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EXHIBIT 4.23
EXECUTION COPY
THE CERPLEX GROUP, INC.
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AMENDED AND RESTATED WARRANT AGREEMENT
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DATED AS OF APRIL 9, 1997
WARRANTS TO PURCHASE
SHARES OF COMMON STOCK
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TABLE OF CONTENTS
(Not a Part of the Agreement)
PAGE
1. FORM, EXECUTION AND TRANSFER OF WARRANT
CERTIFICATES..................................................... 2
1.1 Form of Warrant Certificates............................... 2
1.2 Execution of Warrant Certificates; Registration Books etc.. 2
1.3 Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Lost or Stolen Warrant Certificates.......... 4
1.4 Subsequent Issuance of Warrant Certificates................ 4
2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE................. 5
2.1 Exercise of Warrants....................................... 5
2.2 Issuance of Common Stock................................... 5
2.3 Unexercised Warrants....................................... 6
2.4 Cancellation and Destruction of Warrant Certificates....... 6
2.5 Cancellation of Warrants................................... 6
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY..................... 6
3.1 Representations and Warranties............................. 6
3.2 Reservation of Common Stock................................ 7
3.3 Common Stock to be Duly Authorized and Issued, Fully Paid
and Nonassessable.......................................... 7
3.4 Transfer Taxes............................................. 7
3.5 Common Stock Record Date................................... 8
3.6 Financial and Business Information......................... 8
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES
OF COMMON STOCK ISSUABLE PER WARRANT............................. 10
4.1 Mechanical Adjustments..................................... 10
4.2 Fractional Shares.......................................... 20
4.3 Special Agreements of the Company.......................... 20
5. INTERPRETATION OF THIS AGREEMENT................................. 21
5.1 Terms Defined.............................................. 21
5.2 Directly or Indirectly..................................... 25
5.3 Section Headings and Table of Contents and Construction.... 25
5.4 Governing Law.............................................. 25
6. MISCELLANEOUS.................................................... 25
6.1 Communications............................................. 25
6.2 Reproduction of Documents.................................. 27
6.3 Survival................................................... 27
6.4 Successors and Assigns..................................... 27
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6.5 Amendment and Waiver..................................... 27
6.6 Right of Action.......................................... 28
6.7 Expenses................................................. 28
6.8 Filings.................................................. 28
6.9 Entire Agreement......................................... 29
6.10 Term..................................................... 29
6.11 Duplicate Originals, Execution in Counterpart............ 29
Annex 1 -- Information as to Holders
Exhibit A -- Form of Warrant Certificate
Exhibit B -- Determination of Fair Market Share Price
Exhibit C -- Confidentiality
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AMENDED AND RESTATED WARRANT AGREEMENT
AMENDED AND RESTATED WARRANT AGREEMENT, dated as of April 9, 1997 (as may
be amended from time to time, this "AGREEMENT"), among THE CERPLEX GROUP, INC.,
a Delaware corporation (together with its successors and assigns, the
"COMPANY"), and each of the Persons identified as a Holder in Annex 1
individually, a "HOLDER" and, collectively, the "HOLDERS").
RECITALS:
A. Certain capitalized terms used in this Agreement have the meanings
assigned to them in Section 5.1 hereof.
B. In accordance with the FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED
WAIVER (the "FIRST AMENDMENT"), dated as of April 15, 1996 and entered into by
and among the Company, the financial institutions listed on the signature pages
thereof ("LENDERS") and ▇▇▇▇▇ Fargo Bank, National Association, as
administrative agent for the Lenders ("ADMINISTRATIVE AGENT"), under that
certain Credit Agreement dated as of October 12, 1994 (the "CREDIT AGREEMENT"),
by and among, inter alia, the Company, Lenders and Administrative Agent, which
such Credit Agreement was amended by the First Amendment, and in consideration
of certain waivers and amendments set forth in the First Amendment, the Company
issued in the aggregate one hundred twenty-five thousand (125,000) warrants
(individually, an "ORIGINAL WARRANT" and, collectively, the "ORIGINAL WARRANTS")
of the Company to the Lenders, each Original Warrant representing the right to
purchase, upon the terms and subject to the conditions set forth in this
Agreement, and subject to adjustment as set forth herein, one (1) share of
Common Stock.
C. In accordance with the THIRD AMENDMENT TO CREDIT AGREEMENT (the "THIRD
AMENDMENT"), dated as of April 9, 1997 and entered into by and among the
Company, Lenders and Administrative Agent, and in consideration of certain
amendments set forth in the Third Amendment, the Company has agreed to adjust
the Initial Purchase Price of the Original Warrants.
D. In accordance with the Third Amendment, the Company has also agreed to
issue in the aggregate an additional seven hundred fifty thousand (750,000)
warrants (individually, an "ADDITIONAL WARRANT" and, collectively, the
"ADDITIONAL WARRANTS") of the Company to the Lenders, each Additional Warrant
representing the right to purchase, upon the terms and subject to the conditions
set forth in this Agreement, and subject to adjustment as set forth herein, one
(1) share of Common Stock.
