EXHIBIT 4.1
WARRANT AGREEMENT
dated as of September 17, 1997
by and among
UNITED STATES FILTER CORPORATION,
WESTERN FARM & CATTLE COMPANY,
CALIFORNIA LAND & CATTLE COMPANY,
N.N. INVESTORS, L.P.,
ST RANCH GENPAR, INC.,
and
FW RANCH PARTNERS, L.P.
WARRANT AGREEMENT
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WARRANT AGREEMENT, dated as of September 17, 1997, by and among UNITED
STATES FILTER CORPORATION, a Delaware corporation (the "Company"), WESTERN FARM
& CATTLE COMPANY, a California corporation, CALIFORNIA LAND & CATTLE COMPANY, a
California corporation, N.N. INVESTORS, L.P., a Delaware limited partnership, ST
RANCH GENPAR, INC., a Texas corporation, and FW RANCH PARTNERS, L.P., a Texas
limited partnership (collectively, the "Sellers").
W I T N E S S E T H:
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WHEREAS, the Company and the Sellers have entered into an Agreement
for Sale and Purchase of Partnership Interests, dated as of August 3, 1997 (the
"Acquisition Agreement");
WHEREAS, the Company proposes to issue warrants to Sellers
("Warrants") to purchase up to 1,200,000 shares (the "Shares") of common stock,
par value $.01 per share, of the Company (the "Common Stock") at exercise prices
of $50.00 per share of Common Stock for 600,000 Shares and $60.00 per share of
Common Stock for 600,000 Shares (subject to adjustments as hereinafter
provided);
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Acquisition
Agreement) by the Company to Sellers in partial consideration for Sellers' sale
of certain partnership interests under the Acquisition Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Grant. The Sellers are hereby granted the right to
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purchase, at any time after the first contractual sale of water, and the receipt
of monies, funds, assets, debt forgiveness or the like therefor, by the Company
or any Affiliate of the Company or by the IID or another Governmental Body as
trustee or otherwise for the benefit of the Company or any Affiliate of the
Company from Water Rights appurtenant to the Properties of WFLP, California
Farms and FWRLP, as such terms are defined in the Acquisition Agreement, to
occur after September 17, 1997 (the "Closing Date") until 5:30 p.m., New York
time, on September 17, 2007 (the "Exercise Period"), up to 1,200,000 Shares
(subject to adjustment as provided in Section 8 hereof) at exercise prices equal
to $50.00 per Share for 600,000 Shares and $60.00 per Share for 600,000 Shares
(subject to adjustment as provided in Section 8 hereof), all subject to
the terms and conditions of this Agreement. Each Seller shall receive the
Warrants for the number of Shares and at the exercise prices stated on Schedule
I hereto.
Section 2. Warrant Certificates. The warrant certificates (the
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"Warrant Certificates") delivered and to be delivered pursuant to this Agreement
shall be substantially in the form set forth in Exhibit A attached hereto and
made a part hereof, with such appropriate insertions and other variations as
required or permitted by this Agreement. The Warrant Certificates shall further
evidence the purchase rights granted hereby.
Section 3. Exercise of Warrant; Method of Exercise. The purchase
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rights represented by each Warrant Certificate are exercisable at the option of
the Holder (as defined herein) thereof, in whole or in part (but not for less
than 5,000 Shares if exercised in part), at any time or from time to time during
the Exercise Period. Upon surrender of a Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with payment of the Common
Stock Exercise Price (as hereinafter defined), payable to the Company, by
certified or official bank check or wire transfer in New York Clearing House
funds for the Shares purchased, at the Company's principal offices in Palm
Desert, California (currently located at ▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ 92211), the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Shares so purchased. In the case of the purchase of less than all the Shares
purchasable under any Warrant Certificate, the Company, at its expense, shall
cancel said Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the Shares
purchasable thereunder. The Holder shall identify the aggregate principal amount
of Shares for which the Warrant is exercised on the Form of Election to
Purchase.
