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WARRANT AGREEMENT
Dated as of February 2, 2000
By and Between
AAVID THERMAL TECHNOLOGIES, INC.
and
BANKERS TRUST COMPANY
as Warrant Agent
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Warrants to Purchase Class A Common Stock, Par Value
$.0001 Per Share, and Class H
Common Stock, Par Value $.0001 Per Share
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TABLE OF CONTENTS
Page
Article I Issuance, Form, Execution, Delivery And Registration Of Warrant Certificates ....................2
Section 1.01. Issuance Of Warrants................................................................2
Section 1.02. Form Of Warrant Certificates .......................................................2
Section 1.03. Execution Of Warrant Certificates ..................................................3
Section 1.04. Authentication And Delivery ........................................................3
Section 1.05. Temporary Warrant Certificates .....................................................4
Section 1.06. Separation Of Warrants And Notes ...................................................4
Section 1.07. Registration .......................................................................5
Section 1.08. Registration Of Transfers Or Exchanges .............................................5
Section 1.09. Lost, Stolen, Destroyed, Defaced Or Mutilated Warrant Certificates.................11
Section 1.10. Offices For Exercise, Etc .........................................................12
Section 1.11. Book-Entry Provisions For Global Warrants..........................................13
Article Ii Duration, Exercise Of Warrants; Exercise Price And Repurchase Of Warrants
14
Section 2.01. Duration Of Warrants ..............................................................14
Section 2.02. Exercise, Exercise Price, Settlement And Delivery .................................15
Section 2.03. Cancellation Of Warrant Certificates ..............................................19
Section 2.04. Notice Of An Exercise Event .......................................................19
Article Iii Other Provisions Relating To Rights Of Holders Of Warrants
Section 3.01. Enforcement Of Rights .............................................................19
Article Iv Certain Covenants Of The Company
Section 4.01. Payment Of Taxes ..................................................................20
Section 4.02. Rules 144 And 144a ................................................................20
Section 4.03. Form Of Initial Public Equity Offering ............................................20
Section 4.04. Registration Of Shares ............................................................20
Article V Adjustments
Section 5.01. Adjustment Of Exercise Rate; Notices ..............................................21
Section 5.02. Fractional Shares .................................................................26
Section 5.03. Certain Distributions .............................................................27
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Article Vi Concerning The Warrant Agent
Section 6.01. Warrant Agent .....................................................................27
Section 6.02. Conditions Of Warrant Agent's Obligations .........................................28
Section 6.03. Resignation And Appointment Of Successor ..........................................32
Article Vii Miscellaneous
Section 7.01. Amendment .........................................................................33
Section 7.02. Notices And Demands To The Company And Warrant Agent ..............................34
Section 7.03. Addresses For Notices To Parties And For Transmission Of Documents ................34
Section 7.04. Notices To Holders ................................................................35
Section 7.05. Applicable Law; Submission
To Jurisdiction ...................................................................35
Section 7.06. Persons Having Rights Under Agreement .............................................35
Section 7.07. Headings ..........................................................................36
Section 7.08. Counterparts ......................................................................36
Section 7.09. Inspection Of Agreement ...........................................................36
Section 7.10. Availability Of Equitable Remedies ................................................36
Section 7.11. Obtaining Of Governmental Approvals ...............................................36
EXHIBIT A - Form of Warrant Certificate.........................................................A-1
EXHIBIT B - Form of Legend for Global Warrant...................................................B-1
EXHIBIT C - Certificate To Be Delivered upon
Exchange or Registration of Trans-
fer of Warrants.................................................................C-1
EXHIBIT D - Form of Transferee Certificate for
Institutional Accredited Investors................................................D-1
EXHIBIT E - Form of Transferee Certificate for
Regulation S Transfers............................................................E-1
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INDEX OF DEFINED TERMS
Defined Term Section
Affiliate............................................................................. 5.01(b)
Agreement............................................................................. Recitals
Business Day.......................................................................... 2.01
Capital Stock......................................................................... 5.01(1)
Cashless Exercise..................................................................... 2.02(c)
Cashless Exercise Ratio............................................................... 2.02(c)
Class A Common Stock.................................................................. Recitals
Class H Common Stock.................................................................. Recitals
Common Stock.......................................................................... Recitals
Company............................................................................... Recitals
Current Market Value.................................................................. 5.01(1)
Definitive Warrants................................................................... 1.02
Depository............................................................................ 1.08
Distribution.......................................................................... 5.03
Distribution Rights................................................................... 5.03
Election To Exercise.................................................................. 2.02(b)
Exercisability Date................................................................... 2.02(a)
Exercise Date......................................................................... 2.02(d)
Exercise Event........................................................................ 2.02(a)
Exercise Price........................................................................ 2.02(a)
Exercise Rate......................................................................... 2.02(a)
Expiration Date....................................................................... 2.01
Fundamental Transaction............................................................... 5.01(d)
Global Shares......................................................................... 2.02(f)
Global Warrants....................................................................... 1.02
Indenture............................................................................. Recitals
Independent Financial Expert.......................................................... 5.01(1)
Initial Public Equity Offering........................................................ 2.02(a)
Initial Purchasers.................................................................... Recitals
Notes................................................................................. Recitals
Notice Date........................................................................... 2.05(b)
Officers' Certificate................................................................. 1.08(d)
144A Global Warrant................................................................... 1.03
Person................................................................................ 2.02(a)
Private Placement Legend.............................................................. 1.08(g)
Prospectus............................................................................ 4.02
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Registrar............................................................................. 1.07
Registration Rights Agreement......................................................... Recitals
Regulation S Global Warrant........................................................... 1.03
Related Parties....................................................................... 6.02(e)
Requisite Warrant Holders............................................................. 7.01
Resale Restriction Termination Date................................................... 1.08
Securities Act........................................................................ 1.06
Separability Date..................................................................... 1.06
Separation............................................................................ 1.06
Shares................................................................................ 1.01
Subject Class......................................................................... 4.04
Surviving Person...................................................................... 5.01(d)
Time of Determination................................................................. 5.01(1)
Trustee............................................................................... Recitals
Units................................................................................. Recitals
Warrant Agent......................................................................... Recitals
Warrant Agent Office.................................................................. 1.10
Warrant Certificates.................................................................. Recitals
Warrant Exercise Office............................................................... 2.02(b)
Warrant Register...................................................................... 1.07
Warrants.............................................................................. Recitals
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of February 2, 2000 by and
between AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (together
with any successor thereto, the "Company"), and BANKERS TRUST COMPANY, as
warrant agent (with any successor Warrant Agent, the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement
(the "Purchase Agreement") dated January 31, 2000 with CIBC World Markets Corp.
("CIBC") and FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. (together, the "Initial
Purchasers") in which the Company has agreed to sell to the Initial Purchasers
150,000 units (the "Units") consisting in the aggregate of (i) $150,000,000
aggregate principal amount of 12-3/4% Senior Subordinated Notes due 2007 (the
"Notes") of the Company to be issued under an indenture dated as of February 2,
2000 (the "Indenture"), among the Company, the Guarantors party thereto and
Bankers Trust Company, as trustee (in such capacity, the "Trustee"), and (ii)
Warrants (the "Warrants"), each Warrant initially entitling the holder thereof
to purchase 0.0004 shares of Class A Common Stock, par value $.0001 per share,
of the Company (the "Class A Common Stock"), and 0.0004 shares of Class H Common
Stock, par value $.0001 per share, of the Company (the "Class H Common Stock"
and, together with the Class A Common Stock, the "Common Stock"). The
certificates evidencing the Warrants are herein referred to collectively as the
"Warrant Certificates"; and
WHEREAS, each Unit will consist of one Note in the principal
amount of $1,000 and one Warrant; the Notes and the Warrants comprising part of
the Units shall not be separately transferable until the Separability Date (as
defined below); and
WHEREAS, the holders of the Warrants are entitled to the
benefits of a Common Stock Registration Rights Agreement dated as of February 2,
2000 between the Company, certain investors in the Company and the Initial
Purchasers (the "Registration Rights Agreement"); and
WHEREAS, the Company desires the Warrant Agent as warrant
agent to assist the Company in connection with the issuance, exchange,
cancellation, replacement and exercise of the Warrants, and in this Agreement
wishes to set forth, among other things, the terms and conditions on which the
Warrants may be issued, exchanged, cancelled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Warrants comprising part
of the Units shall be originally issued in connection with the issuance of the
Units and such Warrants shall not be separately transferable from the Notes
until on or after the Separability Date as provided in Section 1.06 hereof.
Each Warrant Certificate shall evidence the number of Warrants
specified therein, and each Warrant evidenced thereby shall, when exercisable as
provided herein and therein, represent the right, subject to the provisions
contained herein and therein, to purchase from the Company (and the Company
shall issue and sell to the holder of such Warrant upon exercise thereof) 0.0004
fully paid and non-assessable shares of the Company's Class A Common Stock at an
exercise price of $0.01 per share and 0.0004 fully paid and non-assessable
shares of the Company's Class H Common Stock at an exercise price of $0.01 per
share. The shares purchasable upon exercise of a Warrant are hereinafter
referred to as the "Shares" and are subject to adjustment as provided herein and
in the Warrant, and, unless the context otherwise requires, such term shall also
include any other securities or property purchasable and deliverable upon
exercise of a Warrant as provided in Article V, subject to adjustment as
provided herein and in the Warrant.
SECTION 1.02. Form of Warrant Certificates. The Warrant
Certificates will initially be issued either in global form as 144A Global
Warrants or Regulation S Global Warrants (collectively, the "Global Warrants"),
substantially in the form of Exhibit A hereto, or in registered form as
definitive Warrant Certificates (the "Definitive Warrants") substantially in the
form of Exhibit A attached hereto. Any Global Warrants to be delivered pursuant
to this Agreement shall bear the legend set forth in Exhibit B attached hereto.
Such Global Warrants shall represent such of the outstanding Warrants as shall
be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Warrants from time to time endorsed thereon and
that the aggregate amount of outstanding Warrants represented thereby may from
time to time be reduced or increased, as appropriate. Any endorsement of a
Global Warrant to reflect the amount of any increase or decrease in the amount
of outstanding Warrants represented thereby shall be made by the Warrant Agent
and the Depository (as defined below) in accordance with instructions given by
the holder thereof. The Depository Trust Company shall act as the Depository
with respect to the Global Warrants until a successor shall be appointed by the
Company and the Warrant Agent. Upon written request, a holder of record of
Warrants may receive from the Warrant Agent or the Depository Definitive
Warrants as set forth in Section 1.08 hereof.
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"144A Global Warrant" means a permanent global security in
registered form representing the aggregate principal amount of Warrants sold in
reliance on Rule 144A.
"Regulation S Global Warrant" means a permanent global
security in registered form representing the aggregate principal amount of
Warrants sold in reliance on Regulation S under the Securities Act.
