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EXHIBIT 4.2
WARRANT AGREEMENT
Dated as of
February 25, 1998
Between
AMERICAN RESTAURANT GROUP, INC.
and
U.S. Trust Company of California, N.A.
as the Warrant Agent
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Warrants for
Common Stock of
American Restaurant Group, Inc.
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions.............................. 2
SECTION 1.1 Definitions.................................................... 2
SECTION 1.2 Rules of Construction.......................................... 5
ARTICLE II Warrant Certificates and Client Certificates....... 5
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 Loss or Mutilation............................................. 8
ARTICLE III Exercise Terms.....................9
SECTION 3.1 Exercise Price................................................. 9
SECTION 3.2 Exercise Period................................................ 9
SECTION 3.3 Expiration..................................................... 9
SECTION 3.4 Manner of Exercise............................................. 9
SECTION 3.5 Issuance of Warrant Shares..................................... 10
SECTION 3.6 Fractional Warrant Shares...................................... 11
SECTION 3.7 Reservation of Warrant Shares.................................. 11
SECTION 3.8 Cancellation of Warrant Certificates........................... 11
SECTION 3.9 Compliance with Law............................................ 11
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ARTICLE IV Antidilution Provisions.................... 12
SECTION 4.1 Adjustment of Exercise Price and Warrant Number............... 12
SECTION 4.2 Adjustment for Change in Capital Stock........................ 12
SECTION 4.3 Adjustment for Rights Issue................................... 13
SECTION 4.4 Adjustment for Other Distributions............................ 14
SECTION 4.5 Adjustment for Common Stock Issue............................. 15
SECTION 4.6 Adjustment for Convertible Securities Issue................... 16
SECTION 4.7 [INTENTIONALLY OMITTED.]...................................... 17
SECTION 4.8 Consideration Received........................................ 17
SECTION 4.9 When De Minimis Adjustment May Be Deferred.................... 18
SECTION 4.10 Adjustment to Exercise Price.................................. 18
SECTION 4.11 When No Adjustment Required................................... 18
SECTION 4.12 Notice of Holders............................................. 19
SECTION 4.13 Voluntary Reduction........................................... 20
SECTION 4.14 Reorganizations............................................... 21
SECTION 4.15 Form of Warrants.............................................. 22
SECTION 4.16 Miscellaneous ................................................ 21
SECTION 4.17 Non-applicability of Article IV............................... 22
ARTICLE V Transferability.................... 23
SECTION 5.1 Transfer and Exchange......................................... 23
SECTION 5.2 Registration, Registration of Transfer and Exchange........... 24
SECTION 5.3 [INTENTIONALLY OMITTED]....................................... 25
SECTION 5.4 Special Transfer Provisions................................... 25
SECTION 5.5 Surrender of Warrant Certificates............................. 27
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ARTICLE VI Warrant Agent.................... 26
SECTION 6.1 Appointment of Warrant Agent.................................. 26
SECTION 6.2 Rights and Duties of Warrant Agent............................ 27
SECTION 6.3 Individual Rights of Warrant Agent............................ 28
SECTION 6.4 Warrant Agent's Disclaimer.................................... 28
SECTION 6.5 Compensation and Indemnity.................................... 28
SECTION 6.6 Successor Warrant Agent....................................... 28
ARTICLE VII Miscellaneous.................. 30
SECTION 7.1 [INTENTIONALLY OMITTED.]...................................... 30
SECTION 7.2 SEC Reports and Other Information............................. 30
SECTION 7.3 Rule 144A..................................................... 30
SECTION 7.4 Persons Benefitting........................................... 31
SECTION 7.5 Rights of Holders............................................. 31
SECTION 7.6 Amendment..................................................... 31
SECTION 7.7 Notices....................................................... 31
SECTION 7.8 Governing Law................................................. 32
SECTION 7.9 Successors.................................................... 33
SECTION 7.10 Multiple Originals............................................ 33
SECTION 7.11 Table of Contents............................................. 33
SECTION 7.12 Severability.................................................. 33
SECTION 7.13 Further Assurances............................................ 33
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THIS WARRANT AGREEMENT (this "Agreement"), dated as of February 25,
1998, is between AMERICAN RESTAURANT GROUP, INC., a Delaware corporation
(together with its permitted successors and assigns, the "Company"), and U.S.
Trust Company of California, N.A., as warrant agent (together with its permitted
successors and assigns, the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement, dated
February 13, 1998 (the "Purchase Agreement"), with ▇▇▇▇▇▇▇▇▇ & Company, Inc.
(the "Purchaser"), pursuant to which the Company has agreed to issue and sell to
the Purchaser, and the Purchaser has agreed to purchase from the Company, 35,000
Units (as defined below), consisting of (i) $35,000,000 aggregate initial
liquidation preference amount of 12% Senior Pay-In-Kind Exchangeable Preferred
Stock (the "Preferred Stock") and (ii) 35,000 warrants (together with the 4,375
warrants (the "Purchaser Warrants") to purchase shares of the Company's Common
Stock (as defined below) issued to the Purchaser pursuant to the letter
agreement dated November 6, 1997 between the Company and the Purchaser and to
others pursuant to the letter agreement dated as of February 25, 1998 between
the Company and TCW Asset Management Company, the "Warrants") to purchase
initially 93,150 shares (together with the shares of the Company's Common Stock
underlying the Purchaser Warrants, the "Warrant Shares") of the Company's common
stock, $0.01 par value per share (the "Common Stock"), at an initial exercise
price of $.01 per share;
WHEREAS, the Warrants are to be issued pursuant to this Agreement;
WHEREAS, the Preferred Stock and the Warrants (other than the
Purchaser Warrants) (the "Unit Warrants") will be sold in Units, each Unit
consisting of (i)$1,000 initial liquidation preference amount of Preferred Stock
and (ii) one Warrant to purchase initially 2.66143 Warrant Shares at an initial
exercise price of $.01 per share (the "Units");
WHEREAS, prior to the Separation Date, beneficial ownership of the
Preferred Stock and the Unit Warrants will be evidenced by record ownership of
the Units;
WHEREAS, the shares of Preferred Stock and the Unit Warrants
comprising the Units shall be evidenced by Preferred Stock Certificates and
Warrant Certificates that will be physically attached together with Unit
Certificates in the form of Exhibit C hereto;
WHEREAS, the Company further desires the Warrant Agent to act on
behalf of the Company in connection with the issuances, division, transfer,
exchange, substitution and exercise of the Warrants, and the Warrant Agent is
willing to so act; and
NOW, THEREFORE, each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the registered holders of
Warrants (or until the Separation Date (as defined below), the registered
holders of Preferred Stock) (each a "Holder"):
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ARTICLE I
Definitions
SECTION 1.1 Definitions. Capitalized terms used but not defined
herein shall have the respective meanings given to such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" of any specified Person means (i) any other Person
which, directly or indirectly, is controlling or controlled by or under direct
or indirect common control with such specified Person, or (ii) any other Person
who is a director or executive officer (A) of such Person, (B) of any subsidiary
of such specified Person, or (C) of any Person described in clause (i) above.
For purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent Member" has the meaning given to such term in Section 5.3.
"Board" means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means any day other than (i) Saturday or Sunday, (ii)
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to be closed.
"Common Stock" has the meaning given to such term in the recitals to
this Agreement.
"Company" has the meaning given to such term in the preamble to this
Agreement.
"Current Market Value" per share of Common Stock or any other
security at any date means, on any date of determination (a) the average of the
daily closing sale prices for each of 15 trading days immediately preceding such
date (or such shorter number of days during which such security has been listed
or traded), if the security has been listed on the New York Stock Exchange, the
American Stock Exchange or other national securities exchange or the NASDAQ
National Market for at least 10 trading days prior to such date, (b) if such
security is not so listed or traded, the average of the daily closing bid prices
for each of the 15 trading days immediately preceding such date (or such shorter
number of days during which such security had been quoted), if the security has
been quoted on a national over-the-counter market for at least 10 trading days,
(c) in the case of a firm commitment underwritten public offering, the bona fide
price paid by the underwriters and (d) otherwise, the value of the security most
recently determined as of a date within the six months preceding such day by the
Board.
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"Definitive Warrants" has the meaning given to such term in Section
2.1.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC pursuant thereto.
"Exchange Offer" means the offer by the Company to exchange the
Company's Notes and the Preferred Stock for senior secured debt securities and
preferred stock of the Company with terms substantially identical to the Notes
and the Preferred Stock, respectively.
"Exercise Date" has the meaning given to such term in Section 3.2.
"Exercise Price" has the meaning given to such term in Section 3.1.
"Expiration Date" has the meaning given to such term in Section 3.2.
"Global Warrant" has the meaning given to such term in Section 2.1.
"Global Warrants" has the meaning given to such term in Section 2.1.
"Holders" has the meaning given to such term in the recitals to this
Agreement.
"Institutional Accredited Investor" has the meaning given to such
term in Section 2.3.
"Issue Date" means the date on which Warrants are initially issued,
which is February 25, 1998.
"Liquidation Preference" means $1,000 per share of Preferred Stock.
"Notes" means the Company's 11 1/2 Senior Secured Notes due 2003.
"Offering Circular" means the final Offering Circular of the Company
dated February 17, 1998 relating to the issuance and sale of the Units.
"Officer" means the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President or the Treasurer of the Company.
"Person" means any individual, corporation, company (including any
limited liability company), partnership, joint venture, trust, unincorporated
organization, government or any agency or political subdivision thereof.