Section 4. Issuance of Certificates. Upon the exercise of Warrants,
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the issuance of certificates for the Shares and/or other securities, properties
or rights underlying such Warrants shall be made forthwith (and in any event
within five (5) business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof (other than state or federal income taxes), and such
certificates shall (subject to the provisions of Section 7 hereof) be issued in
the name of, or in such names as may be directed by, the Holder thereof;
provided, however, that the Company shall not be required to pay any tax which
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may be payable in respect of any transfer involved in the issuance and delivery
of any such certificates in a name other than that of the Holder thereof and the
Company shall not be required to issue or deliver such certificates unless or
until the individual, partnership, joint venture, limited liability company,
corporation, trust, unincorporated organization, government or department or
agency of a government ("Person") or Persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
and/or other securities, property or rights issuable upon the exercise of
Warrants shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or any Vice President of the Company under its corporate
seal reproduced thereon and by the manual or facsimile signature of the then
present Treasurer or any Assistant Treasurer or Secretary or any Assistant
Secretary of the Company. Warrant Certificates shall be dated the date of
execution by the Company upon initial issuance, division, exchange, substitution
or transfer. Certificates representing the Shares and/or other securities,
property or rights issuable upon exercise of Warrants shall be dated the date on
which the exercise is perfected by the Holder hereof as provided in Section 3
hereof (the "Exercise Date") and any interest bearing securities so issued shall
accrue interest from the Exercise Date.
Section 5. Restriction On Transfer of Warrants. The Holder of a
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Warrant Certificate, by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof. Subject to compliance with all applicable federal and
state securities laws, the Sellers may transfer the Warrants and this Agreement
(i) upon receiving the written consent of the Company or (ii) to any direct or
indirect partner of any Holder or any Affiliate thereof; provided, however, that
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any such transferee shall agree with the Company in writing prior to each such
transfer to be bound by the terms of this Agreement. As used herein,
"Affiliate" shall mean any Person (a) more than 50% of any class of the
outstanding voting securities of which is owned, directly or indirectly, by one
or more Holders and/or one or more Affiliates, or (b) over which one or more
Holders is otherwise able to exert actual control; provided, however, that, for
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purposes of clause (b) of this definition, actual control shall be determined
solely based on whether the Holder has in fact the ability to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.
Section 6. Exercise Price.
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Section 6.1. Initial and Adjusted Exercise Price. The initial
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exercise price of each Warrant for Common Stock shall be the exercise price
stated on the Warrant Certificates issued on the Closing Date, as prepared in
accordance with Schedule I hereto. The adjusted exercise price for Common Stock
shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 8 hereof.
Section 6.2. Exercise Price. The term "Common Stock Exercise Price"
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herein shall mean the initial exercise price for Common Stock hereunder or, if
the initial exercise price has been adjusted pursuant to the terms hereof, the
adjusted exercise price for Common Stock hereunder.
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Section 7. Transfer Restrictions.
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Section 7.1. Registration Under the Securities Act of 1933. The
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Warrants, the Shares and any of the other securities issuable upon exercise of
Warrants have not been registered under the Securities Act of 1933, as amended.
Upon exercise, in part or in whole, of Warrants, the Shares shall be subject to
the restrictions on transfer specified in Article V of the Transfer,
Registration Rights and Governance Agreement among the Company and Sellers dated
September 17, 1997 (the "Transfer Agreement"), and the certificates representing
the Shares shall bear the legends required under Article V of the Transfer
Agreement.
Section 8. Adjustments to Exercise Price and Number of Securities.