SECTION 1.03. Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. Typographical and other
minor errors or defects in any such reproduction of any such signature shall not
affect the validity or enforceability of any Warrant Certificate that has been
duly countersigned and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the
immediately following paragraph, Warrant Certificates shall be authenticated by
manual signature and dated the date of authentication by the Warrant Agent and
shall not be valid for any purpose unless so authenticated and dated. The
Warrant Certificates shall be numbered and shall be registered in the Warrant
Register (as defined in Section 1.07 hereof).
Upon the receipt by the Warrant Agent of a written order of
the Company, which order shall be signed by the chairman of its Board of
Directors, its president or any vice president and attested by its secretary or
assistant secretary, and shall specify the amount of Warrants to be
authenticated, whether the Warrants are to be Global Warrants or Definitive
Warrants, the date of such Warrants and such other information as the Warrant
Agent may reasonably request, without any further action by the Company, the
Warrant Agent is authorized, upon receipt from the Company at any time and from
time to time of the Warrant Certificates, duly executed as provided in Section
1.03 hereof, to authenticate the Warrant Certificates and upon the holder's
request deliver them. Such authentication shall be by a duly
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authorized signatory of the Warrant Agent (although it shall not be necessary
for the same signatory to sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who
shall have authenticated any of the Warrant Certificates shall cease to be such
authorized signatory before the Warrant Certificate shall be disposed of by the
Company or the Warrant Agent, such Warrant Certificate nevertheless may be
delivered or disposed of as though the person who authenticated such Warrant
Certificate had not ceased to be such authorized signatory of the Warrant Agent;
and any Warrant Certificate may be authenticated on behalf of the Warrant Agent
by such persons as, at the actual time of authentication of such Warrant
Certificates, shall be the duly authorized signatories of the Warrant Agent,
although at the time of the execution and delivery of this Agreement any such
person is not such an authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates
shall be in substantially the form set forth in Exhibit A hereto.
SECTION 1.05. Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and the
Warrant Agent shall authenticate and deliver, temporary Warrant Certificates,
which are printed, lithographed, typewritten or otherwise produced,
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Warrant
Certificates may determine, as evidenced by their execution of such Warrant
Certificates.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall authenticate and deliver in exchange therefor, one or more definitive
Warrant Certificates representing in the aggregate a like number of Warrants.
Until so exchanged, the holder of a temporary Warrant Certificate shall in all
respects be entitled to the same benefits under this Agreement as a holder of a
definitive Warrant Certificate.
SECTION 1.06. Separation of Warrants and Notes. The Notes and
the Warrants will not be separately transferable until the Separability Date.
"Separability Date" shall mean the earliest to occur of: (1) 180 days after the
Issue Date (as defined in the Indenture); (2) the occurrence of a Change of
Control (as defined in the Indenture); (3) the
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occurrence of an Event of Default (as defined in the Indenture); (4) the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Notes or the Exchange Notes
(as defined in the Indenture); or (5) such earlier date as determined by CIBC in
its discretion and specified to the Company, the Trustee and the Warrant Agent
in writing. The surrender of a Unit certificate for separate Warrant
certificates and Note certificates is herein referred to as a "Separation." The
Company shall promptly notify the Warrant Agent of the Separability Date.
Following the Separability Date, no Unit certificates shall be issued.
SECTION 1.07. Registration. The Company will keep, at the
office or agency maintained by the Company for such purpose, a register or
registers in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of, and registration of transfer
and exchange of, Warrants as provided in this Article. Each person designated by
the Company from time to time as a person authorized to register the transfer
and exchange of the Warrants is hereinafter called, individually and
collectively, the "Registrar." The Company hereby initially appoints the Warrant
Agent as Registrar. Upon written notice to the Warrant Agent and any acting
Registrar, the Company may appoint a successor Registrar for such purposes.
The Company will at all times designate one person (who may be
the Company and who need not be a Registrar) to act as repository of a master
list of names and addresses of the holders of Warrants (the "Warrant Register").
The Warrant Agent will act as such repository unless and until some other person
is, by written notice from the Company to the Warrant Agent and the Registrar,
designated by the Company to act as such. The Company shall cause each Registrar
to furnish to such repository, on a current basis, such information as to all
registrations of transfer and exchanges effected by such Registrar, as may be
necessary to enable such repository to maintain the Warrant Register on as
current a basis as is practicable.
SECTION 1.08. Registration of Transfers or Exchanges.
(a) Transfer or Exchange of Definitive Warrants. When
Definitive Warrants are presented to the Warrant Agent with a request from the
holder:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.08 hereof for such
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transactions are met; provided, however, that the Definitive Warrants presented
or surrendered by a holder for registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer or exchange in form satisfactory to the Company
and the Warrant Agent, duly executed by such holder or by his
attorney, duly authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not
been registered under the Securities Act and are presented for
transfer or exchange prior to (X) the date which is two years
(or such shorter period as may be prescribed by Rule 144(k)
(or any successor provision thereto)) after the later of the
date of original issuance of the Warrants and the last date on
which the Company or any affiliate of the Company was the
owner of such Warrants, or any predecessor thereto, and (Y)
such later date, if any, as may be required by any subsequent
change in applicable law (the "Resale Restriction Termination
Date"), such Warrants shall be accompanied by the following
additional information and documents, as applicable:
(A) If such Warrants are being delivered to the Warrant
Agent by a holder for registration in the name of
such holder, without transfer, a certification from
such holder to that effect (in substantially the
form of Exhibit C hereto); or
(B) if such Warrants are being transferred to a qualified
institutional buyer (as defined in Rule 144A under
the Securities Act) (a "QIB") in accordance with Rule
144A under the Securities Act, a certification from
the transferor to that effect (in substantially the
form of Exhibit C hereto); or
(C) if such Warrants are being transferred to an
institutional "accredited investor" within the
meaning of subparagraphs (a)(1), (a)(2), (a)(3) or
(a)(7) of Rule 501 under the Securities Act (an
"Institutional Accredited Investor"), delivery by the
transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and
delivery by the proposed transferee of a Transferee
Certificate for Institutional Accredited Investors
(in substantially the form of Exhibit D hereto); or
(D) if such Warrants are being transferred in reliance on
Regulation S under the Securities Act, delivery by
the transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and a
Certificate for Regulation S Transfers in the form of
Exhibit E hereto; or
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(E) if such Warrants are being transferred in reliance on
Rule 144 under the Securities Act, delivery by the
transferor of (i) a certification from the transferor
to that effect (in substantially the form of Exhibit
C hereto), and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Warrants are being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification from the
transferor to that effect (in substantially the form
of Exhibit C hereto) and an opinion of counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; provided that the Company may, based
upon the views of its own counsel, instruct the
Warrant Agent not to register such transfer in any
case where the proposed transferee is not a QIB,
Non-U.S. Person or Institutional Accredited Investor.
(b) Restrictions on Transfer of a Definitive Warrant for a
Beneficial Interest in a Global Warrant. A Definitive Warrant may not be
transferred by a holder for a beneficial interest in a Global Warrant except
upon satisfaction of the requirements set forth below. Upon receipt by the
Warrant Agent of a Definitive Warrant, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Warrant Agent,
together with:
(A) certification from such holder (in substantially the
form of Exhibit C hereto) that such Definitive
Warrant is being transferred to (I) a QIB in
accordance with Rule 144A under the Securities Act,
(II) to an Institutional Accredited Investor or (III)
in an offshore transaction in reliance on Regulation
S and, with respect to (II) or (III), at the option
of the Company or the Warrant Agent, an Opinion of
Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the
Securities Act; and
(B) written instructions directing the Warrant Agent to
make, or to direct the Depository to make, an
endorsement on the applicable Global Warrant to
reflect an increase in the aggregate amount of the
Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depository to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Warrant Agent, the number of
Shares represented by the applicable Global Warrant to be increased accordingly.
If no ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or Regulation S
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Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall upon written instructions from the Company authenticate a new Global
Warrant in the appropriate amount.
(c) Transfer or Exchange of Global Warrants. The transfer or
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depository, in accordance with this Section 1.08, the Private
Placement Legend, this Agreement (including the restrictions on transfer set
forth herein) and the procedures of the Depository therefor. Upon receipt by the
Registrar or Co-Registrar of written instructions, or such other instruction as
is customary for the Depository, from the Depository or its nominee, requesting
the registration of transfer of an interest in a ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a
Regulation S Global Warrant, as the case may be, to another type of Global
Warrant, together with the applicable Global Warrants (or, if the applicable
type of Global Warrant required to represent the interest as requested to be
obtained is not then outstanding, only the Global Warrant representing the
interest being transferred), the Registrar or Co-Registrar shall reflect on its
books and records (and the applicable Global Warrant) the applicable increase
and decrease of the principal amount of Warrants represented by such types of
Global Warrants, giving effect to such transfer. If the applicable type of
Global Warrant required to represent the interest as requested to be obtained is
not outstanding at the time of such request, the Company shall issue and the
Warrant Agent shall, upon written instructions from the Company in accordance
with Section 1.08, authenticate a new Global Warrant of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer or Exchange of a Beneficial Interest in a Global
Warrant for a Definitive Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may transfer or exchange such beneficial interest for a
Definitive Warrant; provided, however, that prior to the
Registration, a transferee that is a QIB or Institutional
Accredited Investor may not exchange a beneficial interest
in a Global Warrant for a Definitive Warrant until receipt
by the Warrant Agent of written 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 a Global Warrant, including
a written order containing registration instructions and,
in the case of any such transfer or exchange of a
beneficial interest in Warrants the offer and sale of which
have not been registered under the Securities Act, the
following additional information and documents:
(A) if such beneficial interest is being transferred to
the person designated by the Depository as being the
beneficial owner, a certification from such person
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to that effect (in substantially the form of Exhibit
C hereto); or
(B) if such beneficial interest is being transferred in
reliance on Regulation S under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially the form of Exhibit C
hereto), and (ii) a Certificate for Regulation S
Transfers in the form of Exhibit E hereto; or
(C) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially the form of Exhibit C
hereto) and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
from the transferor to that effect (in substantially
the form of Exhibit C hereto) and an opinion of
counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the
Securities Act; provided that the Company may instruct
the Warrant Agent not to register such transfer in any
case where the proposed transferee is not a QIB,
Non-U.S. Person or Institutional Accredited Investor.
then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depository and the Warrant Agent, the aggregate amount of the
Global Warrant to be reduced and, following such reduction,
the Company will execute and, upon receipt of an
authentication order in the form of an officers' certificate
(a certificate signed by two officers of the Company, one of
whom must be the principal executive officer, principal
financial officer or principal accounting officer) (an
"Officers' Certificate"), the Warrant Agent will authenticate
and deliver to the transferee a Definitive Warrant. The
Warrant Agent shall not be deemed to have knowledge of any
registration under the Securities Act unless it receives an
Officers' Certificate specifying such registration.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 1.08(d)
shall be registered in such names and in such authorized
denominations as the Depository, shall instruct the Warrant
Agent in writing. The Warrant Agent shall deliver such
Definitive Warrants
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to the persons in whose names such Warrants are so registered
and adjust the Global Warrant pursuant to paragraph (h) of
this Section 1.08.
(e) Restrictions on Transfer or Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred or exchanged 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.