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"Preferred Stock Certificates" means stock certificates evidencing
the Perferred Stock.
"Preferred Stock Transfer Agent" means U.S. Trust Company of
California, N.A.
"Public Company Date" means the date that is 45 days after the date
upon which underwritten primary public offerings of Common Stock of the Company
pursuant to effective registration statements under the Securities Act have
resulted in 35% of the Company's Common Stock (measured on a fully diluted basis
after giving effect to such offerings) being sold to the public and in the
Company's Common Stock being listed for trading on any of the New York Stock
Exchange, the NASDAQ National Market or the American Stock Exchange.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Redeemable Stock" means, with respect to any Person, any capital
stock that by its terms (or by the terms of any security into which it is
convertible or exchangeable) or otherwise (i) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may
become redeemable or repurchasable at the option of the holder thereof, in whole
or in part, or (iii) is convertible or exchangeable for indebtedness.
"Restricted Definitive Warrant" has the meaning given to such term
in Section 2.3.
"Restricted Warrant" means a Global Warrant or a Restricted
Definitive Warrant.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest to occur of (i) August 15,
1998, (ii) the date of commencement of the Exchange Offer (iii) such earlier
date as may be determined by the Purchaser, (iv) the date on which the Company
mails a notice of a Change of Control to holders of the Preferred Stock, (v) in
the event that the Company elects to redeem the Preferred Stock, the date on
which the Company mails notice thereof to the holders of the Preferred Stock,
and (vi) the date on which the Company consummates a public offering of Common
Stock.
"Stock Transfer Agent" has the meaning given to such term in Section
3.5.
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"Voting Stock" means all classes of capital stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Warrant Agent" has the meaning given to such term in the Recitals.
"Warrant Certificates" has the meaning given to such term in Section
2.1.
"Warrant Number" has the meaning given to such term in Article IV.
"Warrant Shares" means the Common Stock (and other securities)
issuable upon the exercise of the Warrants.
"Warrants" has the meaning given to such term in the Recitals.
SECTION SECTION 1.2 Rules of Construction. Unless the text otherwise
requires: (i) a term has the meaning assigned to it; (ii) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time; (iii) "or" is not
exclusive; (iv) "including" means including, without limitation; (v) references
to "Section" and "Article" refer to Sections and Articles of this Agreement,
unless the context clearly requires otherwise; and (vi) words in the singular
include the plural and words in the plural include the singular.
ARTICLE ARTICLE II
Warrant Certificates and Client Certificates
SECTION 2.1 Form of Warrant Certificates. Unit Warrants shall be initially
issued together with the issuance of the Preferred Stock and shall not be
separately transferrable until the Separation Date (as defined). Prior to the
Separation Date, beneficial ownership of the Unit Warrants will be evidenced by
record ownership of the Units. The Unit Warrants and Units will be issued (a) in
global form (as applicable, the "Global Warrant" or "Global Unit"),
substantially in the form of Exhibit A and Exhibit C, respectively, attached
hereto (including the text accompanying the footnotes thereto), and (b) in
definitive form (as applicable, the "Definitive Warrants" or "Definitive
Units"), substantially in the form of Exhibit A and Exhibit C, respectively,
(excluding the text accompanying the footnotes thereto). The Purchaser Warrants
will be issued as a Definitive Warrant or Warrants. The Global Warrant shall
represent the aggregate amount of outstanding Warrants from time to time
endorsed thereon; provided that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of the Global
Warrant or Global Unit to reflect the amount of any increase or decrease in the
amount of outstanding Warrants or Units represented thereby shall be made by the
Warrant Agent in accordance with instructions given by the holder thereof.
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The Depository with respect to the Global Warrant and Global Unit
(the "Depository") shall be The Depository Trust Company until a successor shall
be appointed by the Company and become such Depository. The Global Warrant or
Global Unit shall be registered in the name of the Depository, or the nominee of
such Depository. So long as the Depository or its nominee is the registered
owner of such Global Warrant or Global Unit it will be deemed the sole owner and
holder of such Global Warrant or Global Unit for all purposes hereunder and
under such Global Warrant or Global Unit. The certificates (the "Warrant
Certificates") evidencing the Global Warrant and the Definitive Warrants to be
delivered pursuant to this Agreement shall be substantially in the form set
forth in Exhibit A attached hereto. The certificates evidencing the Units to be
delivered pursuant to this Agreement shall be substantially in the form set
forth in Exhibit C hereto (the "Unit Certificates"). Until the Separation Date,
all references herein to "Warrant Certificates," unless the context dictates
otherwise, shall also mean the related Unit Certificates. Neither the Company
nor the Warrant Agent will have any responsibility or liability for any aspects
of the records relating to beneficial ownership interest of the Global Warrant
or Units in the name of the Depository or its nominee or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 2.2 Legends. Unless and until a Warrant or Warrant Share is
sold under an effective registration statement, each Warrant Certificate
evidencing the Global Warrants and the Definitive Warrants (and all Warrant
Certificates issued in exchange therefor or substitution thereof) and each
certificate representing the Warrant Shares shall bear a legend in substantially
the following form (with any appropriate modification for the Warrant Shares):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) UNDER
THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH AMERICAN RESTAURANT GROUP, INC. ("THE
COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
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OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND
WITHOUT DIRECTED SELLING EFFORTS WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR
TO THE WARRANT AGENT.
SECTION 2.3 Execution and Delivery of Warrant Certificates. Warrant
Certificates evidencing Warrants to purchase initially an aggregate of up to
104,794 Warrant Shares (subject to adjustment and except as provided in Section
2.4) and Unit Certificates evidencing 35,000 Units may be issued hereunder. On
the Issue Date, subject to Section 2.1, the Company shall execute and deliver to
the Warrant Agent for countersignature, and the Warrant Agent shall thereupon
countersign and deliver such Warrant Certificates and Unit Certificates upon the
order and at the direction of the Company to the purchasers thereof on the date
of issuance. The Warrant Agent is hereby authorized to countersign and deliver
Warrant Certificates and Unit Certificates as required by this Agreement.
The Warrant Certificates and Unit Certificates shall be executed on
behalf of the Company by an Officer of the Company either manually or by
facsimile signature printed thereon. The Warrant Certificates and Unit
Certificates shall be countersigned manually by the Warrant Agent and shall not
be valid for any purpose unless so countersigned. In case any Officer of the
Company whose signature shall have been placed upon any of the Warrant
Certificates and Unit Certificates shall cease to be such Officer of the Company
before countersignature by the Warrant Agent and issuance and delivery thereof,
such Warrant Certificates and Unit 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 the
Company.
Warrants and Units offered and sold in their initial distribution to
a limited number of institutions that are accredited investors (which are not
QIBs) within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities
Act (and institutions in which all the equity owners are such accredited
investors) (together referred to as "Institutional Accredited Investors") in
transactions exempt from registration under the Securities Act will
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be delivered, in certificated fully registered form (as applicable, a
"Restricted Definitive Warrant" or a "Restricted Definitive Unit") substantially
in the form set forth in Exhibit A and Exhibit C. Such Warrants shall be
delivered to such Institutional Accredited Investors only upon the execution and
delivery to the Company and the Initial Purchaser of an institutional accredited
investor transferee compliance letter (an "Investor Letter") substantially in
the form of Annex A-1 to the Offering Circular. Restricted Definitive Warrants
and Restricted Definitive Units may not be transferred or exchanged for
interests in the Global Warrant or Global Unit or another Restricted Definitive
Warrant or Restrictive Definitive Unit, except as provided herein.
SECTION 2.4 Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership and the loss,
theft, destruction or mutilation of any Warrant Certificate and of indemnity
satisfactory to them and (in the case of mutilation) upon surrender and
cancellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Units or Warrants represented thereby have been acquired
by a bona fide purchaser, the Company shall execute and an authorized signatory
of the Warrant Agent shall manually 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 Units or Warrants. Upon the issuance of any new
Warrant Certificate under this Section 2.4, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and other expenses (including the fees and expenses
of the Warrant Agent and of counsel to the Company) in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this Section
2.4 in lieu of any lost, stolen or destroyed Warrant Certificate shall
constitute a contractual obligation of the Company, whether or not the allegedly
lost, stolen or destroyed Warrant Certificates shall be at any time enforceable
under applicable law, 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 Section 2.4 are
exclusive and shall preclude (to the extent lawful) all other rights or
remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary, with respect to the replacement of mutilated, lost, stolen or
destroyed Warrant Certificates.
ARTICLE ARTICLE III
Exercise Terms
SECTION 3.1 Exercise Price. Each Warrant shall initially entitle the
Holder thereof, subject to adjustment pursuant to the terms of this Agreement,
to purchase 2.66143 shares of Common Stock for an initial exercise price of $.01
per share of Common Stock (the "Exercise Price"). The Warrant Number and
Exercise Price are both subject to adjustment as set forth in Article IV.
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SECTION 3.2 Exercise Period. (a) Subject to the terms and conditions
set forth herein, the Warrants are exercisable at any time or from time to time
on any Business Day commencing on the Issue Date (the "Exercise Date").
( (b) ) No Warrant shall be exercisable after the
earlier of (i) the Public Company Date and (ii) August 15, 2008 (the "Expiration
Date").