E. In connection with the execution of the Third Amendment and this
Agreement, the Company will issue Warrant Certificates evidencing the Additional
Warrants and, within 5 Business Days thereafter, will exchange each Holder's
Warrant
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Certificates for a single Warrant Certificate evidencing such Holder's Original
Warrants and such Holder's Additional Warrants.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:
1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES
1.1 FORM OF WARRANT CERTIFICATES.
The warrant certificates (individually, a "WARRANT CERTIFICATE" and,
collectively, the "WARRANT CERTIFICATES") evidencing the Warrants, and the forms
of assignment and of election to purchase shares to be attached to such
certificates, shall be substantially in the form set forth in Exhibit A and may
have such letters, numbers or other marks of identification or designation as
may be required to comply with any law or with any rule or regulation of any
governmental authority, stock exchange or self-regulatory organization made
pursuant thereto. Each Warrant Certificate shall be dated as of the date of
issuance thereof by the Company, either upon initial issuance or upon transfer
or exchange, and on its face shall initially entitle the holder thereof to
purchase the number of shares of Common Stock equal to the number of Warrants
represented by such Warrant Certificate at a price per share equal to the
Purchase Price, but the number of such shares and the Purchase Price shall be
subject to adjustment as provided herein.
1.2 EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS ETC.
(a) EXECUTION OF WARRANT CERTIFICATES. The Warrant Certificates
shall be executed on behalf of the Company by its President, one of its
Vice Presidents or any other officer of the Company authorized by the
Board of Directors, which execution shall be attested by the Secretary or
an Assistant Secretary of the Company. In case any officer of the Company
who shall have signed any Warrant Certificate shall cease to be such
officer of the Company before issuance and delivery by the Company of such
Warrant Certificate, such Warrant Certificate nevertheless may be issued
and delivered with the same force and effect as though the individual 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 any individual who, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this
Agreement any such individual was not such an officer.
(b) REGISTRATION BOOKS, ETC. The Company will keep or cause to be
kept at its office maintained at the address of the Company set forth in
Section 6.1 hereof, or at such other office of the Company in the United
States of America of which the Company shall have given notice to each
holder of Warrant
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Certificates, books for registration and transfer of the Warrant
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Warrant Certificates, the
registration number and the number of Warrants evidenced on its face by
each of the Warrant Certificates and the date of each of the Warrant
Certificates. Every holder of a Warrant Certificate by accepting the same
consents and agrees with the Company and with every other holder of a
Warrant Certificate that:
(i) the Warrant Certificates are transferable only on the
registry books of the Company if surrendered at the office of the
Company referred to in this Section 1.2(b), duly endorsed or
accompanied by an instrument of transfer (substantially in the form
attached to Exhibit A); and
(ii) the Company may deem and treat the Person in whose name
each Warrant Certificate is registered as the absolute owner thereof
and of the Warrants evidenced thereby (notwithstanding any notations
of ownership or writing on the Warrant Certificates made by anyone
other than the Company) for all purposes whatsoever, and the Company
shall not be affected by any notice to the contrary.
(c) ACQUISITION FOR INVESTMENT. Each Holder represents that it is
acquiring the Warrants for its own account for investment and not with a
view to any resale or distribution thereof, within the meaning of the
Securities Act, but without prejudice to its right at all times to sell or
otherwise dispose of all or any part of the Warrants or the shares of
Common Stock issuable upon the exercise of such Warrant under a
registration statement filed under the Securities Act or in a transaction
exempt from the registration requirements of the Securities Act. Each
Holder agrees that each outstanding Warrant Certificate (and each
certificate representing a share or shares of Common Stock issued upon the
exercise of a Warrant) which it owns shall, unless the Securities
represented by such certificate have been registered or have been sold in
accordance with Rule 144 (or any successor regulation thereto) under the
Securities Act, bear an endorsement reading substantially as follows:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any state securities law. These securities may not be sold,
transferred, pledged or hypothecated in any transaction unless
first registered under such laws or unless such transaction is
exempt from the registration requirements of such laws. The
securities represented by this certificate are subject to
certain market holdback provisions set forth in that certain
registration rights agreement dated November 19, 1993, as
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amended, among The Cerplex Group, Inc. and
the other parties thereto.
1.3 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; LOST OR STOLEN WARRANT CERTIFICATES.
(a) TRANSFER, SPLIT UP, ETC. Any Warrant Certificate, with or
without other Warrant Certificates, may be transferred, split up, combined
or exchanged for another Warrant Certificate or Warrant Certificates,
entitling the registered holder or transferee thereof to purchase a like
number of shares of Common Stock as the Warrant Certificate or Warrant
Certificates surrendered then entitled such registered holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange
any Warrant Certificate shall make such request in writing delivered to
the Company, and shall surrender the Warrant Certificate or Warrant
Certificates to be transferred, split up, combined or exchanged at the
office of the Company referred to in Section 1.2(b) hereof, whereupon the
Company shall deliver promptly to the Person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested.