(f) Authentication of Definitive Warrants in Absence of
Depository. If at any time:
(i) the Depository for the Global Warrants notifies the Company
and the Warrant Agent that the Depository is unwilling or
unable to continue as Depository for the Global Warrants and a
successor Depository for the Global Warrants is not appointed
by the Company within 90 days after delivery of such notice;
or
(ii) The Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants for all Global Warrants under this
Agreement,
then the Company will execute, and the Warrant Agent will, upon receipt of an
Officers' Certificate requesting the authentication and delivery of Definitive
Warrants, authenticate and deliver Definitive Warrants, in an aggregate number
equal to the aggregate number of warrants represented by the Global Warrant, in
exchange for such Global Warrant.
(g) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Warrant Certificates not bearing the legend
set forth in the first paragraph of Exhibit A attached hereto (the "Private
Placement Legend"), the Warrant Agent shall deliver Warrant Certificates that do
not bear the Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Warrant Certificates bearing the Private Placement
Legend, the Warrant Agent shall deliver Warrant Certificates that bear the
Private Placement Legend unless, and the Warrant Agent is hereby authorized to
deliver Warrant Certificates without the Private Placement Legend if, (i) the
requested transfer is not prior to the date which is two years (or such shorter
period as may be prescribed by Rule 144(k) (or any successor provision thereto)
under the Securities Act or any successor provision thereunder) after the later
of the original Issue Date of the Warrants or the last day on which the Company
or any of its Affiliates was the owner of the Warrant or any predecessor
security, (ii) there is delivered to the Warrant Agent an opinion of counsel
reasonably satisfactory to the Company and the Warrant Agent to the effect that
neither such legend nor the related restrictions on
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transfer are required in order to maintain compliance with the provisions of the
Securities Act or (iii) the Warrants to be transferred or exchanged represented
by such Warrant Certificates are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act.
(h) Cancellation or Adjustment of a Global Warrant. At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to the Company or, upon written order to the Warrant Agent in
the form of an Officers' Certificate from the Company, retained and cancelled by
the Warrant Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for Definitive Warrants, redeemed,
repurchased or cancelled, the number of Warrants represented by such Global
Warrant shall be reduced and an endorsement shall be made on such Global Warrant
by the Warrant Agent to reflect such reduction.
(i) Obligations with Respect to Transfers or Exchanges of
Definitive Warrants.
(i) To permit registrations of transfers or exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant
Agent shall authenticate Definitive Warrants and Global
Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement as
the Definitive Warrants or Global Warrants surrendered upon
the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat
the person in whose name any Warrant is registered as the
absolute owner of such Warrant, and neither the Warrant Agent
nor the Company shall be affected by notice to the contrary.
"Depository" means, with respect to the Warrants issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates. Upon receipt by the Company and the Warrant Agent (or any
agent of the Company or the Warrant Agent, if requested by the Company) of
evidence satisfactory to them of
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the loss, theft, destruction, defacement, or mutilation of any Warrant
Certificate and of an indemnity bond satisfactory to them and, in the case of
mutilation or defacement, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser or
holder in due course, the Company shall execute, and an authorized signatory of
the Warrant Agent shall manually authenticate and deliver, in exchange for or in
lieu of the lost, stolen, destroyed, defaced or mutilated Warrant Certificate, a
new Warrant Certificate representing a like number of Warrants, bearing a number
or other distinguishing symbol not contemporaneously outstanding. The Company or
the Warrant Agent may require an indemnity bond that is sufficient in the
judgment of the Company and the Warrant Agent to protect the Company and the
Warrant Agent from any loss which any of them may suffer if a Warrant
Certificate is replaced. Upon the issuance of any new Warrant Certificate under
this Section in a name other than the prior registered holder of the lost,
stolen, destroyed, defaced or mutilated Warrant Certificate, the Company may
require the payment from the holder of such Warrant Certificate of a sum
sufficient to cover any tax, stamp tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent and the Registrar) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this Section
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of (but shall be subject to all
the limitations of rights set forth in) this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 1.09 are exclusive with
respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates and shall preclude (to the extent lawful) any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates.
The Warrant Agent is hereby authorized to authenticate in
accordance with the provisions of this Agreement, and deliver the new Warrant
Certificates required pursuant to the provisions of this Section.
SECTION 1.10. Offices for Exercise, etc. So long as any of the
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where the
Warrant Certificates may be presented for exercise, (b) an office or agency
where the Warrant Certificates may be presented for registration of transfer and
for exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 1.05 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or
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rescind such designation, as it may deem desirable or expedient; provided,
however, that an office or agency shall at all times be maintained in the
Borough of Manhattan, The City of New York, as provided in the first sentence of
this Section. In addition to such office or offices or agency or agencies, the
Company may from time to time designate and maintain one or more additional
offices or agencies within or outside The City of New York, where Warrant
Certificates may be presented for exercise or for registration of transfer or
for exchange, and the Company may from time to time change or rescind such
designation, as it may deem desirable or expedient. The Company will give to the
Warrant Agent written notice of the location of any such office or agency and of
any change of location thereof. The Company hereby designates the Warrant Agent
at its corporate trust office identified at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Warrant Agent Office"), as the initial agency maintained for
each such purpose. In case the Company shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notice may be served
at the Warrant Agent Office and the Company appoints the Warrant Agent as its
agent to receive all such presentations, surrenders, notices and demands.
SECTION 1.11. Book-Entry Provisions for Global Warrants. (a)
The Global Warrants initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Warrant
Agent as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Warrant Agreement with respect
to any Global Warrant held on their behalf by the Depository, or the Warrant
Agent as its custodian, or under the Global Warrant, and the Depository may be
treated by the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent as the absolute owner of the Global Warrant for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the Warrant Agent from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and
Participants, the operation of customary practices governing the exercise of the
rights of a beneficial owner in a Global Warrant.
(b) Transfers of Global Warrants shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Warrants may be
transferred or exchanged for Definitive Warrants in accordance with the rules
and procedures of the Depository and the provisions of Section 1.08; provided,
however, that Definitive Warrants shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Warrants if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Warrant and a successor Depository is not appointed by
the Company within 90 days of such notice,
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(ii) the Company, at its option, notifies the Warrant Agent in writing that it
elects to cause the issuance of the Warrants as Definitive Warrants or (iii) an
Event of Default has occurred and is continuing and the Registrar has received a
request from the Depository to issue Definitive Warrants.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in a Global Warrant to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Definitive Warrants are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Warrant in an amount equal to the principal
amount of the beneficial interest in the Global Warrant to be transferred, and
the Company shall execute, and the Warrant Agent shall authenticate and deliver,
one or more Definitive Warrants of like tenor and amount.
(d) In connection with the transfer of Global Warrants as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 1.11,
the Global Warrants shall be deemed to be surrendered to the Warrant Agent for
cancellation, and the Company shall execute, and the Warrant Agent shall upon
written instructions from the Company authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Warrants, an equal aggregate principal amount of
Definitive Warrants of authorized denominations.
(e) Any Definitive Warrants constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 1.11 shall, except as otherwise provided by Section 1.08,
bear the Private Placement Legend.
(f) The Holder of any Global Warrant may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Warrant Agreement or the Warrants and the Warrant Agent is
entitled to rely upon any electronic instructions from beneficial owners to the
Holder of any Global Warrant.
ARTICLE II
DURATION, EXERCISE OF WARRANTS; EXERCISE PRICE
AND REPURCHASE OF WARRANTS
SECTION 2.01. Duration of Warrants. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., New York
City time, on February 1, 2007. The applicable date of expiration of a
particular Warrant is referred to herein as the "Expiration Date" of such
Warrant. Each Warrant may be exercised on any
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Business Day (as defined below) on or after the Exercisability Date (as defined
in Section 2.02) and on or prior to the close of business on the Expiration
Date.
Any Warrant not exercised before the close of business on the
Expiration Date shall become void, and all rights of the holder under the
Warrant Certificate evidencing such Warrant and under this Agreement shall
cease.
"Business Day" shall mean any day on which (i) banks in New
York City, (ii) the principal U.S. securities exchange or market, if any, on
which any Common Stock is listed or admitted to trading and (iii) the principal
U.S. securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
SECTION 2.02. Exercise, Exercise Price, Settlement and
Delivery. (a) Subject to the provisions of this Agreement, a holder of a Warrant
shall have the right to purchase from the Company on or after the Exercisability
Date and on or prior to the close of business on the Expiration Date the number
of fully paid, registered and non-assessable shares of Common Stock specified in
Section 1.01, subject to adjustment in accordance with Article V hereof, at the
purchase price of $0.01 for each share purchased (the "Exercise Price"). The
number of Shares for which a particular Warrant may be exercised (the "Exercise
Rate") shall be subject to adjustment from time to time as set forth in Article
V hereof.
"Exercisability Date" means, with respect to each Warrant, the
date as of which an Exercise Event shall have occurred.
"Exercise Event" means, with respect to each Warrant, the date
of the occurrence of the earliest of: (1) an Initial Public Equity Offering, (2)
a class of equity securities of the Company is listed on a United States
national securities exchange or authorized for quotation on the Nasdaq National
Market or is otherwise subject to registration under the Exchange Act or (3) the
Separability Date. The Company will promptly notify the Warrant Agent of an
Exercise Event.
"Initial Public Equity Offering" means a primary public
offering (whether or not underwritten, but excluding any offering pursuant to
Form S-4 or Form S-8 under the Securities Act or any other publicly registered
offering pursuant to the Securities Act pertaining to an issuance of shares of
capital stock of the Company or securities exercisable therefor under any
benefit plan, employee compensation plan, or employee or director stock purchase
plan) of common stock of the Company pursuant to an effective registration
statement under the Securities Act in which the Company receives aggregate gross
proceeds of at least $75 million.
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"Registrable Securities" means any of (i) the Common Stock
issued and issuable upon exercise of the Warrants and (ii) any other securities
issued or issuable with respect to the Warrants or Shares by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, reorganization or otherwise. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the offering of
such securities by the holder thereof shall have been declared effective under
the Securities Act and such securities shall have been disposed of by such
holder pursuant to such registration statement, (b) such securities have been
sold to the public pursuant to, or are eligible for sale to the public without
volume or manner of sale restrictions under, Rule 144(k) (or any similar
provision then in force, but not Rule 144A) promulgated under the Securities
Act, (c) such securities shall have been otherwise transferred and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(d) such securities shall have ceased to be outstanding.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity, including any predecessor of any such
entity.
(b) Warrants may be exercised on or after the date they are
exercisable hereunder by (i) surrendering at any office or agency maintained for
that purpose by the Company pursuant to Section 1.10 (each a "Warrant Exercise
Office") the Warrant Certificate evidencing such Warrants with the form of
election to exercise Shares set forth on the reverse side of the Warrant
Certificate (the "Election to Exercise") duly completed and signed by the
registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, and in the case of a
transfer, such signature shall be guaranteed by an eligible guarantor
institution, and (ii) paying in full the Exercise Price for each such Warrant
exercised. Each Warrant may be exercised only in whole. No exercise of Warrants
may be effected which does not call for the issuance of a number of shares of
Common Stock in direct proportion (subject only to rounding with respect to
fractional shares) to the aggregate number of shares of Common Stock then
issuable upon exercise of the Warrants evidenced by the relevant Warrant
Certificate.