SECTION 3.3 Expiration. A Warrant shall terminate and become void as
of the earlier of (i) the close of business on the Expiration Date or (ii) the
date such Warrant is exercised. The Company shall give notice not less than 90,
and not more than 120, days prior to the Expiration Date to the Holders of all
then outstanding Warrants to the effect that the Warrants will terminate and
become void as of the close of business on the Expiration Date; provided,
however, that notwithstanding that the Company may fail to give notice as
provided in this Section 3.3, the Warrants will terminate and become void on the
Expiration Date.
SECTION 3.4 Manner of Exercise. (a) Warrants may be exercised at any
time on or after th Exercise Date by surrendering to the Warrant Agent the
Warrant Certificates at any office or agency maintained for that purpose,
together with the form of election to purchase Common Stock on the reverse
thereof duly completed and signed by the Holder thereof and by paying in full
the Exercise Price for each Warrant exercised and any other amounts required to
be paid pursuant to Section 5.2 hereof to the Warrant Agent at its corporate
trust office. Payment of the Exercise Price (and any other required amounts)
shall be made in the form of cash or a certified or official bank check payable
to the order of the Company or by bank wire transfer of immediately available
funds. The date on which (i) payment in full of the Warrant Price and (ii) the
Warrant Certificate with the form of election to purchase Warrant Securities set
forth on the reverse side of the Warrant Certificate properly completed and duly
executed, are received by the Warrant Agent shall be deemed to be the date on
which the Warrant is exercised. The Warrant Agent shall deposit all funds
received by it in payment of the Warrant Price in an account of the Company
maintained with it or in such other account designated by the Company and shall
advise the Company by telephone at the end of each day on which a payment for
the exercise of Warrants is received of the amount so deposited to its account.
The Warrant Agent shall promptly confirm such telephone advice to the Company in
writing. In lieu of exercising the Warrant by paying in full the Exercise Price,
the Warrant holder may, from time to time, convert this Warrant (a "Warrant
Conversion"), in whole or in part, into a number of shares of Common Stock
determined by dividing (a) the aggregate Current Market Value of the number of
Warrant Shares represented by the Warrants converted, minus the aggregate
Exercise Price for such Warrant Shares (and any other required amounts), by (b)
the Current Market Value of one Warrant Share. For purposes of this Agreement,
such conversion shall be deemed payment in full of the Exercise Price.
(b) Subject to Section 3.2, the rights represented by the Warrants
shall be exercisable at the election of the Holders thereof either in full at
any time or from time to time in part and in the event that a Warrant
Certificate is surrendered for exercise in respect of less than all the Warrant
Shares purchasable on such exercise at any time prior to the expiration of the
Exercise Period, a new Warrant Certificate exercisable for the remaining
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Warrant Shares will be issued. The Warrant Agent shall manually countersign and
deliver the required new Warrant Certificates, and the Company, at the Warrant
Agent's request, shall supply the Warrant Agent with Warrant Certificates duly
signed on behalf of the Company for such purpose.
(c) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to delivery of the Warrant Securities to which such holder
is entitled upon such exercise, (iii) delivery of Warrant Certificates
evidencing the balance, if any, of the Warrants remaining after such exercise
and (iv) such other information as the Company shall reasonably require.
(d) The Company shall not be required to pay any stamp or other tax
other governmental charge required to be paid in connection with any transfer
involved in the issuance of the Warrant Shares, and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Shares until such tax or other charge shall have been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
SECTION 3.5 Issuance of Warrant Shares. Upon the surrender of
Warrant Certificates, as set forth in Section 3.4, the Company shall issue and
cause the Warrant Agent or, if appointed, a transfer agent for the Common Stock
("Stock Transfer Agent") to countersign and deliver to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased
upon the exercise of such Warrants or other securities or property to which it
is entitled, registered or otherwise, to the Person or Persons entitled to
receive the same, together with cash as provided in Section 3.6 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any Person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrant
Certificates and payment of the per share Exercise Price, as aforesaid.
SECTION 3.6 Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be exercised in full at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable pursuant thereto. If any fraction of a Warrant Share would, except
for the provisions of this Section 3.6, be issuable on the exercise of any
Warrant (or specified portion thereof), the Company shall pay an amount in cash
equal to the same fraction of the Current Market Value for one share of Common
Stock less the portion of the Exercise Price attributable thereto, rounded to
the nearest whole cent.
SECTION 3.7 Reservation of Warrant Shares. The Company shall at all
times prior to the Expiration Date keep reserved out of its authorized shares of
Common Stock, a number of shares of Common Stock sufficient to provide for the
exercise of all outstanding Warrants. The registrar for the Common Stock (the
"Registrar") shall at all times
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until the expiration of the Exercise Period reserve such number of authorized
shares as shall be required for such purpose. The Company will keep a copy of
this Agreement on file with the Stock Transfer Agent. The Company will supply
such Stock Transfer Agent with duly executed stock certificates for such purpose
and will itself provide or otherwise make available any cash which may be
payable as provided in Section 3.6. The Company will furnish to such Stock
Transfer Agent a copy of all notices of adjustments and certificates related
thereto transmitted to each Holder.
The Company covenants that all shares of Common Stock that may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights, free from all taxes and free from all liens, charges
and security interests, created by or through the Company, with respect to the
issue thereof.
SECTION 3.8 Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall be promptly canceled by it and retired. The Warrant Agent
shall cancel all Warrant Certificates properly surrendered for exchange,
substitution, transfer or exercise. The Warrant Agent shall destroy canceled
Warrant Certificates held by it and deliver a certificate of destruction to the
Company.
SECTION 3.9 Compliance with Law. (a) Notwithstanding anything in
this Agreement to the contrary, in no event shall a Holder be entitled to
exercise a Warrant, unless (i) a registration statement filed under the
Securities Act in respect of the issuance of the Warrant Shares is then
effective; provided, however, that in no event shall the Company be required to
file a Registration Statement in order to permit a Holder to exercise a Warrant,
or (ii) an exemption from the registration requirements is available under the
Securities Act for the issuance of the Warrant Shares (and the delivery of any
other securities for which the Warrants may at the time be exercisable) at the
time of such exercise and, if requested by the Company, an opinion of counsel
addressed to the Warrant Agent and the Company, satisfactory in form and
substance to the Company, confirms such exemption.
(b) If any shares of Common Stock required to be reserved for
purposes of exercise of Warrants require, under any other Federal or state law
or applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange before such shares may be issued upon
exercise, the Company will in good faith and as expeditiously as reasonably
possible endeavor to cause such shares to be duly registered or approved by such
governmental authority or listed on the relevant national securities exchange,
as the case may be
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ARTICLE IV
Antidilution Provisions
SECTION 4.1 Adjustment of Exercise Price and Warrant Number. The
number of shares of Common Stock issuable upon the exercise of each Warrant (the
"Warrant Number") is initially 2.66143. The Warrant Number is subject to
adjustment from time to time upon the occurrence of the events enumerated in, or
as otherwise provided in, this Article IV .
SECTION 4.2 Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a
distribution on its Common Stock in shares of its Common Stock;
(2) subdivides or reclassifies its
outstanding shares of Common Stock into a greater number of
shares;
(3) combines or reclassifies its
outstanding shares of Common Stock into a smaller number of
shares;
(4) makes a distribution on
Common Stock in shares of its capital stock other than Common
Stock; or
(5) issues by reclassification of
its Common Stock any shares of its capital stock (other than
reclassifications arising solely as a result of a change in the par
value or no par value of the Common Stock);
then the Warrant Number in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which such holder would have owned immediately following such action if
such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
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Such adjustment shall be made successively whenever any event listed
above shall occur. If the occurrence of any event listed above results in an
adjustment under Section 4.3 or 4.4 below, no further adjustment shall be made
under this Section 4.2.
SECTION 4.3 Adjustment for Rights Issue.
If the Company distributes (and receives no consideration therefor)
any rights, options or warrants (whether or not immediately exercisable) to
holders of any class of its Common Stock (as such) entitling them to purchase
shares of Common Stock at a price per share less than the Current Market Value
per share on the record date relating to such distribution, the Warrant Number
shall be adjusted in accordance with the formula:
W' = W x O + N
-----
O + N x P
-----
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date
for any such distribution.
O = the number of shares of Common Stock outstanding on the
record date for any such distribution.
N = the number of additional shares of Common Stock issuable
upon exercise of such rights, options or warrants.
P = the exercise price per share of such rights, options or
warrants.
M = the Current Market Value per share of Common Stock on the
record date for any such distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the adjusted Warrant Number shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
SECTION 4.4 Adjustment for Other Distributions.
If the Company distributes to holders of any class of its Common
Stock (as such) (i) any evidences of indebtedness of the Company or any of its
subsidiaries, (ii) any assets of the Company or any of its subsidiaries
(excluding cash dividends or other cash
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distributions from retained earnings), or (iii) any rights, options or warrants
to acquire any of the foregoing or to acquire any other securities of the
Company (any of the foregoing being hereinafter in this Section 4.4 called the
"Securities"), then, in each such case, unless the Company elects to reserve
such Securities for distribution to the holders of the Warrants so that any such
holder exercising Warrants will receive upon such exercise, in addition to the
shares of the Common Stock to which such holder is entitled, the amount and kind
of such Securities which such holder would have received if such holder had,
immediately prior to the record date for the distribution of the Securities,
exercised its Warrants, the Warrant Number shall be adjusted in accordance with
the formula:
W' = W x M
------
M - F
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date
mentioned below.