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Section 8.1. Computation of Adjusted Exercise Price. Except as
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hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in Section 8.3 or 8.7 hereof), including shares held in the
Company's treasury (but excluding (i) shares issued upon the exercise of any
options, rights or warrants and shares issued upon the direct or indirect
conversion or exchange of securities and (ii) shares issued pursuant to employee
or director benefit plans approved by a majority of the Company's entire Board
of Directors), for a consideration per share less than the Market Price per
share of Common Stock on the date immediately prior to the issuance or sale of
such shares, or without consideration, then forthwith upon such issuance or
sale, the Common Stock Exercise Price shall (until another such issuance or sale
or other event giving rise to an adjustment to the Common Stock Exercise Price
pursuant to this Section 8) be adjusted (calculated to the nearest full cent) by
multiplying the Common Stock Exercise Price in effect immediately prior to such
issuance or sale by the quotient derived by dividing (x) an amount equal to the
sum of (a) the total number of shares of Common Stock outstanding immediately
prior to such issuance or sale plus (b) the number of shares of Common Stock
which the aggregate consideration received by the Company in connection with
such issuance or sale would purchase at such Market Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issuance or
sale; provided, however, that in no event shall the Common Stock Exercise Price
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be adjusted pursuant to this computation to an amount in excess of the Common
Stock Exercise Price in effect immediately prior to such computation, except in
the case of a combination of outstanding shares of Common Stock as provided by
Section 8.3 hereof.
As used herein, the "Market Price" of Common Stock at any date shall
be deemed to be the last reported sale price (expressed as a dollar value per
share) or, in case no such reported sale takes place on such day, the average of
the last reported sale prices for the last three (3) trading days, in either
case as officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading or, if not so listed or admitted,
by the National Association of Securities Dealers Automated Quotation System
("NASDAQ") National
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Market System ("NASDAQ/NMS") or, if not approved for quotation on the
NASDAQ/NMS, the average closing bid price as furnished by the National
Association of Securities Dealers, Inc. (the "NASD") through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information or, if such
security is not quoted on NASDAQ, as determined in good faith by resolution of
the Board of Directors of the Company, based on the best information available
to it.
For the purposes of any computation to be made in accordance with this
Section 8.1, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for
a consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by
the Company for such shares (or, if shares of Common Stock are offered by
the Company for subscription, the subscription price, or, if shares of
Common Stock shall be sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price) before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale of shares of Common Stock
for consideration part or all of which shall be other than cash, the amount
of the consideration therefor other than cash shall be deemed to be the
value of such consideration as determined in good faith by the Board of
Directors of the Company and shall include any amounts payable to security
holders or any affiliates thereof, including without limitation, pursuant
to any employment agreement, royalty, consulting agreement, covenant not to
compete, earned or contingent payment right or similar arrangement,
agreement or understanding, whether oral or written, all such amounts being
valued for the purposes hereof at the aggregate amount payable thereunder,
whether such payments are absolute or contingent, and irrespective of the
period or uncertainty of payment, the rate of interest, if any, or the
contingent nature thereof; provided, however, that if any Holder does not
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agree with such valuation, a mutually acceptable independent appraiser
shall make such valuation, the cost of which shall be borne by the Company.
(iii) Shares of Common Stock issuable by way of dividend or
other distribution on any stock of the Company other than the Common Stock
shall be deemed to have been issued immediately after the opening of
business on the day following the record date for the determination of
stockholders entitled to receive such dividend or other distribution and
shall be deemed to have been issued without consideration.
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(iv) The reclassification of securities of the Company (other
than shares of Common Stock) into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders
entitled to receive such shares, and the value of the consideration
allocable to such shares of Common Stock shall be determined as provided in
subsection (ii) of this Section 8.1.
(v) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof, upon the
exercise of options, rights and warrants and upon the conversion or
exchange of convertible or exchangeable securities.
Section 8.2. Options, Rights, Warrants and Convertible and
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Exchangeable Securities. In case the Company shall at any time after the date
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hereof issue options, rights or warrants to purchase or subscribe for, or
exercisable for, shares of Common Stock, or issue any securities convertible
into or exchangeable for shares of Common Stock, for a consideration per share
less than the Market Price for Common Stock immediately prior to the issuance of
such options, rights, warrants or convertible or exchangeable securities, or
without consideration, the Common Stock Exercise Price in effect immediately
prior to the issuance of such options, rights, warrants or convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of Section
8.1 hereof; provided that:
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(i) The aggregate maximum number of shares of Common Stock, as
the case may be, issuable under such options, rights or warrants shall be
deemed to be issued and outstanding at the time such options, rights or
warrants were issued, and for a consideration equal to the minimum purchase
or subscription price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration (determined in the
same manner as consideration received on the issue or sale of shares in
accordance with the terms of the Warrants), if any, received by the Company
for such options, rights or warrants.