(c) Simultaneously with the exercise of each Warrant, payment
in full of the aggregate Exercise Price may be made, at the option of the
holder, (i) by wire transfer or by certified check, (ii) by the surrender (which
surrender shall be evidenced by cancellation of the number of Warrants
represented by any Warrant Certificate presented in connection with a Cashless
Exercise) of a Warrant or Warrants (represented by one or more Warrant
Certifi-
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▇▇▇▇▇), and without payment of the Exercise Price in cash, for such number of
Shares equal to the product of (1) the number of Shares for which such
Warrant is exercisable with payment in cash of the aggregate Exercise Price
as of the date of exercise and (2) the applicable Cashless Exercise Ratio or
(iii) with any combination of (i) and (ii). For purposes of this Agreement,
the "Cashless Exercise Ratio" shall equal a fraction, the numerator of which
is the excess of the Current Market Value per share of the Class A Common
Stock or Class H Common Stock, as applicable, on the date of exercise over
the Exercise Price per share as of the date of exercise and the denominator
of which is the Current Market Value per share of the Class A Common Stock or
Class H Common Stock, as applicable, on the date of exercise. An exercise of
a Warrant in accordance with the immediately preceding sentences is herein
called a "Cashless Exercise." Upon surrender of a Warrant Certificate
representing more than one Warrant in connection with the holder's option to
elect a Cashless Exercise, the number of Shares deliverable upon a Cashless
Exercise shall be equal to the Cashless Exercise Ratio multiplied by the
product of (a) the number of Warrants that the holder specifies is to be
exercised pursuant to a Cashless Exercise and (b) the number of Shares for
which such Warrant is then exercisable (without giving effect to the Cashless
Exercise option). All provisions of this Agreement shall be applicable with
respect to an exercise of a Warrant Certificate pursuant to a Cashless
Exercise for less than the full number of Warrants represented thereby. No
payment or adjustment shall be made on account of any dividends on the Shares
issued upon exercise of a Warrant. If the Company has not effected the
registration under the Securities Act of the offer and sale of the Shares by
the Company to the holders of the Warrants upon the exercise thereof, the
Company may elect to require that holders of the Warrants effect the exercise
of the Warrants solely pursuant to the Cashless Exercise option and may also
amend the Warrants to eliminate the requirement for payment of the Exercise
Price with respect such Cashless Exercise option. The Warrant Agent shall
have no obligation under this section to calculate the Cashless Exercise
Ratio. The Company shall calculate the Exercise Price and the Cashless
Exercise Ratio whenever such calculation is necessary and shall deliver an
Officers' Certificate to the Warrant Agent specifying such numbers.
(d) Upon such surrender of a Warrant Certificate and payment
and collection of the Exercise Price at any Warrant Exercise Office (other than
any Warrant Exercise Office that also is an office of the Warrant Agent), such
Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "Exercise Date" for a Warrant shall be the date when all of the items
referred to in the first sentence of paragraphs (b) and (c) of this Section 2.02
are received by the Warrant Agent at or prior to 11:00 a.m., New York City time,
on a Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in the first sentence of paragraphs (b)
and (c) are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be effective on the
next succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on the Expiration Date, if all of the items
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referred to in the first sentence of paragraphs (b) and (c) are received by the
Warrant Agent at or prior to 5:00 p.m., New York City time, on the Expiration
Date, the exercise of the Warrants to which such items relate will be effective
on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the
terms hereof, the receipt of a Warrant Certificate and payment of the Exercise
Price (or election of the Cashless Exercise option), the Warrant Agent shall:
(i) except to the extent exercise of the Warrant has been effected through
Cashless Exercise, cause an amount equal to the aggregate Exercise Price to be
paid to the Company by crediting the same to the account designated by the
Company in writing to the Warrant Agent for that purpose; (ii) advise the
Company immediately by telephone of the amount so deposited to the Company's
account and promptly confirm such telephonic advice in writing; and (iii) as
soon as practicable, advise the Company in writing of the number of Warrants
exercised in accordance with the terms and conditions of this Agreement and the
Warrant Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable
after the exercise of any Warrant or Warrants in accordance with the terms
hereof, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of the Warrant Certificate evidencing such
exercised Warrant or Warrants, a certificate or certificates evidencing the
Shares to which such holder is entitled, in fully registered form, registered in
such name or names as may be directed by such holder pursuant to the Election to
Exercise, as set forth on the reverse of the Warrant Certificate. Such
certificate or certificates evidencing the Shares shall be deemed to have been
issued and any persons who are designated to be named therein shall be deemed to
have become the holder of record of such Shares as of the close of business on
the Exercise Date; the Shares may initially be issued in global form (the
"Global Shares"). Such Global Shares shall represent such of the outstanding
Shares as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Shares from time to time endorsed
thereon and that the aggregate amount of outstanding Shares represented thereby
may from time to time be reduced or increased, as appropriate. Any endorsement
of a Global Share to reflect the amount of any increase or decrease in the
amount of outstanding Shares represented thereby shall be made by the registrar
for the Shares and the Depository (referred to below) in accordance with
instructions given by the holder thereof. The Depository Trust Company shall (if
possible) act as the Depository with respect to the Global Shares until a
successor shall be appointed by the Company and the registrar for the Shares.
After such exercise of any Warrant or Shares, the Company shall also issue or
cause to be issued to or upon the written order of the registered holder of such
Warrant Certificate, a new Warrant Certificate, countersigned by the Warrant
Agent pursuant to written instruction, evidencing the number of Warrants, if
any, remaining unexercised unless such Warrants shall have expired.
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SECTION 2.03. 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 at the Company's written instruction be
canceled by it and retired. The Warrant Agent shall cancel all Warrant
Certificates properly surrendered for exchange, substitution, transfer or
exercise in accordance with its customary procedures.
SECTION 2.04. Notice of an Exercise Event. The Company shall,
as soon as practicable after the occurrence of an Exercise Event, send or cause
to be sent to each holder of Warrants, by first-class mail, at the addresses
appearing on the Warrant Register, a notice prepared by the Company advising
such holder of the Exercise Event which has occurred, which notice shall
describe the type of Exercise Event and the date of the occurrence thereof, as
applicable, and the date of expiration of the right to exercise the Warrants
prominently set forth in the face of such notice. The Company agrees to make
available the foregoing right notwithstanding any other provision herein to the
contrary.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any
of the provisions of this Agreement, any holder of any Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Shares or the holder
of any other Warrant Certificate, may, in and for his own behalf, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall
entitle the holders thereof to any of the rights of a holder of Shares,
including, without limitation, the right to vote or to receive any dividends or
other payments or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company,
except as expressly provided herein (including Section 5.03 hereof).
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ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrants and of
the Shares upon the exercise of Warrants; provided, however, that the Company
shall not be required to pay any tax or other governmental charge which may be
payable in respect of any transfer or exchange of any Warrant Certificates or
any certificates for Shares in a name other than the registered holder of a
Warrant Certificate surrendered upon the exercise of a Warrant. In any such
case, no transfer or exchange shall be made unless or until the person or
persons requesting issuance thereof shall have paid to the Company the amount of
such tax or other governmental charge or shall have established to the
satisfaction of the Company that such tax or other governmental charge has been
paid or an exemption is available therefrom.
SECTION 4.02. Rules 144 and 144A. The Company covenants that
it will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
holder or beneficial owner of Warrants, make available such information
necessary to permit sales pursuant to Rule 144A under the Securities Act.
SECTION 4.03. Form of Initial Public Equity Offering. The
Company agrees that it will not make an Initial Public Equity Offering of any
class of its Capital Stock (other than the class to which the Shares belong)
without amending the terms of the Company's certificate of incorporation to
provide that the Class A Common Stock is convertible into the class of Capital
Stock subject to the Initial Public Equity Offering (the "Subject Class") on a
share-for-share basis and that the rights, conditions and privileges of the
Subject Class shall not be adverse to the holders of the Class A Common Stock.
SECTION 4.04. Registration of Shares. The Company agrees that
it will comply with all applicable laws, including the Securities Act and any
applicable state securities laws, in connection with any offer and sale of
Common Stock (and other securities and property deliverable) upon exercise of
the Warrants.
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ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices. The
Exercise Rate is subject to adjustment from time to time as provided in this
Section.
(a) Adjustment for Change in Capital Stock. If, after the
date hereof, the Company:
(i) subdivides any of its outstanding shares of Common
Stock into a greater number of shares;
(ii) combines any of its outstanding shares of Common Stock
into a smaller number of shares;
(iii) pays a dividend or makes a distribution on any of its
Common Stock in shares of any of its Capital Stock (as defined below)
(other than Common Stock or rights, warrants or options for its Common
Stock to the extent such issuance or distribution is covered by Section
5.03); or
(iv) issues by reclassification of any of its Common Stock
any shares of any of its Capital Stock;
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted so that the holder of a Warrant
thereafter exercised may receive the number of shares of Capital Stock of the
Company which such holder would have owned immediately following such action if
such holder had exercised the Warrant immediately prior to such action or
immediately prior to the record date applicable thereto, if any (regardless of
whether the Warrants then outstanding are then exercisable and without giving
effect to the Cashless Exercise option). If there are no outstanding shares of
Common Stock that are of the same class as the Shares at the time of any such
action and such action has therefore been taken only in respect of the Shares,
the adjustment shall relate to the Shares in their same form if it would not
frustrate the intent and purposes of this Section 5.01.
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. In
the event that such dividend or distribution is not so paid or made or such
subdivision, combination or reclassification is not effected, the Exercise Rate
shall again be adjusted to be the Exercise Rate which would then be in effect if
such record date or effective date had not been so fixed.
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If after an adjustment a holder of a Warrant upon exercise of
such Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article V with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article V.