M = the Current Market Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date mentioned below
of the shares, indebtedness, assets, rights, options or
warrants distributable to the holder of one share of Common
Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If an adjustment is made pursuant to this subsection (c) as a result of the
issuance of rights, options or warrants and at the end of the period during
which any such rights, options or warrants are exercisable, not all such rights,
options or warrants shall have been exercised, the adjusted Warrant Number shall
be immediately readjusted as if "F" in the above formula was the fair market
value on the record date of the indebtedness or assets actually distributed upon
exercise of such rights, options or warrants divided by the number of shares of
Common Stock outstanding on the record date.
In the event that "F" in the above formula is greater than or equal
to "M" in the above formula, then each Holder of the Warrants, notwithstanding
that such Holder's Warrants have not been exercised, shall receive the
distribution referred to in this Section 4.4 on the basis of number of Warrant
Shares underlying the Warrants held by each such Holder, unless the Company
elects to reserve such Securities for distribution to the holders of the
Warrants upon the exercise of the Warrants as described above.
This subsection does not apply to rights, options or warrants
referred to in Section 4.3.
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SECTION 4.5 Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per
share less than the Current Market Value per share on the date the Company fixes
the offering price of such additional shares, the Warrant Number shall be
adjusted in accordance with the formula:
W' = W x A
--------
O + P
--
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares
of Common Stock.
P = the aggregate consideration received for the issuance of
such additional shares of Common Stock.
M = the Current Market Value per share of Common Stock on the
date of issuance of such additional shares.
A = the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares of
Common Stock.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This Section 4.5 does not apply to any of the transactions described
in Section 4.2.
SECTION 4.6 Adjustment for Convertible Securities Issue.
If the Company issues any options, warrants or other securities
convertible into or exchangeable or exercisable for Common Stock (other than
securities issued in transactions described in Sections 4.3 or 4.4) for a
consideration per share of Common Stock initially deliverable upon conversion,
exchange or exercise of such securities less than the Current Market Value per
share on the date of issuance of such securities, the Warrant Number shall be
adjusted in accordance with this formula:
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W' = W x O + D
-----
O + P
-
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities.
P = the sum of the aggregate consideration received for the
issuance of such securities and the aggregate minimum
consideration receivable by the Company for issuance of Common
Stock upon conversion or in exchange for, or upon exercise of,
such securities.
M = the Current Market Value per share of Common Stock on the
date of issuance of such securities.
D = the maximum number of shares of Common Stock deliverable upon
conversion or in exchange for or upon exercise of such
securities at the initial conversion, exchange or exercise
rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities has not been issued when the conversion, exchange or
exercise rights of such securities have expired or been terminated, then the
adjusted Warrant Number shall promptly be readjusted to the adjusted Warrant
Number which would then be in effect had the adjustment upon the issuance of
such securities been made on the basis of the actual number of shares of Common
Stock issued upon conversion, exchange or exercise of such securities. If the
aggregate minimum consideration receivable by the Company for issuance of Common
Stock upon conversion or in exchange for, or upon exercise of, such securities
shall be increased by virtue of provisions therein contained or upon the arrival
of a specified date or the happening of a specified event, then the Warrant
Number shall promptly be readjusted to the Warrant Number which would then be in
effect had the adjustment upon the issuance of such securities been made on the
basis of such increased minimum consideration.
This Section 4.6 does not apply to the issuance of the Warrants or
to any of the transactions described in Section 4.3.
SECTION 4.7 [INTENTIONALLY OMITTED.]
SECTION 4.8 Consideration Received.
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For purposes of any computation respecting consideration received
pursuant to Sections 4.5 and 4.6, the following shall apply:
(1) in the case of the issuance of
shares of Common Stock for cash, the consideration shall be the
amount of such cash (without any deduction being made for any
commissions, discounts or other expenses incurred by the Compa ny
for any underwriting of the issue or otherwise in connection
therewith);
(2) in the case of the issuance of
shares of Common Stock for a consideration in whole or in part other
than cash, the consideration other than cash shall be deemed to be
the fair market value thereof (irrespective of the accounting
treatment thereof) as determined in good faith by the Board; and
(3) in the case of the issuance of
options, warrants or other securities convertible into or
exchangeable or exercisable for shares of Common Stock, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion, exchange or exercise
thereof (the consideration in each case to be determined in the same
manner as provided in clauses (1) and (2) of this subsection).
SECTION 4.9 When De Minimis Adjustment May Be Deferred.
No adjustment in the Warrant Number need be made unless the
adjustment would require an increase or decrease of at least 1.0% in the Warrant
Number. Any adjustment that is not made shall be carried forward and taken into
account in any subsequent adjustment, provided that no such adjustment shall be
deferred beyond the date on which a Warrant is exercised.
All calculations under this Article IV shall be made to the nearest
cent or to the nearest .01 of a share, as the case may be, with one-half cent
and .005 of a share, respectively, being rounded upward. Anything in this
Article IV to the contrary notwithstanding, the Company shall be entitled to
make such reductions in the Warrant Price, in addition to those required by this
Section 4.9 as it in its discretion shall determine advisable in order that any
stock dividend, subdivision of shares, distribution of rights or warrants to
purchase stock or securities, or distribution of other assets (other than cash
dividends) hereafter made by the Company to its stockholders shall not be
taxable.
SECTION 4.10 Adjustment to Exercise Price.
Upon each adjustment to the Warrant Number pursuant to this Article
IV, the Exercise Price shall be adjusted so that it is equal to the Exercise
Price in effect immediately prior to such adjustment multiplied by a quotient,
the numerator of which is the Warrant Number in
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18
effect immediately prior to such adjustment, and the denominator of which is the
Warrant Number in effect immediately after such adjustment; provided, that the
Exercise Price shall not be adjusted below the lesser of $0.01 per share of
Common Stock and the then par value per share of Common Stock.
SECTION 4.11 When No Adjustment Required.
If an adjustment is made upon the establishment of a record date for
a distribution subject to Sections 4.2, 4.3 or 4.4 hereof and such distribution
is subsequently cancelled, the Warrant Number and Exercise Price then in effect
shall be readjusted, effective as of the date when the Board determines to
cancel such distribution, to that which would have been in effect if such record
date had not been fixed.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the amount of cash into which such
Warrants are exercisable. Interest will not accrue on the cash.
SECTION 4.12 Notice of Holders. Upon any adjustment pursuant
to Article IV hereof, the Company shall promptly thereafter (i) cause to be
filed with the Warrant Agent a certificate of an officer of the Company setting
forth the Warrant Number, the Exercise Price after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculations are based and (ii) cause to be given to each of the Holders at
its address appearing on the Warrant Register written notice of such adjustments
in accordance with the provisions of this Section 4.12. Where appropriate, such
notice may be given in advance and included as a part of the notice required to
be mailed under the other provisions of this Section 4.12.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants;
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of assets, including cash, evidences of
its indebtedness or other securities;
(c) of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets of
the Company substantially as an entirety, or of any reclassification or
change of Common Stock issuable upon exercise of the Warrants (other than
a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination) or of
a tender offer or exchange offer for shares of Common Stock;
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
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(e) the Company proposes to take any action that would require
an adjustment to the Warrant Number or the Exercise Price pursuant to
Article IV hereof;
then the Company shall cause to be given to each of the Holders at its address
appearing on the Warrant Register, at least 30 days prior to the applicable
record date hereinafter specified, or the date of the event in the case of
events for which there is no record date, in accordance with the provisions of
Section 14 hereof, a written notice stating (i) the date as of which the holders
of record of shares of Common Stock to be entitled to receive any such rights,
options, warrants or distribution are to be determined, (ii) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock or (iii) the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 4.12 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any Warrant Certificate
shall be construed as conferring upon the Holders (prior to the exercise of such
Warrants) the right to vote, to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of Directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company; provided, however, that nothing in the foregoing provision is intended
to detract from any rights explicitly granted to any Holder hereunder.
SECTION 4.13 Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by any
amount for any period of time (including, without limitation, permanently) if
the period is at least 20 days and if the reduction is irrevocable during the
period.
Whenever the Exercise Price is reduced, the Company shall mail to
the Holders and the Warrant Agent a notice of the reduction. The Company shall
mail the notice at least 15 days before the date the reduced Exercise Price
takes effect. The notice shall state the reduced Exercise Price and the period
it will be in effect.
A reduction of the Exercise Price under this Section 4.13 (other
than a permanent reduction) does not change or adjust the Exercise Price
otherwise in effect for purposes of Sections 4.2, 4.3, 4.4, 4.5 or 4.6.
SECTION 4.14 Reorganizations.
In case of any capital reorganization, other than in the cases
referred to in Sections 4.2, 4.3, 4.4, 4.5 or 4.6 hereof, or the consolidation
or merger of the Company with or into another corporation (other than a merger
or consolidation in which the Company is the continuing corporation and which
does not result in any reclassification of the outstanding shares of Common
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Stock into shares of other stock or other securities or property), or the sale
of the property of the Company as an entirety or substantially as an entirety
(collectively, such actions being hereinafter referred to as "Reorganizations"),
there shall thereafter be deliverable upon exercise of any Warrant (in lieu of
the number of shares of Common Stock theretofore deliverable) the amount of
cash, the number of shares of stock or other securities or property to which a
holder of the number of shares of Common Stock that would otherwise have been
deliverable upon the exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full immediately prior to
such Reorganization. In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of the Company, whose determination shall
be described in a duly adopted resolution certified by the Company's Secretary
or Assistant Secretary, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of Holders so that the
provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such Reorganization or the corporation
purchasing or leasing such assets or other appropriate corporation or entity
shall expressly assume, by a supplemental Warrant Agreement or other
acknowledgment executed and delivered to the Holder(s), the obligation to
deliver to each such Holder such cash, such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase, and all other obligations and liabilities under this
Agreement.