Each holder of Warrants after any such transfer or exchange shall, by its
acceptance of the Warrants and Warrant Certificates being so transferred,
be deemed to have agreed to the terms and provisions of confidentiality
set forth on Exhibit C.
(b) LOSS, THEFT, ETC. Upon receipt of written notice from the holder
of any Warrant Certificate of the loss, theft, destruction or mutilation
of such Warrant Certificate and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured indemnity agreement,
or, in the case of any such mutilation, upon surrender and cancellation of
such Warrant Certificate, the Company will make and deliver a new Warrant
Certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant Certificate.
1.4 SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES.
Subsequent to their original issuance, no Warrant Certificates shall be
issued except:
(a) Warrant Certificates issued upon any transfer, combination,
split up or exchange of Warrants pursuant to Section 1.3(a) hereof;
(b) Warrant Certificates issued in replacement of mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 1.3(b)
hereof; and
(c) Warrant Certificates issued pursuant to Section 2.3 hereof upon
the partial exercise of any Warrant Certificate to evidence the
unexercised portion of such Warrant Certificate.
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2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE
2.1 EXERCISE OF WARRANTS.
(a) PURCHASE PRICE PAYMENT UPON EXERCISE. At any time on or after
the Effective Date and prior to 5:00 p.m. (Los Angeles, California time)
on the Termination Date, the holder of any Warrant Certificate may
exercise the Warrants evidenced thereby in whole or in part, by surrender
of such Warrant Certificate, with an election to purchase (a form of which
is attached as part of the form of Warrant Certificate attached as Exhibit
A) attached thereto duly executed, to the Company at its office referred
to in Section 1.2(b) hereof, together with payment of the Purchase Price,
payable as set forth below in this Section 2. 1, for each share of Common
Stock as to which the Warrants are exercised. The Purchase Price shall be
(i) payable in cash, by certified or official bank check payable to the
order of the Company or by wire transfer of immediately available funds to
the account of the Company or (ii) satisfied by the delivery of Warrant
Certificates to the Company for cancellation in accordance with the
formula set forth in Section 2.1 (b).
(b) NET EXERCISE PRICE. In lieu of any holder of a Warrant
Certificate exercising the Warrants (or any portion thereof) evidenced by
such Warrant Certificate for cash, as contemplated by Section 2.1 (a),
such holder may, in connection with such exercise, elect to receive shares
of Common Stock equal to the product of (i) the number of shares of Common
Stock issuable upon such exercise of such Warrant Certificate (or, if only
a portion of such Warrant Certificate is being exercised, issuable upon
the exercise of such portion) multiplied by (ii) a fraction, the numerator
of which is the Market Price per share of Common Stock at the time of such
exercise minus the Purchase Price per share of Common Stock at the time of
such exercise, and the denominator of which is the Market Price per share
of Common Stock at the time of such exercise.
2.2 ISSUANCE OF COMMON STOCK.
Upon timely receipt on or after the Effective Date of a Warrant
Certificate, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for each of the shares to be purchased in the
manner provided in Section 2.1 hereof and an amount equal to any applicable
transfer tax (if not payable by the Company as provided in Section 3.4 hereof),
the Company shall thereupon promptly cause certificates for the number of whole
shares of Common Stock then being purchased to be delivered to or upon the order
of the registered holder of such Warrant Certificate, registered in such name or
names as may be designated by such holder, and, promptly after such receipt
deliver the cash, if any, to be paid in lieu of fractional shares pursuant to
Section 4.2 hereof to or upon the order of the registered holder of such Warrant
Certificate.
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2.3 UNEXERCISED WARRANTS.
In case the registered holder of any Warrant Certificate shall exercise
less than all the Warrants evidenced thereby, a new Warrant Certificate
evidencing Warrants equal in number to the number of Warrants remaining
unexercised shall be issued by the Company to the registered holder of such
Warrant Certificate or to its duly authorized assigns.
2.4 CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES.
All Warrant Certificates surrendered to the Company for the purpose of
exercise, exchange, substitution or transfer shall be cancelled by it, and no
Warrant Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall cancel
and retire any other Warrant Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof.
2.5 CANCELLATION OF WARRANTS.
[INTENTIONALLY OMITTED]
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1 REPRESENTATIONS AND WARRANTIES.
(a) CORPORATE AUTHORITY. The Company has the corporate power and
authority to:
(i) authorize, execute, deliver and enter into this Agreement and
the Warrant Certificates;
(ii) issue and sell the Warrants;
(iii) perform its obligations under this Agreement and the Warrants;
(iv) authorize, execute, deliver, issue and sell the shares of the
Common Stock issuable upon exercise of the Warrants.