(b) Adjustment for Sale of Common Stock Below Current Market
Value. If, after the date hereof, the Company grants or sells to any Affiliate
of the Company (other than a wholly-owned subsidiary) any Common Stock or any
securities convertible into or exchangeable or exercisable for any Common Stock
at a price below the then Current Market Value (other than (1) pursuant to the
exercise of the Warrants, (2) pursuant to any security convertible into, or
exchangeable or exercisable for shares of Common Stock outstanding as of the
date of this Agreement, (3) upon the conversion, exchange or exercise of any
convertible, exchangeable or exercisable security as to which upon the issuance
thereof an adjustment pursuant to this Article V has been made and (4) upon the
conversion, exchange or exercise of convertible, exchangeable or exercisable
securities of the Company outstanding on the date of this Agreement (to the
extent in accordance with the terms of such securities as in effect on the date
of this Agreement), the Exercise Rate for each Warrant then outstanding shall be
adjusted in accordance with the formula:
E' = E x (O + N)
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate for such class of Common Stock;
E = the then current Exercise Rate for such class of Common Stock;
O = the number of shares of such class of Common Stock
outstanding on a fully diluted basis immediately prior to the
sale of Common Stock or issuance of securities convertible,
exchangeable or exercisable for Common Stock;
N = the number of shares of such class of Common Stock so sold
or the maximum stated number of shares of Common Stock
issuable upon the conversion, exchange or exercise of any such
convertible, exchangeable or exercisable securities, as the
case may be;
P = the proceeds per share of Common Stock received by the
Company, which (i) in the case of shares of Common Stock is
the amount received by the Company in consideration for the
sale and issuance of such shares; and (ii) in the case of
securities convertible into or exchangeable or exercisable for
shares of
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Common Stock is the amount received by the Company in
consideration for the sale and issuance of such convertible or
exchangeable or exercisable securities, plus the minimum
aggregate amount of additional consideration, other than the
surrender of such convertible or exchangeable securities,
payable to the Company upon exercise, conversion or exchange
thereof; and
M = the Current Market Value as of the Time of Determination or at
the time of sale, as the case may be.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, warrants or options to which this paragraph (b) applies or upon
consummation of the sale of Common Stock, as the case may be. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Exercise Rate for each Warrant then outstanding shall be
readjusted to the Exercise Rate which would otherwise be in effect had the
adjustment made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Exercise Rate for each Warrant then outstanding shall again be adjusted to be
the Exercise Rate which would then be in effect if such date fixed for
determination of stockholders entitled to receive such rights or warrants had
not been so fixed.
No adjustment shall be made under this paragraph (b) if the
application of the formula stated above in this paragraph (b) would result in a
value of E' that is lower than the value of E.
No adjustment in the Exercise Rate shall be made under this
paragraph (b) upon the conversion, exchange or exercise of options to acquire
shares of Common Stock by officers, directors, employees or consultants of the
Company; provided that the exercise price of such options, at the time of
issuance thereof, is at least equal to the then Current Market Value of the
Common Stock underlying such options.
"Affiliate" of any specified Person means any other Person
which, directly or indirectly, controls, is controlled by or is under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") when used with
respect to any 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.
(c) Notice of Adjustment. Whenever the Exercise Rate is
adjusted, the Company shall promptly mail to holders of Warrants then
outstanding at the addresses appearing
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on the Warrant Register a notice of the adjustment. The Company shall file with
the Warrant Agent and any other Registrar such notice and a certificate from the
Company's independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Warrant Agent nor any such
Registrar shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same during normal business hours to any
holder desiring inspection thereof.
(d) Reorganization of Company; Special Distributions. (i) If
the Company, in a single transaction or through a series of related
transactions, merges, consolidates or amalgamates with or into any other person
or sells, assigns, transfers, leases, conveys or otherwise disposes of all or
substantially all of its properties and assets to another person or group of
affiliated persons or is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock (a "Fundamental
Transaction"), as a condition to consummating any such transaction the person
formed by or surviving any such consolidation or merger if other than the
Company or the person to whom such transfer has been made (the "Surviving
Person") shall enter into a supplemental warrant agreement. The supplemental
warrant agreement shall provide that the holder of a Warrant then outstanding
may exercise it for the kind and amount of securities, cash or other assets
which such holder would have received immediately after the Fundamental
Transaction if such holder had exercised the Warrant immediately before the
effective date of the transaction (regardless of whether the Warrants are then
exercisable and without giving effect to the Cashless Exercise option), assuming
(to the extent applicable) that such holder (i) was not a constituent person or
an affiliate of a constituent person to such transaction, (ii) made no election
with respect thereto, and (iii) was treated alike with the plurality of
non-electing holders.
(ii) Notwithstanding the foregoing, if the Company enters into
a Fundamental Transaction with another Person (other than a subsidiary of the
Company) and consideration is payable to holders of shares of Capital Stock (or
other securities or property) issuable or deliverable upon exercise of the
Warrants that are exercisable in exchange for their shares in connection with
such Fundamental Transaction which consists solely of cash, then the holders of
Warrants shall be entitled to receive distributions on the date of such event on
an equal basis with holders of such shares (or other securities issuable upon
exercise of the Warrants) as if the Warrants had been exercised immediately
prior to such event, less the Exercise Price therefor. Upon receipt of such
payment, if any, the rights of a holder of such a Warrant shall terminate and
cease and such holder's Warrants shall expire.
(iii) If this paragraph (d) applies, it shall supersede the
application of paragraph (a) of this Section 5.01.
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(e) Company Determination Final. Any determination that the
Company or the Board of Directors of the Company must make pursuant to this
Article V is conclusive.
(f) Warrant Agent's Adjustment Disclaimer. The Warrant Agent
has no duty to determine when an adjustment under this Article V should be made,
how it should be made or what it should be. The Warrant Agent has no duty to
determine whether a supplemental warrant agreement under paragraph (f) need be
entered into or whether any provisions of any supplemental warrant agreement are
correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Article V.
(g) Adjustment for Tax Purposes. The Company may make such
increases in the Exercise Rate, in addition to those otherwise required by this
Section, as it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(h) Underlying Shares. The Company shall at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock or Common Stock held in the treasury of the Company, for
the purpose of effecting the exercise of Warrants, the full number of Shares
then deliverable upon the exercise of all Warrants then outstanding and payment
of the exercise price, and the shares so deliverable shall be fully paid and
nonassessable and free from all liens and security interests.
(i) Specificity of Adjustment. Irrespective of any adjustments
in the number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or thereafter issued may continue to express
the same number and kind of Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(j) Voluntary Adjustment. The Company from time to time may
increase the Exercise Rate by any number and for any period of time (provided
that such period is not less than 20 Business Days). Whenever the Exercise Rate
is so increased, the Company shall mail to holders at the addresses appearing on
the Warrant Register and file with the Warrant Agent a notice of the increase.
The Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
does not change or adjust the Exercise Rate otherwise in effect as determined by
this Section 5.01.
(k) Multiple Adjustments. After an adjustment to the Exercise
Rate for outstanding Warrants under this Article V, any subsequent event
requiring an adjustment under
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this Article V shall cause an adjustment to the Exercise Rate for outstanding
Warrants as so adjusted.
(l) Definitions.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such person's capital stock,
whether outstanding on the Issue Date (as defined in the Indenture) or issued
after the Issue Date, and any and all rights, warrants or options exchangeable
for or convertible into such capital stock.
"Current Market Value" per share of Common Stock of the
Company or any other security at any date means (i) if the security is not
registered under the Exchange Act, the fair market value of the security,
determined in good faith by the Board of Directors of the Company if the
aggregate amount of such security to be issued is less than or equal to $50.0
million, or if the aggregate amount of such security exceeds $50.0 million, as
determined by an Independent Financial Expert (provided that, in the case of the
calculation of Current Market Value for determining the cash value of fractional
shares, any such determination within six months that is, in the good faith
judgment of the Board, a reasonable determination of value, may be utilized) or
(ii) (a) if the security is registered under the Exchange Act, the average of
the daily closing sales prices of the securities for the 20 consecutive days
immediately preceding such date, or (b) if the security has been registered
under the Exchange Act for less than 20 consecutive days immediately preceding
such date, then the offering price of the security in the transaction causing
registration under the Exchange Act, in the case of each of (ii)(a) and (ii)(b),
as certified to the Warrant Agent by the President, any Vice President or the
Chief Financial Officer of the Company. The closing sales price for each such
trading day shall be: (A) in the case of a security listed or admitted to
trading on any United States national securities exchange or quotation system,
the closing sales price, regular way, on such day, or if no sale takes place on
such day, the average of the closing bid and asked prices on such day, (B) in
the case of a security not then listed or admitted to trading on any United
States national securities exchange or quotation system, the last reported sale
price on such day, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, as reported by a reputable quotation
source designated by the Company, (C) in the case of a security not then listed
or admitted to trading on any United States national securities exchange or
quotation system and as to which no such reported sale price or bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York
customarily published on each Business Day, designated by the Company, or, if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than 30
days prior to the date in question) for which prices have been so reported and
(D) if
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there are not bid and asked prices reported during the 30 days prior to the date
in question, the Current Market Value shall be determined as if the Shares (or
other securities) were not registered under the Exchange Act.
"Independent Financial Expert" means a United States
investment banking firm of national or regional standing in the United States
(i) which does not, and whose directors, officers and employees or Affiliates do
not have a direct or indirect material financial interest for its proprietary
account in the Company or any of its Affiliates and (ii) which, in the judgment
of the Board of Directors of the Company, is otherwise independent with respect
to the Company and its Affiliates and qualified to perform the task for which it
is to be engaged.
"Time of Determination" means, (i) in the case of any
distribution of securities or other property to existing stockholders to which
paragraph (b) applies, the time and date of the determination of stockholders
entitled to receive such securities or property or (ii) in the case of any other
issuance and sale to which paragraph (b) applies, the time and date of such
issuance or sale.
(m) When De Minimis Adjustment may be Deferred. No adjustment
in the Exercise Rate need be made unless the adjustment would require an
increase of at least 1% in the Exercise Rate. Any adjustments that are not made
shall be carried forward and taken into account in any subsequent adjustments.
All calculations under this Section 5 shall be made to the nearest 1/1000th of a
share, as the case may be.
SECTION 5.02. Fractional Shares. The Company will not be
required to issue fractional Shares upon exercise of the Warrants or distribute
Share certificates that evidence fractional Shares. In the event a holder is
required by Section 2.02(c) to make a Cashless Exercise, and the Company
determines not to issue fractional Shares, the number of Shares issuable shall
be rounded up to the nearest whole number. In addition, in no event shall any
holder of Warrants be required to make any payment of a fractional cent. In lieu
of fractional Shares, the Company may pay to the registered holders of Warrant
Certificates at the time Warrants evidenced thereby are exercised as herein
provided an amount in cash equal to the same fraction of the Current Market
Value, per Share on the Business Day preceding the date the Warrant Certificates
evidencing such Warrants are surrendered for exercise. Such payments will be
made by check or by transfer to an account maintained by such registered holder
with a bank in The City of New York. If any holder surrenders for exercise more
than one Warrant Certificate, the number of Shares deliverable to such holder
may, at the option of the Company, be computed on the basis of the aggregate
amount of all the Warrants exercised by such holder.