In the case of a consolidation, merger, sale or conveyance, the
Company shall thereupon be relieved of any further obligation hereunder or under
the Warrants, and the Company as the predecessor corporation may thereupon or at
any time thereafter be dissolved, wound up or liquidated. Such successor or
assuming corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Warrant
Certificates issuable hereunder which theretofore shall not have been signed by
the Company, and may execute and deliver Warrant Shares in its own name, in
fulfillment of its obligations to deliver Warrant Shares upon the exercise of
the Warrants. In any case of any such reclassification, change, consolidation,
merger, sale or conveyance, such changes in phraseology and form (but not in
substance) may be made in the Warrants thereafter to be issued as may be
appropriate.
SECTION 4.15 Form of Warrants.
Irrespective of any adjustments 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.
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SECTION 4.16 Miscellaneous.
For purpose of this Article IV the term "shares of Common Stock"
shall mean (i) shares of any class of stock designated as Common Stock of the
Company as of the date of this Agreement, (ii) shares of any other class of
stock resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value and (iii) shares of Common Stock of the Company
issuable upon exercise of options, warrants or rights to purchase Common Stock
of the Company or upon conversion or exchange of securities convertible into or
exchangeable for shares of Common Stock of the Company outstanding at the date
of determination. In the event that at any time, as a result of an adjustment
made pursuant to this Article IV, the holders of Warrants shall become entitled
to purchase any securities of the Company other than, or in addition to, shares
of Common Stock, thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in Sections 4.2 through
4.15 of this Article IV, inclusive, and the provisions of this Agreement with
respect to the Warrant Shares or the Common Stock shall apply on like terms to
any such other securities.
SECTION 4.17 Non-applicability of Article IV.
The provisions of this Article IV do not apply to (i) a change
solely in the par value or no par value of the Common Stock, provided that the
Company shall not increase the par value to exceed the Exercise Price, (ii) the
conversion or exchange (other than pursuant to a reclassification), in any case
on a share-for-share basis, of Common Stock for non-voting or light voting
common stock that has rights (other than voting rights) identical to the Common
Stock, or of such non-voting or light voting stock for Common Stock, (iii) the
issuance to employees of the Company or any of its subsidiaries of stock or
stock options in an amount which, upon purchase or exercise, as the case may be,
would represent in the aggregate, less than 15% of the Company's Common Stock on
a fully-diluted basis, (iv) any exercise of Warrants, options, warrants or
convertible securities, or (v) any bona fide firm commitment underwritten public
offering.
ARTICLE ARTICLE V
Transferability
SECTION 5.1 Transfer and Exchange. Prior to the Separation
Date, a Unit Warrant may be exchanged or transferred only together with the
Preferred Stock to which the Unit Warrant was initially attached, and only for
the purpose of effecting or in conjunction with an exchange or transfer of such
Preferred Stock. Prior to the Separation Date, each transfer of a Unit on the
register of the Units shall operate to transfer both the Preferred Stock and the
Unit Warrant comprising such Unit.
The Company shall notify the holders of the Preferred Stock, the
Preferred Stock Transfer Agent and the Warrant Agent of the Separation Date.
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The Company 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, the Company shall provide for the registration of Warrant
Certificates and Unit Certificates and transfers or exchanges of Warrant
Certificates and Unit Certificates as herein provided. All Warrant Certificates
and Unit Certificates issued upon any registration of transfer or exchange of
Warrant Certificates and Unit Certificates shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefit under
this Agreement, as the Warrant Certificates and Unit Certificates surrendered
for such registration of transfer or exchange.
A Holder may transfer its Warrants only by complying with the terms
of this Agreement. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Warrant Agent in the register. Prior to the
registration of any transfer of Warrants or Units by a Holder as provided
herein, the Company, the Warrant Agent, any agent of the Company or the Warrant
Agent may treat the Person in whose name the Warrants or Units 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 or Global Unit shall, by acceptance
of such Global Warrant or Global Unit, agree that transfers of beneficial
interests in such Global Warrant or Global Unit may be effected only through a
book-entry system maintained by the Holder of such Global Warrant (or its
agent), and that ownership of a beneficial interest in the Warrants represented
thereby shall be required to be reflected in a book entry. When Warrant
Certificates or Unit Certificates are presented to the Warrant Agent with a
request to register the transfer or to exchange them for an equal amount of
Warrants or Units of other authorized denominations, subject to the provisions
of Section 5.2 below, the Warrant Agent shall register the transfer or make the
exchange in accordance with the provisions hereof.
To permit registrations of transfer and exchanges, the Company shall
make available to the Warrant Agent a sufficient number of executed Warrant
Certificates and Unit Certificates to effect such registrations of transfers and
exchanges. No service charge shall be made to the Holder for any registration of
transfer or exchange of Warrants or Units, but the Company may require from the
transferring or exchanging Holder payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.4 and exchanges in respect of portions of Warrants not exercised and
the Company may deduct such taxes from any payment of money to be made and such
transfer or exchange shall not be consummated (if such taxes are not deducted in
full) unless or until the Holder shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company and the
Warrant Agent that such tax has been paid.
SECTION 5.2 Registration, Registration of Transfer and Exchange.
(a) Transfer and Exchange of Definitive Warrants or Units. When Definitive
Warrants or Units are presented to the Warrant Agent with a request (i) to
register the transfer of the Definitive Warrant or Unit or (ii) to exchange such
Definitive Warrants or Units for an equal number of Definitive Warrants or Units
of other authorized denominations, the Warrant Agent shall register the transfer
or make the exchange as requested if its requirements for such transactions are
met; provided, however, that the Definitive Warrants or Units so presented have
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23
been duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Warrant Agent, duly executed by the holder thereof or by his
attorney, duly authorized in writing;
(b) Transfer of a Definitive Warrant or Unit for a Beneficial Interest in
Global Warrant. A Definitive Warrant or Unit may be exchanged for a beneficial
interest in the Global Warrant or Unit only upon receipt by the Warrant Agent of
a Definitive Warrant or Unit, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Warrant Agent, together
with written instructions directing the Warrant Agent to make an endorsement on
the Global Warrant or Unit to reflect an increase in the number of Warrants and
Warrant Shares or Units represented by the Global Warrant or Unit, and then the
Warrant Agent shall cancel such Definitive Warrant or Units and cause the number
of Warrants and Warrant Shares or Units represented by the Global Warrant or
Unit to be increased accordingly. If no Global Warrant or Unit is then
outstanding, the Company shall issue and the Warrant Agent shall countersign a
new Global Warrant or Unit representing the appropriate number of Warrants and
Warrant Shares or Units.
(c) Transfer and Exchange of Global Warrant or Unit. The transfer and
exchange of the Global Warrant or Unit or beneficial interests therein shall be
effected through the Depository, in accordance with this Warrant Agreement and
the procedures of the Depository therefor. Notwithstanding any other provisions
of this Warrant Agreement, the Global Warrant or Unit may not be transferred as
a whole except by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a nominee of
such successor Depository: provided, that:
(i) if the Depository notifies the Company that the Depository is
unwilling or unable to continue as Depository for the Global Warrant or
Unit and a successor Depository for the Global Warrant or Unit is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) if the Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Definitive
Warrants or Units under this Warrant Agreement; or
(iii) immediately following the Separation Date; the Company shall
execute and the Warrant Agent shall countersign and deliver, Definitive Warrants
or Units in an aggregate number equal to the number of Warrants or Units
evidenced by the Global Warrant or Unit, in exchange for such Global Warrant or
Unit.
(d) Transfer of a Beneficial Interest in Global Warrant or Unit for a
Definitive Warrant or Unit. Upon receipt by the Warrant Agent of written
transfer instructions (or such other form of instructions as is customary for
the Depository) from the Depository (or its nominee) on behalf of any person
having a beneficial interest in the Global Warrant or Unit, the Warrant Agent
shall cause, in accordance with the standing instructions and procedures
existing between the Depository and the Warrant Agent (the "Standing
Instructions"), the number of Warrants and Warrant Shares or Units represented
by the Global Warrant or Unit to be reduced and, following such reduction, the
Company shall execute and the Warrant Agent shall countersign and deliver to the
transferee,
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as the case may be, a Definitive Warrant or Unit. Definitive Warrants or Units
issued in exchange for a beneficial interest in the Global Warrant or Unit shall
be registered in such names and in such authorized denominations as the
Depository shall instruct the Warrant Agent.
(e) Cancellation and/or Adjustment of Global Warrant or Unit. At such time
as all beneficial interests in the Global Warrant or Unit have either been
exchanged for Definitive Warrants or Units, exercised or cancelled, the Global
Warrant or Unit shall be returned to or retained and cancelled by the Warrant
Agent. At any time prior to such cancellation, if any beneficial interest in the
Global Warrant or Unit is exchanged for Definitive Warrants or Units, exercised
or cancelled, the number of Warrants and Warrant Shares represented by such
Global Warrant or Unit shall be reduced and an endorsement shall be made on such
Global Warrant or Unit by the Warrant Agent to reflect such reduction.
[INTENTIONALLY OMITTED].