(b) ENFORCEABILITY OF OBLIGATIONS. This Agreement and the Warrant
Certificates have been duly authorized, executed and delivered by the Company.
This Agreement, the Warrant Certificates and the Warrants constitute the legal,
valid and binding obligations of the Company, enforceable in accordance with
their respective terms, except:
(c) as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting the enforceability of
creditors' rights generally; and
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(d) as such enforceability may be subject to the availability
of equitable remedies.
The holders of the Warrants are entitled to the benefits of this
Agreement.
3.2 RESERVATION OF COMMON STOCK.
The Company represents and warrants that it has reserved for issuance a
sufficient number of shares of Common Stock to permit the exercise of all the
Warrants, and all other rights, options or warrants exercisable into Common
Stock. The Company covenants and agrees that it will at all times cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock such number of shares of Common Stock as will be sufficient to permit the
exercise in full of all Warrants outstanding hereunder.
3.3 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID AND
NONASSESSABLE.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all shares of Common Stock delivered upon the
exercise of any Warrants, at the time of delivery of the certificates for such
shares, shall be duly and validly authorized and issued and fully paid and
nonassessable, free of any preemptive rights and free of any pledge, security
interest, lien or other encumbrance.
3.4 TRANSFER TAXES.
The Company covenants and agrees that it will pay when due and payable any
and all federal and state transfer taxes and charges that may be payable in
respect of
(a) the execution and delivery of this Agreement;
(b) the initial issuance and delivery of each Warrant Certificate
hereunder;
(c) the issuance and delivery of each Warrant Certificate issued in
exchange for any other Warrant Certificate pursuant to Section 1.3 or
Section 2.3 hereof; and
(d) the issuance and delivery of each share of Common Stock issued
upon the exercise of any Warrant.
The Company shall not, however, be required to
(i) pay any transfer tax that may be payable in respect of the
transfer or delivery of Warrant Certificates or the issuance or delivery
of certificates for shares of Common Stock in a name other than that of
the registered holder of the
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Warrant Certificate evidencing any Warrant surrendered for exercise (any
such tax being payable by the holder of such Warrant Certificate at the
time of surrender) or
(ii) issue or deliver any such certificates referred to in the
foregoing clause (i) for shares of Common Stock upon the exercise of any
Warrant until any such tax referred to in the foregoing clause (i) shall
have been paid.
3.5 COMMON STOCK RECORD DATE.
Each Person in whose name any certificate for shares of Common Stock is
issued upon the exercise of Warrants shall for all purposes be deemed to have
become the holder of record of the Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered with an election to purchase
attached thereto duly executed and payment of the aggregate Purchase Price (and
any applicable transfer taxes, if payable by such Person) was made. Prior to the
exercise of the Warrants evidenced thereby, the holder of a Warrant Certificate
shall not be entitled to any rights of a shareholder in the Company with respect
to shares for which the Warrants shall be exercisable, including, without
limitation, any right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein or in any other
applicable agreement between the Company and such holder.
3.6 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Warrants:
(a) QUARTERLY STATEMENTS -- as soon as practicable after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year), and in
any event within forty-five (45) days thereafter, duplicate copies of
(i) a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income and cash flows of the
Company and the Subsidiaries for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year
ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the immediately preceding fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally (provided that such financial statements need not contain footnotes),
and certified as complete and correct, subject to changes resulting from
year-end adjustments, by a Senior Financial Officer;
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(b) ANNUAL STATEMENTS -- as soon as practicable after the end of
each fiscal year of the Company, and in any event within ninety (90) days
thereafter, duplicate copies of
(i) consolidated and consolidating balance sheets of the
Company and the Subsidiaries, as at the end of such year, and
(ii) consolidated and consolidating statements of income,
shareholders' equity and cash flows of the Company and the
Subsidiaries for such year,
setting forth in each case in comparative form the figures for the
immediately preceding fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by
(A) in the case of such consolidated statements, a report
thereon of independent certified public accountants of recognized
national standing, which report shall express an opinion in the form
of the standard auditor's report under generally accepted auditing
standards which shall state that such financial statements present
fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and
cash flows and have been prepared in conformity with GAAP, and that
the examination of such accountants in connection with such
financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances,
(B) a statement from such independent certified public
accountants that such consolidating statements were prepared using
the same work papers as were used in the preparation of such
consolidated statements, and
(C) a certification by a Senior Financial Officer that such
consolidated and consolidating statements are complete and correct;
(c) SEC AND OTHER REPORTS -- promptly upon their becoming available,
a copy of each financial statement, report (including, without limitation,
each Quarterly Report on Form 10-Q, each Annual Report on Form 10-K and
each Current Report on Form 8-K), notice or proxy statement sent by the
Company or any Subsidiary to shareholders generally and of each regular or
periodic report and any registration statement, prospectus or written
communication (other than transmittal letters), and each amendment
thereto, in respect thereof filed by the Company or any Subsidiary with,
or received by, such Person in connection therewith from, the National
Association of Securities Dealers, any securities exchange or the SEC; and
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(d) REQUESTED INFORMATION -- with reasonable promptness, such other
data and information as from time to time may be reasonably requested,
including, without limitation, information required by 17 C.F.R.