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SECTION 5.03. Certain Distributions. If at any time the
Company grants, issues or sells options, convertible securities, or rights to
purchase Capital Stock, warrants or other securities pro rata to the record
holders of any Common Stock (the "Distribution Rights") or, without duplication,
makes any dividend or otherwise makes any distribution, including, subject to
applicable law, pursuant to any plan of liquidation but excluding dividends and
distributions permitted by clauses (7), (8), (9), (10) and (11) of the third
paragraph of Section 4.11 of the Indenture, but, in the case of (10), only to
the extent such payments are not paid as dividends or distributions to Heat
Holding Corp.'s equity holders ("Distribution") on Common Stock (whether in
cash, property, evidences of indebtedness or otherwise), then the Company shall
grant, issue, sell or make to each registered holder of Warrants then
outstanding, the aggregate Distribution Rights or Distribution, as the case may
be, which such holder would have acquired if such holder had held the maximum
number of Shares acquirable upon complete exercise of such holder's Warrants
(regardless of whether the Warrants are then exercisable and without giving
effect to the Cashless Exercise option) immediately before the record date for
the grant, issuance or sale of such Distribution Rights or Distribution, as the
case may be, or, if there is no such record date, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Distribution Rights or Distribution, as the case may be.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company hereby appoints
Bankers Trust Company as Warrant Agent of the Company in respect of the Warrants
and the Warrant Certificates upon the terms and subject to the conditions herein
and in the Warrant Certificates set forth; and Bankers Trust Company hereby
accepts such appointment. The Warrant Agent shall have the powers and authority
specifically 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 and it shall accept in
writing. 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. The Warrant Agent may act through agents and
shall not be responsible for the misconduct or negligence of any such agent
appointed with due care.
SECTION 6.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof and in the Warrant Certificates, including the following, to
all of which the Company agrees and to all of which the rights hereunder of the
holders from time to time of the Warrant Certificates shall be subject:
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(a) The Warrant Agent shall be entitled to compensation to be
agreed upon with the Company in writing for all services rendered by it
and the Company agrees promptly to pay such compensation and to
reimburse the Warrant Agent for its reasonable out-of-pocket expenses
(including reasonable fees and expenses of counsel) incurred without
gross negligence or willful misconduct on its part in connection with
the services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent and any predecessor Warrant Agent, their
directors, officers, affiliates, agents and employees for, and to hold
them and their directors, officers, affiliates, agents and employees
harmless against, any loss, liability or expense of any nature
whatsoever (including, without limitation, reasonable fees and expenses
of counsel) incurred without gross negligence or willful misconduct on
the part of the Warrant Agent, arising out of or in connection with its
acting as such Warrant Agent hereunder and its exercise of its rights
and performance of its obligations hereunder. The obligations of the
Company under this Section 6.02 shall survive the exercise and the
expiration of the Warrant Certificates and the resignation and removal
of the Warrant Agent.
(b) In acting under this 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 of
agency or trust for or with any of the owners or holders of the Warrant
Certificates.
(c) The Warrant Agent may consult with counsel of its
selection and any advice or written opinion 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 such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur
no liability for or in respect of any action taken or omitted to be
taken or thing suffered by it in reliance upon any Warrant Certificate,
notice, direction, consent, certificate, affidavit, opinion of counsel,
instruction, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper
parties.
(e) The Warrant Agent, and its officers, directors, affiliates
and employees ("Related Parties"), may become the owners of, or acquire
any interest in, Warrant Certificates, shares or other obligations of
the Company with the same rights that it or they would have it if were
not the Warrant Agent hereunder and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial
or other transaction with the Company and may act on, or as Depository,
trustee or agent for, any committee or body of holders of shares or
other obligations of the Company as freely as if it were not the
Warrant Agent hereunder. Nothing in this Agreement shall
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be deemed to prevent the Warrant Agent or such Related Parties from
acting in any other capacity for the Company.
(f) The Warrant Agent shall not be under any liability for
interest on, and shall not be required to invest, any monies at any
time received by it pursuant to any of the provisions of this Agreement
or of the Warrant Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision
hereof) or the execution and delivery hereof (except the due execution
and delivery hereof by the Warrant Agent) or in respect of the validity
or execution of any Warrant Certificate (except its authentication
thereof).
(h) The recitals and other statements contained herein and in
the Warrant Certificates (except as to the Warrant Agent's
authentication thereon) shall be taken as the statements of the Company
and the Warrant Agent assumes no responsibility for the correctness of
the same. The Warrant Agent does not make any representation as to the
validity or sufficiency of this Agreement or the Warrant Certificates,
except for its due execution and delivery of this Agreement; provided,
however, that the Warrant Agent shall not be relieved of its duty to
authenticate the Warrant Certificates as authorized by this Agreement.
The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may
require:
(1) an Officers' Certificate (as defined in the
Indenture) stating on behalf of the Company that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Warrant Agreement relating to the
proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of
the Warrant Agent, an opinion of counsel for the Company
stating that, in the opinion of such counsel, all such
conditions precedent have been complied with provided that
such matter is one customarily opined on by counsel.
Each Officers' Certificate or, if requested, an opinion of
counsel with respect to compliance with a condition or covenant
provided for in this Warrant Agreement shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
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(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person,
he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has been complied
with.
(j) The Warrant Agent shall be obligated to perform 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 accountable or under any duty or
responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to
the Company pursuant to this Agreement. 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 in the Warrant
Certificates or in the case of the receipt of any written demand from a
holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 7.02 hereof, to make
any demand upon the Company.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company made or given under any provision of this Agreement shall be
sufficient if signed by its chairman of the Board of Directors, its
president, its treasurer, its controller or any vice president or its
secretary or any assistant secretary.
(l) The Warrant Agent shall have no responsibility in respect
of any adjustment pursuant to Article V hereof.
(m) the Company agrees that it will perform, execute,
acknowledge and deliver, or cause to be performed, executed,
acknowledged and delivered, all such further and other acts,
instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing by the Warrant Agent of the
provisions of this Agreement.
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(n) The Warrant Agent is hereby authorized and directed to
accept written instructions with respect to the performance of its
duties hereunder from any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice
president or the secretary or assistant secretary of the Company or any
other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or
officials for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions with respect to any
matter arising in connection with the Warrant Agent's duties and
obligations arising under this Agreement. Such application by the
Warrant Agent for written instructions from the Company may, at the
option of the Warrant Agent, set forth in writing any action proposed
to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such
action shall be taken and the Warrant Agent shall not be liable for any
action taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein (which date
shall be not less than 10 Business Days after the Company receives such
application unless the Company consents to a shorter period), provided
that (i) such application includes a statement to the effect that it is
being made pursuant to this paragraph (n) and that unless objected to
prior to such date specified in the application, the Warrant Agent will
not be liable for any such action or omission to the extent set forth
in such paragraph (n) and (ii) prior to taking or omitting any such
action, the Warrant Agent has not received written instructions
objecting to such proposed action or omission.
(o) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed on behalf of the Company by any one of the chairman
of the Board of Directors, the president, the treasurer, the
controller, any vice president or the secretary or assistant secretary
of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and
delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend
its own funds in the performance of its obligations and duties
hereunder.
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SECTION 6.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent
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 be at least 30 days after the date on
which such notice is given unless the Company agrees to accept less notice. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor Warrant Agent, qualified as provided in Section 6.03(d) hereof, by
written instrument in duplicate signed on behalf of the Company, one copy of
which shall be delivered to the resigning Warrant Agent and one copy to the
successor Warrant Agent. As provided in Section 6.03(d) hereof, such resignation
shall become effective upon the earlier of (x) the acceptance of the appointment
by the successor Warrant Agent or (y) 30 days after receipt by the Company of
notice of such resignation. The Company may, at any time and for any reason, and
shall, upon any event set forth in the next succeeding sentence, remove the
Warrant Agent and appoint a successor Warrant Agent by written instrument in
duplicate, specifying such removal and the date on which it is intended to
become effective, signed on behalf of the Company, one copy of which shall be
delivered to the Warrant Agent being removed and one copy to the successor
Warrant Agent. The Warrant Agent shall be removed as aforesaid if it shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Warrant Agent or of its property shall be appointed, or any
public officer shall take charge or control of it or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation. Any removal of
the Warrant Agent and any appointment of a successor Warrant Agent shall become
effective upon acceptance of appointment by the successor Warrant Agent as
provided in Section 6.03(d). 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 8.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the
Company shall fail to appoint a successor Warrant Agent within a period of 60
days after receipt of such notice of resignation or removal, then the holder of
any Warrant Certificate or the retiring Warrant Agent may apply to a court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to the Warrant Agent, either by the Company
or by such a court, the duties of the Warrant Agent shall be carried out by the
Company.
(d) Any successor Warrant Agent, whether appointed by the
Company or by a court, shall be a bank or trust company in good standing,
incorporated under the laws of the United States of America or any State thereof
and having, at the time of its appointment, a
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combined capital surplus of at least $250 million. Such successor Warrant
Agent shall execute and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder and all the provisions of this
Agreement, and thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Warrant Agent hereunder, and such predecessor shall thereupon become
obligated to (i) transfer and deliver, and such successor Warrant Agent shall be
entitled to receive, all securities, records or other property on deposit with
or held by such predecessor as Warrant Agent hereunder and (ii) upon payment of
the amounts then due it pursuant to Section 6.02(a) hereof, pay over, and such
successor Warrant Agent shall be entitled to receive, all monies deposited with
or held by any predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent
hereunder may be merged or converted, or any corporation or bank with which the
Warrant Agent may be consolidated, or any corporation or bank resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party,
or any corporation or bank to which the Warrant Agent shall sell or otherwise
transfer all or substantially all of its corporate trust business, shall be the
successor to the Warrant Agent under this Agreement (provided that such
corporation or bank shall be qualified as aforesaid) without the execution or
filing of any document or any further act on the part of any of the parties
hereto.
(f) No Warrant Agent under this Warrant Agreement shall be
personally liable for any action or omission of any successor Warrant Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement and the terms
of the Warrants may be amended by the Company and the Warrant Agent, without
the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective
or inconsistent provision contained herein or therein, or to effect any
assumptions of the Company's obligations hereunder and thereunder by a
successor corporation under the circumstances described in Section 5.01(d)
hereof or in any other manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of the Warrant Certificates.
The Company and the Warrant Agent may amend, modify or
supplement this Agreement and the terms of the Warrants, and waivers to
departures from the terms hereof and thereof may be given, with the consent of
the Requisite Warrant Holders (as defined below) for the purpose of adding any
provision to or changing in any manner or eliminating any
-35-
of the provisions of this Agreement or modifying in any manner the rights of the
holders of the outstanding Warrants; provided, however, that no such
modification that increases the Exercise Price or decreases the Exercise Rate,
makes any change to the last paragraph of Section 5.01(d), reduces the period of
time during which the Warrants are exercisable hereunder, or effects any change
to this Section 7.01 may be made with respect to any Warrant without the consent
of the holder of such Warrant. "Requisite Warrant Holders" means (i) in the case
of any amendment, modification, supplement or waiver affecting Warrant Holders,
the holders of a majority in number of the outstanding Warrants so affected, or
(ii) in the case of any amendment, modification, supplement or waiver affecting
Warrant Holders, a majority in number of Shares represented by the Warrants that
would be issuable assuming exercise thereof at the time such amendment,
modification, supplement or waiver is voted upon. Notwithstanding any other
provision of this Agreement, the Warrant Agent's consent must be obtained
regarding any supplement or amendment which alters the Warrant Agent's rights or
duties (it being expressly understood that the foregoing shall not be in
derogation of the right of the Company to remove the Warrant Agent in accordance
with Section 6.03 hereof). For purposes of any amendment, modification or waiver
hereunder, Warrants held by the Company or any of its Affiliates shall be
disregarded.