SECTION 5.3 Special Transfer Provisions. The following provisions
shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. Subject
to Section 2.5, the following provisions shall apply with respect to the
registration of any proposed transfer of Warrants or Units to any Institutional
Accredited Investor that is not a QIB (excluding Non-U.S. Persons):
(i) The Warrant Agent shall register the transfer of any
Warrant Certificate, if (x)(A) the requested transfer is at
least two years after the Issue Date and such transferor is
not an affiliate of the Company or (B) the proposed transferee
has delivered to the Warrant Agent certificates substantially
in the forms of Exhibit B hereto and (y) in the case of a
transfer pursuant to clause D, E or F of the legend on the
Warrant, the proposed transferee has delivered to the Warrant
Agent and the Company, if requested, an opinion of counsel
acceptable to the Warrant Agent or the Company that such
transfer is in compliance with the Securities Act.
(b) Transfers to QIBs. Subject to Section 2.5, the following
provisions shall apply with respect to the registration of any proposed transfer
of Warrants to a QIB:
(ii) If the Warrants or Units to be transferred are
represented by (x) Restricted Definitive Warrants or Units,
the Warrant Agent shall register the transfer if it has
received from such transferor a certificate substantially in
the form of Exhibit B hereto that the sale has been made in
compliance with the provisions of Rule 144A to a transferee
who has signed the certification provided for on the form of
Warrant Certificate stating, or has otherwise advised the
Company and the Warrant Agent in writing, that it is
purchasing the Warrants or Units for its own account or an
account with respect to which it exercises sole investment
discretion and that
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it and any such account is a QIB within the meaning of Rule
144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A and upon
the transfer referred to in this clause (x), the transferee
shall take an interest in the Global Warrant or Unit or (y) an
interest in the Global Warrant or Unit, the transfer of such
interest may be effected only through the book-entry system
maintained by DTC.
(c) General. By its acceptance of any Warrants or Units represented
by a Warrant Certificate bearing the legend in Section 2.2, each Holder of such
Warrants or Units acknowledges the restrictions on transfer of such Warrants or
Units set forth in this Agreement and in the legend and agrees that it will
transfer such Warrants or Units only as provided in this Agreement. The Warrant
Agent shall not register a transfer of any Warrants or Units unless such
transfer complies with the requirements of this Section 5.4. In connection with
any transfer of Warrants or Units, each Holder agrees by its acceptance of
Warrants or Units to furnish the Warrant Agent or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act and applicable state "blue sky" laws; provided, however,
that the Warrant Agent shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information. The Warrant Agent's only
obligation to enforce the transfer restrictions of this Agreement shall be to
require the certifications and opinions specifically required by this Section
5.4 as a condition to a transfer.
(d) Records. The Warrant Agent shall retain copies of all letters,
notices and other written communications received pursuant to Section 5.3 hereof
or this Section 5.4. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Warrant Agent.
SECTION 5.4 Surrender of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants or Units represented thereby shall, if surrendered to the Company,
be delivered to the Warrant Agent, and all Warrant Certificates surrendered or
so delivered to the Warrant Agent shall be promptly canceled by the Warrant
Agent and shall not be reissued by the Company and, except as provided in this
Article V in case of an exchange or in Article III hereof in case of the
exercise of less than all the Warrants represented thereby or in case of a
mutilated Warrant Certificate, no Warrant Certificate shall be issued hereunder
in lieu thereof. The Warrant Agent shall deliver to the Company from time to
time or otherwise dispose of such canceled Warrant Certificates as the Company
may direct in writing.
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ARTICLE VI
Warrant Agent
SECTION 6.1 Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
provisions of this Agreement and the Warrant Agent hereby accepts such
appointment. The Warrant Agent shall have the powers and authority granted to
and conferred upon it in the Warrant Certificates and hereby and such further
powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
SECTION 6.2 Rights and Duties of Warrant Agent.
(a) Agent for the Company. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligation or
relationship or agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(b) Counsel. The Warrant Agent may consult with counsel satisfactory
to it, and the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the advice of such counsel.
(c) Documents. The Warrant Agent shall be protected and shall incur
no liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
(d) No Implied Obligations. The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which may tend to involve it in any expense or liability the payment of which
within a reasonable time is not, in its opinion, assured to it or for which it
does not receive indemnity if such indemnity is requested. The Warrant Agent
shall not be accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates countersigned by the Warrant Agent
and delivered by it to the Holders or on behalf of the Holders pursuant to this
Agreement or for the application by the Company of the proceeds of the Warrants.
The Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained herein
or in the Warrant Certificates or in the case of the receipt of any written
demand from a Holder with respect to such default, including any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise.
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(e) Not Responsible for Adjustments or Validity of Stock. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require an adjustment of
the Warrant Number or the Exercise Price, or with respect to the nature or
extent of any adjustment when made, or with respect to the method employed, or
herein or in any supplemental agreement provided to be employed, in making the
same. The Warrant Agent shall not be accountable with respect to the validity or
value of any shares of Common Stock or of any securities or property which may
at any time be issued or delivered upon the exercise of any Warrant or upon any
adjustment pursuant to Article IV, and it makes no representation with respect
thereto. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates upon the surrender of any Warrant Certificate
for the purpose of exercise or upon any adjustment pursuant to Article IV, or to
comply with any of the covenants of the Company contained in Article IV, except
for such responsibility as may arise from the failure of the Warrant Agent to
perform its obligations hereunder.
SECTION 6.3 Individual Rights of Warrant Agent. 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 the Company or its
affiliates or become pecuniarily interested in transactions in which the Company
or its affiliates may be interested, or contract with or lend money to the
Company or its affiliates 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 the Company or for any other
legal entity.
SECTION 6.4 Warrant Agent's Disclaimer. The Warrant Agent shall not
be responsible for and makes no representation as to the validity or adequacy of
this Agreement or the Warrant Certificates and it shall not be responsible for
any statement in this Agreement or the Warrant Certificates other than its
countersignature thereon.
SECTION 6.5 Compensation and Indemnity. The Company agrees to pay
the Warrant Agent the compensation to be agreed upon with the Company for all
services to be rendered by the Warrant Agent and to reimburse the Warrant Agent
upon request for all reasonable out-of-pocket expenses incurred by it, including
the reasonable compensation and expenses of the Warrant Agent's agents and
counsel, in connection with the services rendered hereunder. The Company shall
indemnify the Warrant Agent against any loss, liability or expense (including
reasonable agents' and attorneys' fees and expenses) incurred by it without
negligence on its part arising out of or in connection with the acceptance or
performance of its duties under this Agreement. The Warrant Agent shall notify
the Company promptly of any claim for which it may seek indemnity. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Warrant Agent through willful misconduct or gross negligence.
The Company's payment obligations pursuant to this Section 6.5 shall survive the
termination of this Agreement.
SECTION 6.6 Successor Warrant Agent.
(a) The Company To Provide Warrant Agent. The Company agrees for the
benefit of the Holders that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
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(b) Resignation and Removal. The Warrant Agent may at any time
resign by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than 90 days after the date
on which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective. Any removal under this
Section 6.6 shall take effect upon the appointment by the Company as hereinafter
provided of a successor Warrant Agent (which shall be a bank or trust company
authorized under the laws of the jurisdiction of its organization to exercise
corporate trust powers) and the acceptance of such appointment by such successor
Warrant Agent.
(c) The Company To Appoint Successor. In case at any time the
Warrant Agent shall resign, or shall be removed, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Warrant Agent or its property or affairs, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered in
respect of the Warrant Agent in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or similar law; or a decree order by a court having
jurisdiction in the premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar
official) of the Warrant Agent or of its property or affairs, or any public
officer shall take charge or control of the Warrant Agent or of its property or
affairs for the purpose of rehabilitation, conservation, winding up of or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent (or, in the absence of such appointment within 60 days after the
notice of resignation or removal, either party to the underwriting agreement may
petition the appointment of a successor by a court of competent jurisdiction.)
Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by
the successor Warrant Agent of such appointment, the Warrant Agent shall cease
to be Warrant Agent hereunder; provided, however, that in the event of the
resignation of the Warrant Agent under this subsection (c), such resignation
shall be effective on the earlier of (i) the date specified in the Warrant
Agent's notice of resignation and (ii) the appointment and acceptance of a
successor Warrant Agent hereunder. As soon as practicable after appointment of
the successor Warrant Agent, the Company shall cause written notice of the
change in the Warrant Agent to be given to each of the registered holders of the
Warrants in the manner provided for in Section 7.7 hereof. However, failure to
give any notice provided for in this clause (c) or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor Warrant Agent, as the case may be.
(d) Successor Expressly To Assume Duties. Any successor Warrant
Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor
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Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the rights and obligations of such predecessor with like effect as if
originally named as Warrant Agent hereunder, and such predecessor, upon payment
of its charges and disbursements then unpaid, shall thereupon become obligated
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.
(e) Successor by Merger. Any corporation into which the Warrant
Agent hereunder may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all or
substantially all of its corporate trust business; provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VII
Miscellaneous
SECTION 7.1 [INTENTIONALLY OMITTED.]
SECTION 7.2 SEC Reports and Other Information. Notwithstanding that
the Company may not be subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall, for all periods ending after the
date of this Warrant Agreement, file with the SEC and thereupon provide the
Warrant Agent and Holders with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections, provided however, that the Company shall not be obligated to file
such documents and reports with the SEC if the SEC will not accept them.
SECTION 7.3 Rule 144A. The Company hereby agrees with each Holder,
for so long as any Warrants or Warrant Shares remain outstanding and such
Warrants or Warrant Shares are "restricted securities" as defined in Rule 144
under the Securities Act and during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to any Holder or beneficial owner of Warrants or Warrant
Shares in connection with any sale thereof and any prospective purchaser of such
Warrants or Warrant Shares from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Warrants or Warrant Shares pursuant to Rule 144A.