Section 230.144A, as amended from time to time.
Each of the Holders hereby agrees to the terms of confidentiality set
forth on Exhibit C.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES OF COMMON STOCK ISSUABLE
PER WARRANT
4.1 MECHANICAL ADJUSTMENTS.
The number of shares of Common Stock purchasable upon the exercise of each
Warrant, and the Purchase Price, shall be subject to adjustment as follows:
(a) DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In the event that the
Company shall
(i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a
greater number of shares or combine its outstanding shares of Common
Stock into a smaller number of shares,
then the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision or combination shall
be adjusted to the price determined by multiplying the Purchase Price in
effect immediately prior to such event by the quotient of:
(A) the total number of shares of Adjusted Outstanding Common
Stock immediately prior to such event;
divided by
(B) the total number of Adjusted Outstanding Common Stock
immediately after such event.
An adjustment made pursuant to this Section 4.1(a) shall become effective
on the effective date of such event.
(b) RIGHTS, OPTIONS, WARRANTS AND CONVERTIBLE OR EXCHANGEABLE
SECURITIES. In the event that the Company shall issue any rights, options,
warrants or convertible or exchangeable Securities to all holders of its
shares of Common Stock, without charge to such holders, entitling such
holders to subscribe for or
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purchase shares of Common Stock at a price per share (or having a
conversion or exchange price per share, in the case of a Security
convertible or exchangeable into shares of Common Stock) that is (or to
amend or modify any provision of any thereof such that the conversion,
exchange or exercise price becomes) lower at the record date in respect of
which such rights, warrants, options or Securities were issued or amended
than the Reference Price on such record date, then the Purchase Price in
effect immediately after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by the quotient of:
(i) the sum of
(A) the number of shares of Adjusted Outstanding Common
Stock as of such record date, plus
(B) the quotient of
(ii) the Aggregate Consideration Receivable in
respect of such rights, options, warrants or convertible
or exchangeable Securities, divided by
(ii) the Reference Price on such record date;
divided by
(ii) the sum of
(A) the number of shares of Adjusted Outstanding Common
Stock as of such record date, plus
(B) the number of additional shares of Common Stock
initially issuable pursuant to such rights, options or
warrants or into which such convertible or exchangeable
Securities are initially convertible or exchangeable.
Such adjustment shall be made whenever such rights, options, or warrants
or convertible or exchangeable Securities are issued or amended, and shall
become effective on the date of issuance or amendment of such rights,
options, warrants or convertible or exchangeable Securities.
(c) DISTRIBUTIONS OF PROPERTY. In the event that the Company shall
distribute to holders of shares of Common Stock (including, without
limitation, any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) shares of
stock (other than Common Stock) or evidences of its indebtedness or assets
(excluding (x) cash dividends paid out of retained earnings after November
19, 1998, (y) Regular Cash Dividends
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paid after the date hereof and on or prior to November 19, 1998 and (z)
dividends payable solely in additional shares of the Common Stock) or
rights, options or warrants or convertible or exchangeable Securities
(excluding those referred to in Section 4.1(b) and Section 4.1(d) hereof),
then in each case the Purchase Price in effect immediately after the
record date in respect of which such stock, indebtedness, assets, rights,
options, warrants or Securities were issued shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by the quotient of:
(i) the result of
(A) the Reference Price on such record date, minus
(B) the quotient of
(i) the then fair value (as determined in good
faith and on a reasonable basis by the Board of
Directors, whose determination, if so made, shall be
conclusive) of the shares of stock or assets or
evidences of indebtedness so distributed or of such
rights, options or warrants, or of such convertible or
exchangeable Securities, divided by
(ii) the number of shares of Adjusted Outstanding
Common Stock as of the record date;
divided by
(ii) the Reference Price on such record date.
Such adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of such distribution.
(d) ISSUANCES OF COMMON STOCK AND OTHER SECURITIES.
(i) In the event that the Company shall issue or sell shares
of Common Stock, or rights, options, warrants or convertible or
exchangeable Securities containing the right to subscribe for or
purchase shares of Common Stock (excluding Excluded Securities, as
defined in Section 4.1 (d)(ii) hereof) at a price per share of
Common Stock lower than the Reference Price in effect on the date
(the "ADJUSTMENT DATE") of such issuance or sale, then the Purchase
Price in effect immediately after the Adjustment Date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such Adjustment Date by the quotient of:
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(A) the sum of
(i) the number of shares of Adjusted Outstanding
Common Stock outstanding immediately prior to such
issuance or sale, plus
(ii) the quotient of (1) the Aggregate
Consideration Receivable in respect of such rights,
options, warrants or convertible or exchangeable
Securities, divided by (2) the Reference Price on the
Adjustment Date;
divided by
(B) the sum of
(i) the number of shares of Adjusted Outstanding
Common Stock outstanding immediately prior to such
issuance or sale, plus
(ii) the number of additional shares of Common
Stock so issued or sold (or initially issuable pursuant
to such rights, options or warrants or into which such
convertible or exchangeable Securities are initially
convertible or exchangeable).
