The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act.
* The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act.