(ii) The aggregate maximum number of shares of Common Stock
issuable upon conversion or exchange of such convertible or exchangeable
securities shall be deemed to be issued and outstanding at the time of
issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on
the issue or sale of shares of Common Stock in accordance with the terms of
the Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or
exchange thereof.
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(iii) If any change shall occur in the purchase or subscription
price per share provided for in any of such options, rights or warrants or
in the conversion or exchange price per share of such securities, such
options, rights, warrants or conversion or exchange rights, as the case may
be, shall be deemed to have expired or terminated on the date when such
price change became effective in respect of shares not theretofore issued
pursuant to the exercise or conversion or exchange thereof, and the Company
shall be deemed to have issued upon such date new options, rights, warrants
or convertible or exchangeable securities at the new purchase,
subscription, conversion or exchange price in respect of the number of
shares issuable upon the exercise of such options, rights or warrants or
the conversion or exchange of such convertible or exchangeable securities.
Section 8.3. Subdivision and Combination. In case the Company shall
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at any time (i) declare a dividend on the Common Stock payable in shares of its
capital stock (including Common Stock), (ii) subdivide or combine the
outstanding shares of Common Stock, or (iii) issue any class of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the Common Stock Exercise Price in
effect immediately prior to the record date for such dividend or the effective
date of such subdivision, combination or reclassification shall forthwith be
proportionately adjusted so that the holder of any Warrant exercised after such
date shall be entitled to receive the aggregate number and kind of capital stock
which, if such Warrant had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, division, subdivision, combination or reclassification.
Section 8.4. Adjustment in Number of Securities. Upon each
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adjustment of the Common Stock Exercise Price pursuant to the provisions of this
Section 8, the number of shares of Common Stock issuable upon exercise at the
adjusted Common Stock Exercise Price of each Warrant shall be adjusted to the
nearest full amount by multiplying a number equal to the Common Stock Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Common Stock
Exercise Price.
Section 8.5. Common Stock. If any class, classes and/or series of
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capital stock is issued in exchange for Common Stock upon conversion thereof or
in lieu thereof in connection with any change in par or stated value,
recapitalization, reorganization or other transaction, such class, classes
and/or series of capital stock shall thereafter be the Common Stock referred to
herein.
Section 8.6. Merger or Consolidation. In case of any consolidation
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or merger of the Company with or into another corporation or other entity (other
than a consolidation or
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merger in which the Company is the continuing corporation and which does not
result in any reclassification or change of the outstanding Common Stock or
other securities issuable upon exercise of Warrants) or in case of any sale or
conveyance to another Person of all or substantially of the assets and the
property of the Company, then, as a condition of such consolidation, merger,
sale or conveyance, the Company, or such successor or purchasing corporation, as
the case may be, shall execute and deliver to the Holder of each Warrant then
outstanding a supplemental warrant agreement providing that such Holder shall
have the right thereafter to receive, upon exercise of such Warrant (until the
expiration of such Warrant) the kind and amount of securities, rights and
property receivable upon such consolidation, merger, sale or conveyance by a
holder of the number of Warrant Securities issuable upon exercise of such
Warrant immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in this Section 8. The above provision of
this subsection shall similarly apply to successive consolidations, mergers,
conveyances and sales.
Section 8.7. No Adjustment of Exercise Price in Certain Cases. No
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adjustment of the Common Stock Exercise Price shall be made:
(i) Upon the issuance or sale of the Warrants, upon exercise of
the Warrants or the issuance of the shares of Common Stock issuable upon
the exercise of the Warrants; or
(ii) If the amount of said adjustment shall be less than one cent
(1 cent) per share; provided, however, that in such case any adjustment
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that would otherwise be required then to be made shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall
amount to at least one cent (1 cent) per share.