SECTION 7.4 Persons Benefitting. Nothing in this Agreement is
intended or shall be construed to confer upon any Person other than the Company,
the Warrant Agent and the Holders any right, remedy or claim under or by reason
of this agreement or any part hereof.
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SECTION 7.5 Rights of Holders. Except as expressly contemplated
herein, holders of unexercised Warrants are not entitled (i) to receive
dividends or other distributions with respect to the Common Stock, (ii) to
receive notice of or vote at any meeting of the stockholders, (iii) to consent
to any action of the stockholders, (iv) to exercise any preemptive right or to
receive notice of any other proceedings of the Company or (v) to exercise any
other rights whatsoever as stockholders of the Company.
SECTION 7.6 Amendment. This Agreement may be amended by the parties
hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defects or
inconsistencies contained herein or making any other change that does not
materially adversely affect the rights of the Holders; provided, however, that
the Company determines that such change shall not materially adversely affect
the rights of the holders, which such determination may be relied upon by the
Warrant Agent. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of the Holders shall require the written consent
of the Holders of a majority of the then outstanding Warrants. The consent of
each Holder affected shall be required for any amendment pursuant to which the
Exercise Price would be increased or the number of Warrant Shares purchasable
upon exercise of Warrants would be decreased (other than pursuant to adjustments
provided in Article IV as of the Issue Date of the Warrants). In determining
whether the Holders of the required number of Warrants have concurred in any
direction, waiver or consent, Warrants owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Warrant
Agent shall be protected in relying on any such direction, waiver or consent,
only Warrants which the Warrant Agent knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Warrants outstanding at the
time shall be considered in any such determination.
SECTION 7.7 Notices. Any notice or communication shall be in writing
and delivered in Person or mailed by first-class mail addressed as follows:
if to the Company:
American Restaurant Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
if to the Warrant Agent:
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U. S. Trust Company of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
The Company or the Warrant Agent by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed to
the Holder at the Holder's address as it appears on the register in which the
Company shall provide for the registration of Warrants and Warrant Shares and of
transfers and exchanges of Warrants and Warrant Shares and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 7.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY, ON BEHALF OF
ITSELF, HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL
AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY
SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY,
ON BEHALF OF ITSELF, IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 7.9 Successors. All agreements of the Company in this
Agreement and the Warrant Certificates shall bind its successors. All agreements
of the Warrant Agent in this Agreement shall bind its successors.
SECTION 7.10 Multiple Originals. The parties may sign any number of
copies of this Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Agreement.
SECTION 7.11 Table of Contents. The table of contents and headings
of the Articles and Sections of this Agreement have been inserted for
convenience of reference
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only, are not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.
SECTION 7.12 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
SECTION 7.13 Further Assurances. From time to time on and after the
date hereof, the Company shall deliver or cause to be delivered to the Warrant
Agent such further documents and instruments and shall do and cause to be done
such further acts as the Warrant Agent shall reasonably request (it being
understood that the Warrant Agent shall have no obligation to make such request)
to carry out more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected hereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
AMERICAN RESTAURANT GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------
Title: V.P. & Chief Financial Officer
--------------------------------
U.S. TRUST COMPANY OF CALIFORNIA, N.A., as
Warrant Agent,
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------
Title: Authorized Officer
-------------------
38
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) UNDER
THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH AMERICAN RESTAURANT GROUP, INC. ("THE
COMPANY") ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND
WITHOUT DIRECTED SELLING EFFORTS WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D),(E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE WARRANT AGENT.
39
2
[Unless and until it is exchanged in whole or in part for Warrants
in definitive form, this Warrant may not be transferred except as a whole by the
depository to a nominee of the depository or by a nominee of the depository to
the depository or another nominee of the depository or by the depository or any
such nominee to a successor depository or a nominee of such successor
depository. The Depository Trust Company ("DTC") (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) shall act as the depository until a successor shall be appointed by the
Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]*
--------
* To be included only if the Warrant is in global form.
40
EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT AGENT AS PROVIDED HEREIN
[Prior to the Separation Date (as defined in the Warrant Agreement),
this Warrant Certificate cannot be transferred or exchanged unless attached to
Preferred Stock.]*
WARRANTS TO PURCHASE COMMON STOCK OF
AMERICAN RESTAURANT GROUP, INC.
VOID AFTER 5 P.M. NEW YORK CITY TIME ON THE EARLIER
OF THE PUBLIC COMPANY DATE (AS DEFINED IN THE
WARRANT AGREEMENT) AND AUGUST 15, 2008
No. [ ] Certificate for ______ Warrants
THIS CERTIFIES THAT, [ ], is the registered holder of the
number of Warrants set forth above (the "Warrants"). Each Warrant entitles the
Holder thereof, at its option and subject to the provisions contained herein and
in the Warrant Agreement referred to below, to purchase from American Restaurant
Group, Inc., a Delaware corporation ("the Company"), initially 2.66143 shares of
Common Stock, $0.01 par value, of the Company (the "Common Stock") at the per
share exercise price of $ .01 (the "Exercise Price"). This Warrant Certificate
shall terminate and become void as of the close of business on the earlier of
(i) the Public Company Date (as defined in the Warrant Agreement) and (ii)
August 15, 2008 (the "Expiration Date") or upon the exercise hereof as to all
the shares of Common Stock subject hereto. The number of shares purchasable upon
exercise of the Warrants and the Exercise Price per share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of February 25, 1998 (the "Warrant Agreement"),
between the Company and U. S. Trust Company of California, N.A. (the "Warrant
Agent," which term includes any successor Warrant Agent under the Warrant
Agreement), and is subject to the terms and provisions contained in the Warrant
Agreement, 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 statement of the respective rights,
limitations of rights, duties and obligations of the Company, the Warrant Agent
and the Holders of the Warrants. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Warrant Agreement. A copy of the
Warrant Agreement may be obtained for inspection by the Holder hereof upon
written request to the Warrant Agent at U.S. Trust Company of California, N.A.,
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of
Corporate Trust Department.
In no event shall a Holder be entitled to exercise a Warrant, unless
(i) a registration statement filed under the Securities Act in respect of the
issuance of the Warrant Shares is then effective; provided, however, that in no
event shall the Company be required to file a Registration Statement in order to
permit a Holder to exercise a Warrant, or (ii) an exemption from the
registration requirements is available under the Securities Act for the
--------
* To be included only if the Warrant is a Unit Warrant.
41
2
issuance of the Warrant Shares (and the delivery of any other securities for
which the Warrants may at the time be exercisable) at the time of such exercise
and, if requested by the Company, an opinion of counsel, satisfactory in form
and substance to the Company, confirms such exemption.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by presentation of this Warrant Certificate.
The term "Holder" as used herein shall mean, prior to the Separation
Date (as defined in the Warrant Agreement), the registered owner of the
Company's Preferred Stock to which this Warrant Certificate is initially
attached, and after such Separation Date, the person in whose name at the time
this Warrant Certificate shall be registered upon the books to be maintained by
the Warrant Agent for that purpose pursuant to Section 5.1 of the Warrant
Agreement.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time or
from time to time on any Business Day commencing on the Issue Date; provided,
however, that no Warrant shall be exercisable after the Expiration Date.
The Holder may exercise the Warrants evidenced hereby by providing
certain information set forth on the back hereof, and by paying in full in cash
or by certified check or official bank check or by bank wire transfer, in each
case, in immediately available funds, the Warrant Price for each Warrant
exercised to the Warrant Agent and by surrendering this Warrant Certificate,
with the purchase form on the back hereof duly executed, at the corporate trust
office of Warrant Agent currently at the address specified on the reverse
hereof, and upon compliance with and subject to the conditions set forth herein
and in the Warrant Agreement.
In lieu of exercising the Warrant by paying in full the Exercise
Price, the Warrant holder may, from time to time, convert this Warrant (a
"Warrant Conversion"), in whole or in part, into a number of shares of Common
Stock determined by dividing (a) the aggregate Current Market Value of the
number of Warrant Shares represented by the Warrants converted, minus the
aggregate Exercise Price for such Warrant Shares (and any other required
amounts), by (b) the Current Market Value of one Warrant Share.
Prior to the Separation Date, this Warrant Certificate may be
exchanged or transferred only together with the Preferred Stock to which this
Warrant Certificate was initially attached, and only for the purpose of
effecting, or in conjunction with, an exchange or transfer of such Preferred
Stock. After such date, this Warrant Certificate may be registered when this
Warrant Certificate is surrendered at the corporate trust office of the Warrant
Agent by the registered owner or his assigns, in person or by any attorney duly
authorized in writing, in the manner and subject to the limitations provided in
the Warrant Agreement.
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the shares of Common Stock as to which the Warrants shall not have
been exercised. Except as provided in the immediately preceding paragraph, and
subject to the terms of the Warrant Agreement, after countersignature
42
3
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the corporate trust office of the
Warrant Agent by presenting this Warrant Certificate properly endorsed with a
request to exchange this Warrant Certificate for Warrant Certificates
representing the same aggregate number of Warrants. No fractional Warrant Shares
will be issued upon the exercise of the Warrants, but the Company shall pay an
amount in cash equal to the Market Price for one Warrant Share on the trading
day immediately preceding the date the Warrant is exercised, multiplied by the
fraction of a Warrant Share that would be issuable on the exercise of any
Warrant.
The Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with the transfer
or exchange of the Warrant Certificates pursuant to Section 5.2 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
All shares of Common Stock issuable by the Company upon the exercise
of the Warrants shall, upon such issue, be duly and validly issued and fully
paid and nonassessable.
The Holder in whose name the Warrant Certificate is registered may
be deemed and treated by the Company and the Warrant Agent as the absolute owner
of the Warrant Certificate for all purposes whatsoever and neither the Company
nor the Warrant Agent shall be affected by notice to the contrary.
The Warrants do not entitle any holder hereof to any of the rights
of a stockholder of the Company.
43
4
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
AMERICAN RESTAURANT GROUP, INC.
By:
---------------------------
Name:
---------------------------
Title:
--------------------------
Attest:
---------------------
Secretary
DATED:
Countersigned:
U.S. Trust Company of California, N.A.,
as Warrant Agent
By:
----------------------
Authorized Signatory
44
SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS*
The following exchanges of a part of this Global Warrant for definitive Warrants
have been made:
Number of
Warrants in
Amount of this Global
increase/ Warrant Signature of
decrease in Number following authorized
Date of of Warrants in such increase/ officer of
Exchange this Global Warrant decrease Warrant Agent
--------
* To be included only if the Warrant is in global form.
45
FORM OF ELECTION TO PURCHASE OR CONVERT
(To Be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive [_________ shares of Common
Stock and herewith tenders payment for such shares to the order of American
Restaurant Group, Inc. in the amount of $___________ in accordance with the
terms hereof.] [the number of shares of Common Stock determined by dividing (a)
the aggregate Current Market Value of the number of shares of Common Stock
represented by the Warrants hereby converted pursuant to a Warrant Conversion,
minus the aggregate Exercise Price for such shares (and any other required
amounts) by (b) the Current Market Price of one share of Common Stock.]
The undersigned requests that a certificate for such shares be
registered in the name of___________________, whose address is _______________
and that such shares be delivered to _______________ whose address is
________________.
If said number of shares is less than all of the shares of Common
Stock purchasable or issuable upon conversion hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
such shares be registered in the name of___________________________ , whose
address is___________________ , and that such Warrant Certificate be delivered
to____________________________ , whose address is _______________________.
Signature(s):
---------------------
NOTE: The above signature(s) must correspond
with the name written upon the face of
this Warrant Certificate in every
particular, without alteration or
enlargement or any change whatever. If
this Warrant is held of record by two or
more joint owners, all such owners must
sign.
Date:
--------------------------
Signature Guaranteed*:
-------------------
NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
program:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP):
(3) The Stock Exchange Medallian Program (SEMP).
46
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant Certificate)
FOR VALUE RECEIVED, hereby sells, assigns
and transfers unto whose address is
and whose social security number or other identifying number is ,
the within Warrant Certificate, together with all rights, title and interest
therein and to the Warrants represented thereby, and does hereby irrevocably
constitute and appoint , attorney, to transfer said Warrant Certificate on
the books of the within-named Company, with full power of substitution in the
premises.
Signature(s):
----------------------
NOTE: The above signature(s) must correspond with the
name written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change whatever.
If this Warrant is held of record by two or more
joint owners, all such owners must sign.
Date:
------------------
Signature Guaranteed*:
-----------------
NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
program:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP):
(3) The Stock Exchange Medallian Program (SEMP).
47
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of American Restaurant
Group, Inc.
This Certificate relates to Warrants initially to purchase _________
shares of Common Stock of American Restaurant Group, Inc. held in* |_|
book-entry or * |_| definitive form by (the "Transferor").
The Transferor* by written order, has requested the Warrant Agent:
|_| to deliver, in exchange for its beneficial interest in the Global Warrant
held by the depository, a Warrant or Warrants in definitive, registered
form of authorized denominations and an aggregate amount equal to its
beneficial interest in such Global Warrant (or the portion thereof
indicated above); or
|_| to exchange or register the transfer of a Warrant or Warrants. In
connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the
Warrant Agreement relating to such Warrants and that the transfer of this
Warrant is pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act") or does not
require registration under the Securities Act because such Warrant:
|_| is being acquired for the Transferor's own account, without
transfer;
|_| is being transferred pursuant to an effective registration
statement;
|_| is being transferred to a qualified institutional buyer (as defined
in Rule144A under the Securities Act), in reliance on such Rule
144A;
|_| is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
|_| is being transferred pursuant to Rule 144 under the Securities Act;
**
48
2
|_| is being transferred pursuant to another exemption from the
registration requirements of the Securities Act
(explain:___________________ ).**
[INSERT NAME OF TRANSFEROR]
By: Date:
--------------- ----------------
---------
* Check applicable box.
** If this box is check, this certificate must be accompanied by an opinion
of counsel to the effect that such transfer is in compliance with the
Securities Act.
49
EXHIBIT C
[FORM OF FACE OF UNIT CERTIFICATE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) UNDER
THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH AMERICAN RESTAURANT GROUP, INC. ("THE
COMPANY") ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND
WITHOUT DIRECTED SELLING EFFORTS WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D),(E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE WARRANT AGENT.
[Unless and until it is exchanged in whole or in part for Units in
definitive form, this Unit may not be transferred except as a whole by the
depository to a nominee of the depository or by a nominee of the depository to
the depository or another nominee of the depository or by the depository or any
such nominee to a successor depository or a nominee of such successor
50
2
depository. The Depository Trust Company ("DTC") (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) shall act as the depository until a successor shall be appointed by the
Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]**
--------
* To be included only if the Unit is in global form.
51
3
UNTIL THE SEPARATION DATE, THIS UNIT CERTIFICATE SHALL BE ATTACHED TO THE
PREFERRED STOCK CERTIFICATE AND WARRANT CERTIFICATE THAT EVIDENCE THE PREFERRED
STOCK AND WARRANTS THAT COMPRISE THIS UNIT.
AMERICAN RESTAURANT GROUP, INC.
UNITS
CONSISTING OF 12% SENIOR PAY-IN-KIND EXCHANGEABLE
PREFERRED STOCK AND COMMON STOCK PURCHASE WARRANTS
No. [ ] [ ] Units
CUSIP [ ]
THIS CERTIFIES THAT, [ ] is the registered holder of the
number of Units set forth above (the "Units"). Each Unit consists of one share
of 12% Senior Pay-in-Kind Exchangeable Preferred Stock (the "Preferred Stock")
of American Restaurant Group, Inc., a Delaware corporation (the "Company") and
one Warrant to purchase 2.66143 shares of Common Stock, par value $0.01 per
share, of the Company for $0.01 per share (subject to adjustment) at any time
before the close of business on the earlier to occur of the Public Company Date
and August 15, 2008 (the "Expiration Date"). The Preferred Stock and the
Warrants are not separately transferable until the earlier of (i) August 15,
1998, (ii) the date of commencement of the Exchange Offer, (iii) such earlier
date as may be determined by ▇▇▇▇▇▇▇▇▇ & Company, Inc., (iv) the date on which
the Company mails a notice of a Change of Control to holders of the Preferred
Stock, (v) in the event that the Company elects to redeem the Preferred Stock,
the date on which the Company mails notice thereof to the holders of the
Preferred Stock and (vi) the date on which the Company consummates a public
offering of Comon Stock (such earliest date being the "Separation Date"). The
terms of the Warrants are governed by a Warrant Agreement dated as of February
25, 1998 (the "Warrant Agreement") between the Company and U.S. Trust Company of
California, N.A., as Warrant Agent (the "Warrant Agent"), and are subject to the
terms and provisions contained therein, to all of which terms and provisions the
holder of this Unit consents by acceptance hereof. Capitalized terms used and
not otherwise defined herein shall have the respective meanings set forth in the
Warrant Agreement.
Reference is made to the further provisions of the Preferred Stock
and the Warrants evidenced by this Unit on the Preferred Stock Certificate and
Warrant Certificate attached hereto, which will, for all purposes, have the same
effect as if set forth at this place.
52
4
IN WITNESS WHEREOF, the Company has caused this Unit to be signed
manually or by facsimile by its duly authorized officer.
AMERICAN RESTAURANT GROUP, INC.
By:
-------------------------
Attest:
-----------------------------
Secretary
DATED:
Countersigned:
[ ],
as Warrant Agent
By:
--------------------------
Authorized Signatory
53
SCHEDULE OF EXCHANGES OF DEFINITIVE UNITS*
The following exchanges of a part of this Global Unit for definitive Units have
been made:
Number of
Units in
Amount of this Global
increase/ Unit Signature of
decrease in Number following authorized
Date of of Units in such increase/ officer of
Exchange this Global Unit decrease Warrant Agent
--------
* To be included only if the Unit is in global form.
54
FORM OF ASSIGNMENT
(To be signed only upon assignment of Unit Certificate)
FOR VALUE RECEIVED, hereby sells, assigns
and transfers unto whose address is
and whose social security number or other identifying number is ,
the within Unit Certificate, together with all rights, title and interest
therein and to the Units represented thereby, and does hereby irrevocably
constitute and appoint , attorney, to transfer said Unit Certificate on
the books of the within-named Company, with full power of substitution in the
premises.
Signature(s):
---------------------------
NOTE: The above signature(s) must correspond with
the name written upon the face of this Unit
Certificate in every particular, without
alteration or enlargement or any change
whatever. If this Unit is held of record by
two or more joint owners, all such owners
must sign.
Date:
-------------------------
Signature Guaranteed*:
---------------------
NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
program:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP):
(3) The Stock Exchange Medallian Program (SEMP).