For purposes of this clause (i), "ADJUSTMENT DATE" may, in connection with
certain consolidations and mergers, have the meaning provided for in
Section 4.1 (e).
(ii) "EXCLUDED SECURITIES" shall mean and include:
(A) shares of Common Stock, rights, options, warrants or
convertible or exchangeable Securities issued in any of the
transactions described in Section 4.1(a), Section 4.1(b),
Section 4.1(c) or Section 4.1 (e) hereof and with respect to
which an adjustment to the Purchase Price has been made in
accordance with any of such Sections ;
(B) shares of Common Stock issuable upon exercise of the
Warrants;
(C) shares of Common Stock issuable upon exercise of
rights, options or warrants or conversion or exchange of
convertible or exchangeable Securities issued or sold under
circumstances which caused an adjustment pursuant to this
Section 4.1(d);
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(D) options, and shares of Common Stock issuable upon
exercise of such options, issued to individuals pursuant to
the SOP or shares of Common Stock issuable pursuant to any
restricted stock plan approved by the Board of Directors and
implemented by the Company in the future, provided that any
such options issued after the date hereof pursuant to the SOP
and any shares of Common Stock issuable upon the exercise
thereof and any shares of Common Stock issued pursuant to any
such restricted stock plan after the date hereof which, in the
aggregate, exceed, at the time of the issuance of thereof, ten
percent (10%) of the Fully Diluted Outstanding Common Stock,
determined at such time, shall not constitute Excluded
Securities;
(E) shares of Common Stock and/or rights, options,
warrants or convertible or exchangeable Securities (and the
shares of Common Stock issuable upon the exercise of such
rights, options, warrants or convertible or exchangeable
Securities), provided that (1) such shares of Common Stock
and/or rights, options, warrants or convertible or
exchangeable Securities are issued in connection with one or
more private placements of equity Securities of the Company
effected on or prior to July 15, 1996, (2) the total aggregate
consideration paid in cash in respect of such shares of Common
Stock and/or rights, options, warrants or convertible or
exchangeable Securities is not more than $8,000,000, (3) all
such shares of Common Stock together with all shares of Common
Stock issuable upon the exercise of any of such rights,
options, warrants or convertible or exchangeable Securities
shall not, in the aggregate, exceed 12% of Fully Diluted
Outstanding Common Stock, determined as of April 16, 1996, and
(4) the sale of such shares of Common Stock and/or rights,
options, warrants or convertible or exchangeable Securities is
done on an arm's-length basis and the setting of the exercise,
strike or conversion prices in respect of such rights,
options, warrants or convertible or exchangeable Securities is
done on an arm's-length basis; and
(F) warrants (including Warrants), and shares of Common
Stock issued or issuable upon exercise of warrants or
Warrants, issued on or prior to April 9, 1997 to any then
holder of the Company's senior or subordinated indebtedness.
(iii) In the case of rights, options, warrants or convertible
or exchangeable Securities, the "price per share of Common Stock"
referred to in Section 4.1(d)(i) hereof shall be equal to the
quotient of
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(A) the Aggregate Consideration Receivable in respect of
such rights, options, warrants or convertible or exchangeable
Securities, divided by
(B) the total number of shares of Common Stock covered
by such rights, options, warrants or convertible or
exchangeable Securities.
(iv) "AGGREGATE CONSIDERATION RECEIVABLE" shall mean, in the
case of a sale of shares of Common Stock, the aggregate gross amount
paid (without deduction for fees and expenses, underwriting
discounts or investment banking fees associated therewith) in
connection therewith and, in the case of an issuance or sale of
rights, options, warrants or convertible or exchangeable Securities,
the sum of
(A) the aggregate gross amount paid for such rights,
options, warrants or convertible or exchangeable Securities,
plus
(B) the aggregate consideration or premiums stated in
such rights, options, warrants or convertible or exchangeable
Securities to be payable for the shares of Common Stock
covered thereby.
(v) In the event that the Company shall issue and sell shares
of Common Stock, or rights, options, warrants or convertible or
exchangeable Securities containing the right to subscribe for or
purchase shares of Common Stock, for a consideration consisting, in
whole or in part, of Property other than cash, then in determining
the "price per share of Common Stock" referred to in Section 4.1
(d)(i) and Section 4.1 (d)(iii) hereof and the "Aggregate
Consideration Receivable" referred to in Section 4.1(d)(i), Section
4.1(d)(iii) and Section 4.1 (d)(iv) hereof, the Board of Directors
shall determine, in good faith and on a reasonable basis, the fair
value of such Property, and such determination, if so made, shall be
binding upon all holders of Warrants.