Section 8.8. Certificate of Adjustment. After each adjustment of the
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Common Stock Exercise Price or the amount of Warrant Securities purchasable upon
exercise of Warrants pursuant to this Section 8, the Company will promptly
prepare a certificate signed by the Chairman or President, and by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the
Company setting forth: (i) the Common Stock Exercise Price, as so adjusted; (ii)
the number of Shares purchasable upon exercise of each Warrant after such
adjustment; and (iii) a brief statement of the facts accounting for such
adjustment. The Company will promptly file such certificate with its records and
cause a brief summary thereof to be sent by first-class mail to each Holder at
his last address as it shall appear on the registry books of the Company. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof, except as to any Holder to whom the Company
failed to mail such notice or except as to any Holder whose notice was
defective.
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Section 8.9. Validity of Warrant Certificate. Irrespective of any
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adjustments or changes in the Common Stock Exercise Price or the number of
Shares purchasable upon exercise of Warrants, Warrant Certificates theretofore
and thereafter issued shall continue to express the Common Stock Exercise Price
per share and the number of Shares purchasable thereunder as of the date such
Warrant Certificates were originally issued; provided that the Holders shall be
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entitled to exercise Warrants represented by such Warrant Certificates after
giving effect to each such adjustment and change, and such Warrant Certificate
shall be deemed to incorporate each such adjustment and change as if new Warrant
Certificates reflecting each such adjustment and change had been issued to the
Holders.
Section 8.10. Dividends and Other Distributions. In the event that
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the Company shall at any time prior to the exercise of all Warrants declare a
dividend (other than a dividend consisting solely of shares of Common Stock and
other than a regularly scheduled dividend with respect to any calendar year
declared within such calendar year or the following calendar year which does not
exceed one hundred percent (l00%) of net earnings (after taxes) for such
calendar year) or otherwise distribute to all its stockholders any assets
(including shares of any subsidiary), property, rights, evidences of
indebtedness, securities (other than shares of Common Stock) then, forthwith
upon such declaration, the Common Stock Exercise Price (until another such
declaration or other event causing price adjustments to the Common Stock
Exercise Price pursuant to this Section 8) whether issued by the Company or by
another, or other thing of value, shall be adjusted (calculated to the nearest
$.0001) by multiplying the Common Stock Exercise Price in effect immediately
prior to the record date for such dividend or other distribution by the quotient
derived by dividing (i) the difference between (a) the product of the number of
shares of Common Stock outstanding immediately prior to such declaration
multiplied by the Market Price for Common Stock immediately prior to such
declaration and (b) the aggregate fair market value amount of such dividend or
distribution so declared by (ii) the product of the number of shares of Common
Stock outstanding immediately prior to such declaration multiplied by the Market
Price for Common Stock immediately prior to such declaration. Such adjustments
shall be made on the record date for determination of stockholders entitled to
receive such dividend or distribution.
Section 9. Exchange and Replacement of Warrant Certificates. Each
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Warrant Certificate is exchangeable, without expense, upon the surrender thereof
by the Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Securities in such denominations as
shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of
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such Warrant Certificates, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor in lieu thereof.
Section 10. Elimination of Fractional Interests. The Company shall
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not be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of Warrants, nor shall it be required to issue scrip or
pay cash in lieu of such fractional interests, it being the intent of the
parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.
Section 11. Reservation and Listing of Securities. The Company shall
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at all times reserve and keep available out of its authorized capital stock,
solely for the purpose of issuance of Common Stock issuable upon exercise of
Warrants, such number of shares of Common Stock as shall be issuable upon
exercise thereof. The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Common Stock Exercise Price, all Shares of Common
Stock and other securities issuable upon such exercise when issued shall be duly
and validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any security holder of the Company. As long as Warrants shall be
outstanding, the Company shall use reasonable efforts to cause the Common Stock
issuable upon the exercise of Warrants to be listed (subject to official notice
of issuance) on all securities exchanges on which the Common Stock may then be
listed and/or quoted on NASDAQ/NMS.
The Company represents and warrants that (i) the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of Delaware and has all requisite power, authority and legal right to enter
into this Agreement; (ii) this Agreement has been duly executed and delivered by
the Company and constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (b) general principles of equity (regardless of
whether considered in a proceeding at law or in equity); (iii) the Warrants have
been duly authorized, validly issued and are fully paid and non-assessable and
are not subject to any preemptive rights; and (iv) as of June 23, 1997, the
Company had 80,377,604 shares of Common Stock issued and outstanding.