Any modification or amendment made in accordance with this
Agreement will be conclusive and binding on all present and future holders of
Warrant Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
SECTION 7.02. Notices and Demands to the Company and
Warrant Agent. If the Warrant Agent shall receive any notice or demand
addressed to the Company by the holder of a Warrant Certificate pursuant to
the provisions hereof or of the Warrant Certificates, the Warrant Agent shall
promptly forward such notice or demand to the Company.
SECTION 7.03. Addresses for Notices to Parties and for
Transmission of Documents. All notices hereunder to the parties hereto shall
be deemed to have been given when sent by certified or registered mail,
postage prepaid, or by facsimile transmission, confirmed by first class mail,
postage prepaid, addressed to any party hereto as follows:
-36-
To the Company:
Aavid Thermal Technologies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Warrant Agent:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Corporate Trust and Agency Services
Structural Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇-▇▇▇▇
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.04. Notices to Holders. Notices to holders of
Warrants shall be mailed to such holders at the addresses of such holders as
they appear in the Warrant Register. Any such notice shall be sufficiently given
if sent by first-class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW; SUBMISSION TO JURISDICTION. THE
VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER AND OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 7.06. Persons Having Rights Under Agreement. Nothing
in this Agreement expressed or implied and nothing that may be inferred from any
of the provi-
-37-
sions hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the Company, the Warrant Agent, the holders of
the Warrant Certificates and, with respect to Sections 4.04 and 4.05, the
holders of Shares issued pursuant to Warrants, any right, remedy or claim under
or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement hereof; and all covenants (except for Section 4.04 which
shall be for the benefit of all holders of Shares issued pursuant to Warrants),
conditions, stipulations, promises and agreements in this Agreement contained
shall be for the sole and exclusive benefit of the Company and the Warrant Agent
and their successors and of the holders of the Warrant Certificates.
SECTION 7.07. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.08. Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original; but such counterparts shall together constitute but
one and the same instrument.
SECTION 7.09. Inspection of Agreement. A copy of this
Agreement shall be available during regular business hours at the principal
corporate trust office of the Warrant Agent, for inspection by the holder of any
Warrant Certificate. The Warrant Agent may require such holder to submit his
Warrant Certificate for inspection by it.
SECTION 7.10. Availability of Equitable Remedies. Since a
breach of the provisions of this Agreement could not adequately be compensated
by money damages, holders of Warrants shall be entitled, in addition to any
other right or remedy available to them, to an injunction restraining such
breach or a threatened breach and to specific performance of any such provision
of this Agreement, and in either case no bond or other security shall be
required in connection therewith, and the parties hereby consent to such
injunction and to the ordering of specific performance.
SECTION 7.11. Obtaining of Governmental Approvals. The Company
will from time to time take all action required to be taken by it which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities acts filings
under United States Federal and state laws, and the rules and regulations of all
stock exchanges on which the Warrants are listed which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the
Warrant Certificates, the exercise of the Warrants or the issuance, sale,
transfer and delivery of the Shares issued upon exercise of the Warrants.
[SIGNATURE PAGE FOLLOWS]
S-1
IN WITNESS WHEREOF, this Warrant Agreement has been duly
executed by the parties hereto as of the day and year first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
BANKERS TRUST COMPANY,
as Warrant Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. 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 TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT 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 THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
INVESTOR ACQUIRING 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 OTHER DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER 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, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER
(A FORM OF WHICH MAY BE ▇▇-
▇- ▇
TAINED FROM THE COMPANY OR THE WARRANT AGENT) COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE COMPANY AND THE WARRANT AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A COMMON STOCK REGISTRATION RIGHTS AGREEMENT DATED AS OF FEBRUARY 2, 2000 AMONG
THE COMPANY, CIBC WORLD MARKETS CORP. AND FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC., A
COPY OF WHICH IS ON FILE WITH THE WARRANT AGENT.
A- 2
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
AAVID THERMAL TECHNOLOGIES, INC.
This Warrant Certificate certifies that [ ], or registered
assigns, is the registered holder of [ ] Warrants (the "Warrants") to purchase
shares of Class A Common Stock, par value $0.0001 per share (the "Class A Common
Stock"), and shares of Class H Common Stock, par value $0.0001 per share (the
"Class H Common Stock", together with the Class A Common Stock, the "Common
Stock") of AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
"Company", which term includes its successors and assigns). Each Warrant
entitles the holder to purchase from the Company at any time from 9:00 a.m. New
York City time on or after the Exercisability Date until 5:00 p.m., New York
City time, on February 1, 2007 (the "Expiration Date"), [ ] fully paid,
registered and non-assessable shares of Class A Common Stock and [ ] fully paid,
registered and non-assessable shares of Class H Common Stock, in each case
subject to adjustment as provided in Article V of the Warrant Agreement, at the
exercise price of $0.01 for each share purchased (the "Exercise Price") (the
shares of Common Stock purchasable upon exercise of a Warrant being herein
referred to as the "Shares" and, unless the context otherwise requires, such
term shall also mean the other securities or property purchasable and
deliverable upon exercise of a Warrant as provided in the Warrant Agreement),
upon surrender of this Warrant Certificate and payment of the Exercise Price (i)
by wire transfer or certified check, (ii) pursuant to the next sentence or (iii)
in any combination of (i) and (ii), at any office or agency maintained for that
purpose by the Company (the "Warrant Agent Office"), subject to the conditions
set forth herein and in the Warrant Agreement. A Warrant may also be exercised
solely by the surrender of the Warrant, and without the payment of the Exercise
Price in cash, for such number of Shares equal to the product of (1) the number
of Shares for which such Warrant is exercisable with payment of the Exercise
Price as of the date of exercise and (2) the Cashless Exercise Ratio. For
purposes of this Warrant, the "Cashless Exercise Ratio" shall equal a fraction,
the numerator of which is the excess of the Current Market Value per share of
the Common Stock on the date of exercise over the Exercise Price per share as of
the date of exercise and the denominator of which is the Current Market Value
per share of the Common Stock on the date of exercise. An exercise of a Warrant
in accordance with the immediately preceding sentences is herein called a
"Cashless Exercise." Upon surrender of a Warrant Certificate representing more
than one Warrant in connection with the Holder's option to elect a Cashless
Exercise, the number of Shares deliverable upon a Cashless Exercise shall be
equal to the Cashless Exercise Ratio multiplied by the product of (a) the number
of Warrants that the holder specifies is to be exercised pursuant to a Cashless
Exercise and (b) the number of Shares for which such Warrant is then exercisable
(without giving effect to the Cashless Exercise Option). If the Company has not
effected the registration under the Securities Act of the
▇- ▇
offer and sale of the Shares by the Company to the holders of the Warrants upon
the exercise thereof, the Company may elect to require that holders of the
Warrants effect the exercise of the Warrants solely pursuant to the Cashless
Exercise option and may also amend the Warrants to eliminate the requirement for
payment of the Exercise Price with respect to such Cashless Exercise option. All
provisions of the Warrant Agreement shall be applicable with respect to an
exercise of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby. Capitalized terms used herein
without being defined herein shall have the definitions ascribed to such terms
in the Warrant Agreement.
"Current Market Value" per share of Common Stock of the
Company or any other security at any date means (i) if the security is not
registered under the Exchange Act, (a) the fair market value of the security,
determined in good faith by the Board of Directors of the Company if the
aggregate amount of such security to be issued is less than or equal to $20.0
million, or if the aggregate amount of such security exceeds $20.0 million, as
determined by an Independent Financial Expert (provided that, in the case of the
calculation of Current Market Value for determining the cash value of fractional
shares, any such determination within six months that is, in the good faith
judgment of the Board, a reasonable determination of value, may be utilized) or
(ii) (a) if the security is registered under the Exchange Act, the average of
the daily closing sales prices of the securities for the 20 consecutive trading
days immediately preceding such date, or (b) if the security has been registered
under the Exchange Act for less than 20 consecutive trading days before such
date, then the average of the closing sales prices for all of the trading days
before such date for which closing sales prices are available, in the case of
each of (ii)(a) and (ii)(b), as certified to the Warrant Agent by the President,
any Vice President or the Chief Financial Officer of the Company. The closing
sales price for each such trading day shall be: (A) in the case of a security
listed or admitted to trading on any United States national securities exchange
or quotation system, the closing sales price, regular way, on such day, or if no
sale takes place on such day, the average of the closing bid and asked prices on
such day, (B) in the case of a security not then listed or admitted to trading
on any United States national securities exchange or quotation system, the last
reported sale price on such day, or if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reputable quotation source designated by the Company, (C) in the case of a
security not then listed or admitted to trading on any United States national
securities exchange or quotation system and as to which no such reported sale
price or bid and asked prices are available, the average of the reported high
bid and low asked prices on such day, as reported by a reputable quotation
service, or a newspaper of general circulation in the Borough of Manhattan, City
and State of New York customarily published on each Business Day, designated by
the Company, or, if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most recent
day (not more than 30 days prior to the date in question) for which prices have
been so reported and (D) if there are not bid and asked prices reported during
the 30 days prior to the date in question, the Current Market Value shall be
determined as if the Shares (or other securities) were not registered under the
Exchange Act.
▇- ▇
"Exercise Event" means, with respect to each Warrant, the date
of the occurrence of the earliest of: (1) an Initial Public Equity Offering (as
defined in the Warrant Agreement), (2) a class of equity securities of the
Company is listed on a national securities exchange or authorized for quotation
on the Nasdaq National Market or is otherwise subject to registration under the
Exchange Act or (3) the Separability Date.
"Independent Financial Expert" means a United States
investment banking firm of national or regional standing, (i) which does not,
and whose directors, officers and employees or Affiliates do not have a direct
or indirect material financial interest for its proprietary account in the
Company or any of its Affiliates and (ii) which, in the judgment of the Board of
Directors of the Company, is otherwise independent with respect to the Company
and its Affiliates and qualified to perform the task for which it is to be
engaged.
"Separability Date" shall mean the earliest to occur of: (1)
180 days after the Issue Date (as defined in the Indenture); (2) the occurrence
of a Change of Control (as defined in the Indenture); (3) the occurrence of an
Event of Default (as defined in the Indenture); (4) the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Notes or the Exchange Notes (as defined in
the Indenture); or (5) such earlier date as determined by CIBC in its discretion
and specified to the Company, the Trustee and the Warrant Agent in writing. The
separation of the Warrants and the Notes is herein referred to as a
"Separation."
No exercise of the Warrants may be effected which does not
call for the issuance of a number of shares of Common Stock in direct proportion
(subject only to rounding with respect to fractional shares) to the aggregate
number of shares of Common Stock then issuable upon exercise of the Warrants
evidenced hereby.
The Company has initially designated the principal corporate
trust office of the Warrant Agent in the Borough of Manhattan, The City of New
York, as the initial Warrant Agent Office. The number of Shares issuable upon
exercise of the Warrants ("Exercise Rate") is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
Any Warrants not exercised on or prior to 5:00 p.m., New York
City time, on February 1, 2007 shall thereafter be void.