(e) CONSOLIDATION; MERGER; SALE OF THE COMPANY. In the event that
there shall be:
(i) any consolidation of the Company with, or merger of the
Company with or into, another corporation (other than a merger in
which the Company is the surviving corporation and that does not
result in any reclassification or change of shares of Common Stock
outstanding immediately prior to such merger);
(ii) any sale or conveyance to another corporation of the
Property of the Company substantially as an entirety; or
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(iii) any reclassification of the Common Stock that results in
the issuance of other Securities of the Company;
then lawful provision shall be made as a part of the terms of such
transaction or otherwise so that the holders of Warrants shall thereafter
have the right to purchase the number and kind of shares of stock, other
Securities, cash, Property and rights receivable upon such consolidation,
merger, sale, conveyance or reclassification by a holder of such number of
shares of Common Stock as the holder of a Warrant would have had the right
to acquire upon the exercise of such Warrant immediately prior to such
consolidation, merger, sale or conveyance, at the Purchase Price then in
effect, provided that nothing in this clause (e) shall entitle any holder
of Warrants to acquire or have the right to purchase any of the foregoing
in connection with any sale or conveyance referred to in clause (ii) above
if, with respect to such sale or conveyance, no holder of Common Stock
would have the right to acquire or purchase any of the foregoing and none
of the foregoing were in fact distributed to holders of Common Stock and
provided further that nothing in the foregoing proviso in this clause (e)
shall restrict the rights of the holders of Warrants under Section 4.1
(c). To the extent that
(A) the Company shall issue any shares of Common Stock or
rights, options, warrants or convertible or exchangeable Securities
containing the right to subscribe for or purchase shares of Common
Stock (other than Excluded Securities) in connection with any
consolidation or merger of the Company and
(B) such issuance of such shares, rights, options, warrants or
convertible or exchangeable Securities would otherwise cause an
adjustment under Section 4.1(d),
the Adjustment Date in respect of such adjustment, notwithstanding the
definition of such term, shall be the business day immediately preceding
the date of the public announcement by the Company of such merger or
consolidation or, if such merger or consolidation shall have been
generally known to the public prior to such announcement date, the date on
which the Required Warrantholders and the Company shall mutually agree
upon in good faith and in accordance with the essential intent and
principles of this Section 4 of fairly protecting the exercise rights of
the holders of Warrants and, if no such date can be so mutually agreed
upon, the Company shall appoint (at its expense) a firm of independent
certified public accountants of recognized national standing, which may
not be the regular auditors of the Company and which are reasonably
acceptable to the Required Warrantholders, which shall give their opinion
as to the appropriate date for such adjustment (after giving effect to the
aforesaid intent and principles of this Section 4); upon receipt of such
opinion, the Company will promptly mail a copy of such opinion to the
holders of Warrants and make the adjustments required under this Section 4
as of the date stipulated therein.
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(f) DE MINIMIS CHANGES IN PURCHASE PRICE. No adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided that any adjustments that, at the time of the calculation
thereof, are less than one percent (1%) of the Purchase Price at such time
and by reason of this Section 4.1 (f) are not required to be made at such
time shall be carried forward and added to any subsequent adjustment or
adjustments for purposes of determining whether such subsequent adjustment
or adjustments, as so supplemented, exceed the one percent (1%) amount set
forth in this Section 4.1 (f) and, if any such subsequent adjustment, as
so supplemented or otherwise, should exceed such one percent (1%) amount,
all adjustments deferred prior thereto and not previously made shall then
be made. In any case, all such adjustments being carried forward pursuant
to this Section 4.1 (f) shall be given effect upon the exercise of any
Warrants by any holder thereof for purposes of determining the Purchase
Price thereof. All calculations shall be made to the nearest
ten-thousandth of a Dollar ($0.0001).
(g) ADJUSTMENT OF NUMBER OF SHARES ISSUABLE PURSUANT TO WARRANTS.
Upon each adjustment of the Purchase Price as a result of the calculations
made in this Section 4.1, each Warrant outstanding immediately prior to
the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of Common
Stock (calculated to the nearest one thousandth) obtained by multiplying
the number of shares of Common Stock covered by such Warrant immediately
prior to such adjustment by the quotient of:
(i) the Purchase Price in effect immediately prior to such
adjustment,
divided by
(ii) the Purchase Price in effect immediately after such
adjustment.
All Warrants originally issued by the Company hereunder shall, subsequent
to any adjustment made to the Purchase Price hereunder, evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Common Stock determined to be purchasable from time to time hereunder upon
exercise of such Warrants, all subject to further adjustment as provided
herein. Each such adjustment shall be valid and binding upon the Company
and the holders of Warrants irrespective of whether the Warrant
Certificates theretofore and thereafter issued express the Purchase Price
per share of Common Stock and the number of shares of Common Stock that
were expressed upon the initial Warrant Certificates issued hereunder.