Section 12. Notices to Warrant Holders. Nothing contained in this
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Agreement shall be construed as conferring upon the Holders of Warrants the
right to vote or to consent or to receive notice as a stockholder in respect of
any meetings of stockholders for the election of directors or any other matter
or as having any rights whatsoever as a stockholder of the Company. If, however,
at any time prior to the earlier of the expiration of the Warrants or their
exercise, any of the following events shall occur:
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(i) the Company shall take a record of the holders of shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on
the books of the Company; or
(ii) the Company shall offer to all the holders of shares of
Common Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock of
the Company, or any option, right or warrant to subscribe therefor; or
(iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all
or substantially all of its property, assets and business as an entirety
shall be proposed;
then, in any one or more of said events, the Company shall give written notice
of such event to each Holder of Warrants at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution or
offer. Such notice shall specify such record date or the date of closing the
transfer books, as the case may be. Failure to give such notice or any defect
therein shall not affect the validity of any action taken in connection with
such dividend, distribution, offer, dissolution, liquidation, winding up or
sale.
Section 13. Notices. All notices, requests, consents and other
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communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or mailed by registered or certified mail,
return receipt requested:
(i) If to a Holder, to the address of such Holder as shown on the
books of the Company; or
(ii) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to
the Holders.
Section 14. Supplements and Amendments. The Company and the Sellers
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may from time to time supplement or amend this Agreement without the approval of
any Holders (other than Sellers) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Sellers may deem
necessary or desirable and which the Company and the Sellers deem shall not
adversely affect the interests of the Holders.
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Section 15. Successors. All the covenants and provisions of this
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Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
Section 16. Termination. Except for the representation and warranty
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of the Company contained herein that all Shares issued upon the exercise of any
Warrants are validly issued, fully paid and non-assessable, this Agreement, and
all provisions hereof, shall terminate at the close of business on September 17,
2007.
Section 17. Governing Law; Submission to Jurisdiction. This
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Agreement and each Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be construed in accordance with the laws of said State without giving effect to
the rules of said State governing conflicts of laws.
The Company, Sellers and the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of Delaware
or of the United States of America for the District of Delaware, and irrevocably
submit to such jurisdiction, which jurisdiction shall be exclusive. The Company,
the Sellers and the Holders hereby irrevocably waive any objection to such
exclusive jurisdiction or inconvenient forum and also hereby irrevocably waive
any right or claim to trial by jury in connection with any such action,
proceeding or claim. Any such process or summons to be served upon any of the
Company, the Sellers and the Holders (at the option of the party bringing such
action, proceeding or claim) may be served by transmitting a copy thereof, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address referred to in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim. The Company, the Sellers and the
Holders agree that the prevailing party(ies) in any such action or proceeding
shall be entitled to recover from the other party(ies) all of its(their)
reasonable legal costs and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.
Section 18. Entire Agreement; Modification. This Agreement
------------------------------
(including the Acquisition Agreement to the extent portions thereof are referred
to herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and may not be modified or amended except
by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought.
Section 19. Severability. If any provision of this Agreement shall
------------
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision of this Agreement.
12
Section 20. Captions. The caption headings of the Sections of this
--------
Agreement are for convenience of reference only, are not intended as, nor should
they be construed as, a part of this Agreement and shall be given no substantive
effect.
Section 21. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any Person other than the Company and Sellers and
any other Holders of Warrants, any legal or equitable right, remedy or claim
under this Agreement, and this Agreement shall be for the sole and exclusive
benefit of the Company and Sellers and any other Holders of Warrants.
Section 22. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of such counterparts shall for all purposes be
deemed to be an original and such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
[SEAL] UNITED STATES FILTER CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Attorney-in-Fact for
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
WESTERN FARM & CATTLE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
N.N. INVESTORS, L.P.