If the Company merges, amalgamates or consolidates with or
into, or sells all or substantially all of its property and assets to, another
Person solely for cash, the holders of Warrants shall be entitled to receive
distributions on the date of such event on an equal basis with holders of Shares
(or other securities issuable upon exercise of the Warrants) as if the Warrants
had been exercised immediately prior to such event (less the Exercise Price).
Reference is hereby made to the further provisions on the
reverse hereof which provisions shall for all purposes have the same effect as
though fully set forth at this place.
▇- ▇
This Warrant Certificate shall not be valid unless
authenticated by the Warrant Agent, as such term is used in the Warrant
Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
A- 6
WITNESS the seal of the Company and signatures of its duly
authorized officers.
Dated:
AAVID THERMAL TECHNOLOGIES, INC.
By: _____________________________
Name:
Title:
Attest:
By: _____________________________
Name:
Title:
Certificate of Authentication:
This is one of the Warrants
referred to in the within
mentioned Warrant Agreement:
BANKERS TRUST COMPANY,
as Warrant Agent
By: _____________________________
Authorized Signatory
A-7
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
AAVID THERMAL TECHNOLOGIES, INC.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m., New York City time,
on [ ], 2007 (the "Expiration Date"), each of which represents the right to
purchase at any time on or after the Exercisability Date (as defined in the
Warrant Agreement) and on or prior to the Expiration Date [ ] shares of Class A
Common Stock and [ ] shares of Class H Common Stock, in each case subject to
adjustment as set forth in the Warrant Agreement. The Warrants are issued
pursuant to a Warrant Agreement dated as of February [ ], 2000 (the "Warrant
Agreement"), duly executed and delivered by the Company to Bankers Trust
Company, as Warrant Agent (the "Warrant Agent"), which Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Warrant Agent, the Company
and the holders (the words "holders" or holder" meaning the registered holders
or registered holder) of the Warrants.
Warrants may be exercised by (i) surrendering at any Warrant
Agent Office this Warrant Certificate with the form of Election to Exercise set
forth hereon duly completed and executed and (ii) to the extent such exercise is
not being effected through a Cashless Exercise by paying in full the Warrant
Exercise Price for each such Warrant exercised and any other amounts required to
be paid pursuant to the Warrant Agreement.
If all of the items referred to in the preceding paragraph are
received by the Warrant Agent at or prior to 11:00 a.m., New York City time, on
a Business Day, the exercise of the Warrant to which such items relate will be
effective on such Business Day. If any items referred to in the preceding
paragraph are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be deemed to be
effective on the next succeeding Business Day. Notwithstanding the foregoing, in
the case of an exercise of Warrants on February 1, 2007, if all of the items
referred to in the preceding paragraph are received by the Warrant Agent at or
prior to 5:00 p.m., New York City time, on such Expiration Date, the exercise of
the Warrants to which such items relate will be effective on the Expiration
Date.
As soon as practicable after the exercise of any Warrant or
Warrants, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of this Warrant Certificate, a certificate or
certificates evidencing the Share or Shares to which such holder is entitled, in
fully registered form, registered in such name or names as may be directed by
such holder pursuant to the Election to Exercise, as set forth on the reverse of
this Warrant Certificate. Such certificate or certificates evidencing the Share
or Shares shall be deemed to have been issued and any persons who are designated
to be named therein shall be
A-8
deemed to have become the holder of record of such Share or Shares as of the
close of business on the date upon which the exercise of this Warrant was deemed
to be effective as provided in the preceding paragraph.
The Company will not be required to issue fractional shares of
Common Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered Holder of this Warrant
Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the same fraction of the Current Market Value per share of Common Stock
on the Business Day preceding the date this Warrant Certificate is surrendered
for exercise.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this
Warrant Certificate at any office or agency maintained by the Company for that
purpose, a new Warrant Certificate evidencing in the aggregate a like number of
Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to the
contrary.
The term "Business Day" shall mean any day on which (i) banks
in New York City, (ii) the principal U.S. securities exchange or market, if any,
on which the Common Stock is listed or admitted to trading and (iii) the
principal U.S. securities exchange or market, if any, on which the Warrants are
listed or admitted to trading are open for business.
The Warrants and the Shares are entitled to the benefits of a
registration rights agreement relating to the Warrants and the shares of Common
Stock issuable upon exercise thereof (the "Common Stock Registration Rights
Agreement"). The Common Stock Registration Rights Agreement provides the holders
of Registrable Securities with the right, subject to the conditions and
limitations contained therein, to include the Registrable Securities in certain
registration statements filed by the Company for its account or for the account
of any of its securityholders.
A-9
(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise [ ] of
the Warrants represented by this Warrant Certificate and purchase the whole
number of Shares issuable upon the exercise of such Warrants and herewith
tenders payment for such Shares as follows:
$[ ] in cash or by certified or official bank check; or by
surrender of Warrants pursuant to a Cashless Exercise (as defined in the Warrant
Agreement) for [ ] shares of Class A Common Stock at the current Cashless
Exercise Ratio. $[ ] in cash or by certified or official bank check; or by
surrender of Warrants pursuant to a Cashless Exercise (as defined in the Warrant
Agreement) for [ ] shares of Class H Common Stock at the current Cashless
Exercise Ratio.
The undersigned requests that a certificate representing such
Shares be registered in the name of ____________________ whose address is
_________________________ and that such shares be delivered to
__________________________ whose address is __________________________. Any cash
payments to be paid in lieu of a fractional Share should be made to
__________________ whose address is ________________________ and the check
representing payment thereof should be delivered to ______________________ whose
address is_____________________.
Dated __________________, ____
Name of holder of
Warrant Certificate: _______________________________
(Please Print)
Tax Identification or
Social Security Number: ____________________________
Address: ___________________________________________
___________________________________________
Signature: _________________________________________
Note: The above signature must
correspond with the nameas
written upon the face of this
Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever and if the
certificate representing the
Shares or any Warrant
Certificate representing
Warrants not exercised is to be
registered in a name other than
that in which this Warrant
Certificate is regis-
A-10
tered, or if any cash payment to
be paid in lieu of a fractional
share is to be made to a person
other than the registered holder
of this Warrant Certificate, the
signature of the holder hereof
must be guaranteed as provided
in the Warrant Agreement.
Dated ____________________, ___
Signature: ________________________________________
Note: The above signature must
correspond with the name as
written upon the face of
this Warrant Certificate in
every particular, without
alteration or enlargement
or any change whatever.
Signature Guaranteed: _____________________________
[FORM OF ASSIGNMENT]
For value received _______________________ hereby sells,
assigns and transfers unto _____________________ the within Warrant Certificate,
together with all right, title and interest therein, 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.
Dated ____________________, ____
Signature: ________________________________________
Note: The above signature must
correspond with the name as
written upon the face of
this Warrant Certificate in
every particular, without
alteration or enlargement
or any change whatever.
Signature Guaranteed: _____________________________
A-11
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(1)
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
Number of Number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
---------------------------------------------------------------------------------------------------------------------
----------------------------------------
(1) This is to be included only if the Warrant is in golbal form.
A-12
EXHIBIT B
FORM OF LEGEND FOR GLOBAL WARRANT
Any Global Warrant authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL WARRANT WITHIN THE MEANING OF THE
WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO 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.
B-1
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "War-
rants") of AAVID THERMAL TECHNOLOGIES,
INC.
This Certificate relates to ____ Warrants held in* ___ book-entry
or* _______ certificated form by ______ (the "Transferor").
The Transferor:*
/ / has requested the Warrant Agent by written order 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 number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above); or
/ / has requested the Warrant Agent by written order 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 Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:
/ / Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 1.08(a)(y)(A) or Section
1.08(d)(i)(A) of the Warrant Agreement).
/ / Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act), in reliance on Rule 144A.
/ / Such Warrant is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act).
/ / Such Warrant is being transferred in reliance on Regulation S under
the Act.
/ / Such Warrant is being transferred in accordance with Rule 144 under
the Act.
C-1
/ / Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act.
------------------------------
[INSERT NAME OF TRANSFEROR]
By: _________________________
Date: _________________
*Check applicable box.
`
C-2
EXHIBIT D
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
-------------, ----
Bankers Trust Company
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of warrants (the
"Warrants") to purchase Common Stock of Aavid Thermal Technologies, Inc. (the
"Company"), we confirm that:
1. We have received such information as we deem
necessary in order to make our investment decision.
2. We understand that any subsequent transfer of the
Warrants is subject to certain restrictions and conditions set forth in the
Warrant Agreement and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Warrants except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the offer and sale of the Warrants
have not been registered under the Securities Act, and that the Warrants may not
be offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Warrants prior to (x) the date which is two
years after the later of the date of original issuance of the Warrants (or such
shorter period as may be prescribed by Rule 144(k) under the Securities Act or
any successor provision thereto) or the last day on which the Company or any
affiliate of the Company was owner of such Warrants, or any predecessor thereto,
and (y) such later date, if any, as may be required by applicable laws, we will
do so only (A) to the Company, (B) inside the United States in accordance with
Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by
D-1
a U.S. broker-dealer) to the Warrant Agent a signed letter substantially in the
form hereof, (D) outside the United States in accordance with Regulation S under
the Securities Act, (E) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available) or (F) pursuant to an effective
registration statement under the Securities Act and (G) pursuant to another
available exemption under the Securities Act, and we further agree to provide to
any person purchasing Warrants from us a notice advising such purchaser that
resales of the Warrants are restricted as stated herein.
4. We understand that, on any proposed resale of
Warrants, we will be required to furnish to the Warrant Agent and the Company,
such certification, legal opinions and other information as the Warrant Agent
and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the
Warrants purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Warrants, and we and any accounts for which we are acting are each able to bear
the economic risk of our or their investment, as the case may be.
6. We are acquiring the Warrants purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
D- 2
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
[Authorized Signatory]
Upon transfer the Warrants would be registered in the name of
the new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
D- 3
EXHIBIT E
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
---------------, ----
Bankers Trust Company
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of Warrants of Aavid
Thermal Technologies, Inc. (the "Company"), we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent
that:
(1) the offer of the Warrants was not made to a
person in the United States;
(2) either (a) at the time the buy offer was
originated, the transferee was outside the United States or we
and any person acting on our behalf reasonably believed that
the transferee was outside the United States, or (b) the
transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any
person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities
Act, as applicable;
(4) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer
restrictions applicable to the Warrants; and
▇- ▇
(6) if the circumstances set forth in Rule 904(c)
under the Securities Act are applicable, we have complied with
the additional conditions therein, including (if applicable)
sending a confirmation or other notice stating that the
Warrants may be offered and sold during the restricted period
specified in Rule 903(c)(2) or (3), as applicable, in
accordance with the provisions of Regulation S; pursuant to
registration of the Warrants under the Securities Act; or
pursuant to an available exemption from the registration
requirements under the Act.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S under the
Securities Act.
Very truly yours,
[Name of Transferee]
By:
[Authorized Signatory]
Upon transfer the Warrants would be registered in the name of
the new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
▇- ▇