By: California Land & Cattle Company,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
13
CALIFORNIA LAND & CATTLE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
ST RANCH GENPAR, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
FW RANCH PARTNERS, L.P.
By: ST Ranch GenPar, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
14
SCHEDULE I
Seller Warrants Exercise Price
------ -------- --------------
N.N. Investors, L.P. 551,232 $50
551,232 $60
FW Ranch Partners, L.P. 42,768 $50
42,768 $60
California Land & Cattle Company 5,568 $50
5,568 $60
ST Ranch GenPar, Inc. 432 $50
432 $60
Western Farm & Cattle Company 0 N/A
0 N/A
---------
1,200,000
=========
15
EXHIBIT A
FORM OF WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES) OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, SEPTEMBER 17, 2007.
No. W-____ ___________ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ________________, or its
registered assigns, is the registered holder of __________________ Warrants to
purchase initially, at any time after the first contractual sale of water, and
the receipt of monies, funds, assets, debt forgiveness or the like therefor, by
the Company or any Affiliate of the Company or by the IID or another
Governmental Body as trustee for the benefit of the Company or any Affiliate of
the Company from Water Rights appurtenant to the Properties of WFLP, California
Farms and FWRLP, as such terms are defined in the Acquisition Agreement, dated
August 3, 1997, by and among the Company and the Sellers named therein, to occur
after the date of this Warrant Certificate until 5:30 p.m. New York time on
September 17, 2007 (the "Expiration Date"), up to ________________ fully paid
and non-assessable shares of Common Stock, par value $.01 per share (the "Common
Stock") of UNITED STATES FILTER CORPORATION, a Delaware corporation (the
"Company"), at the initial exercise price, subject to adjustment in certain
events (the "Common Stock Exercise Price"), equal to $_____ per share upon
surrender of this Warrant Certificate and payment of the Common Stock Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the Warrant Agreement dated as of September 17, 1997
between the Company and the Sellers (the "Warrant Agreement"). Each Warrant
entitles the holder thereof initially to purchase one (1) share of Common Stock.
Payment of the Common Stock Exercise Price shall be made by certified or
official bank check or wire transfer in New York Clearing House funds payable to
the order of the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holder(s) (the word "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that, upon the occurrence of certain
events, the Common Stock Exercise Price and the type and/or number of the
Company's securities issuable upon exercise of Warrants may, subject to certain
conditions, be adjusted. In such event, the Company will, at the request of the
holder, in exchange for the old Warrant Certificate, issue a new Warrant
Certificate evidencing the adjustment in the Common Stock Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
-------- -------
Certificates shall not in any way change, alter or otherwise impair the rights
of the holder(s) as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
2
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of September 17, 1997.
UNITED STATES FILTER CORPORATION
[SEAL]
By:
---------------------------------
Name:
Title:
3
FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.1
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ___________ shares of
Common Stock and herewith tenders in payment for such securities a certified or
official bank check or wire transfer payable in New York Clearing House Funds to
the order of UNITED STATES FILTER CORPORATION in the amount of
$_______________________, all in accordance with the terms of Section 3.1 of
that certain Warrant Agreement dated as of September 17, 1997 by and among
UNITED STATES FILTER CORPORATION, WESTERN FARM & CATTLE COMPANY, CALIFORNIA LAND
& CATTLE COMPANY, N.N. INVESTORS, L.P., ST RANCH GENPAR, INC. and FW RANCH
PARTNERS, L.P. The undersigned requests that a certificate for such securities
be registered in the name of
___________________________________, whose address is
_____________________________________ and that such certificate be delivered to
________________________ whose address is _____________________________________.
Date: _______________________ Signature:________________________________
(Signature must conform in all
respects to name of holder as specified on
the face of the Warrant Certificate.)
------------------------------------------
(Insert Social Security or Other Identifying
Number of Holder)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED,_______________________________________
hereby sells, assigns and transfers unto
---------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint____________________________
Attorney to transfer the within Warrant Certificate on the books of the within-
named Company, with full power of substitution.
Date:___________________ Signature:__________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
____________________________________________
(Insert Social Security or Other Identifying
Number of Assignee)