(h) MISCELLANEOUS.
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(i) Adjustments shall be made pursuant to this Section 4.1
successively whenever any of the events referred to in Section 4.1
(a) through Section 4.1(e), inclusive, hereof shall occur.
(ii) Shares of Common Stock owned by or held for the account
of the Company, including shares acquired by the Company during any
time any Warrants are outstanding, shall not, for purposes of the
adjustments set forth in this Section 4.1, be deemed outstanding.
(i) EXPIRATION OF RIGHTS, OPTIONS, ETC. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges referred to
above in this Section 4.1 without the exercise thereof, the Purchase Price
and the number of shares of Common Stock purchasable upon the exercise of
each Warrant shall be readjusted and shall thereafter be such as such
Purchase Price and such number of shares of Common Stock would have been
had they been originally adjusted (or had the original adjustment not been
required, as the case may be) as if:
(i) the only shares of Common Stock so issued were the shares
of Common Stock, if any, actually issued or sold upon the exercise
of such rights, options, warrants or conversion or exchange
privileges; and
(ii) such shares of Common Stock, if any, were issued or sold
for the consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually received
by the Company for the issuance, sale or grant of all of such
rights, options, warrants or conversion or exchange privileges
whether or not exercised;
provided that no such readjustment shall have the effect of increasing the
Purchase Price by an amount in excess of the amount of the reduction initially
made in respect of the issuance, sale, or grant of such rights, options,
warrants or conversion or exchange privileges.
(j) OTHER SECURITIES. In the event that at any time, as a result of
an adjustment made pursuant to this Section 4.1, each holder of Warrants
shall become entitled to purchase any Securities of the Company other than
shares of Common Stock, the number or amount of such other Securities so
purchasable and the Purchase Price of such Securities shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions contained in Section 4.1 (a) through
Section 4.1 (e), inclusive, hereof, and all other relevant provisions of
this Section 4. 1, and the definitions used in this Section 4. 1, that are
applicable to shares of Common Stock shall be applicable to such other
Securities.
(k) NOTICE OF ADJUSTMENT. Whenever the number of shares of Common
Stock issuable upon the exercise of Warrants is adjusted or the Purchase
Price in
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respect thereof is adjusted, as herein provided, the Company shall
promptly give to each holder of Warrants notice of such adjustment or
adjustments and shall promptly deliver to each holder of Warrants a
certificate of the Company's chief financial officer setting forth:
(i) the number of shares of Common Stock issuable upon the
exercise of each Warrant and the Purchase Price of such shares after
such adjustment;
(ii) a brief statement of the facts requiring such adjustment;
and
(iii) the computation by which such adjustment was made.
So long as any Warrant is outstanding and an adjustment in respect of the
number of shares issuable upon the exercise of Warrants or the Purchase
Price in respect thereof shall have occurred in any fiscal year of the
Company, within ninety (90) days of the end of such fiscal year of the
Company, the Company shall deliver to each holder of Warrants a
certificate of independent certified public accountants of recognized
national standing selected by the Company (which may be the regular
auditors of the Company) setting forth
(A) the number of shares of Common Stock issuable upon the
exercise of each Warrant and the Purchase Price of such shares as of
the end of such fiscal year,
(B) a brief statement of the facts requiring each such
adjustment required to be made in such fiscal year and
(C) the computation by which each such adjustment was made.
(l) NOTICE OF CERTAIN EVENTS. Whenever the Company shall authorize
any Notice Event, the Company shall, not less than thirty (30) days prior
to the record date with respect to such event, give to each holder of
Warrants, notice of such event setting forth any change in the number of
shares of Common Stock the Company estimates will be issuable upon the
exercise of such holder's Warrants, the estimated Purchase Price of such
shares after any adjustment required to be made hereunder and a brief
statement of the facts requiring such adjustment and the computation by
which the Company expects such adjustment will be made.
"NOTICE EVENT" shall mean any of the following:
(i) any event that would require an adjustment pursuant to
this Section 4.1;
(ii) any distribution of cash or other Property in respect of
Common Stock (including, without limitation, a cash dividend payable
out of retained earnings);
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(iii) any consolidation, merger or sale, transfer or other
disposition of all or substantially all of the Property of the
Company, provided that, if as a result of the circumstances
concerning such consolidation, merger, sale, transfer or other
disposition, it shall be impossible for the Company to give the
thirty (30) days' prior notice referred to above, the Company shall
give such notice as far in advance of the record date in respect of
such consolidation, merger, sale, transfer or other disposition as
reasonably feasible and, in any case, no later than two (2) business
days prior to such record date; and
(iv) the liquidation, dissolution or winding up of the
Company.
The Company shall, not less than thirty (30) days prior to the issuance of
any Preferred Stock, give to each holder of Warrants notice of such
issuance setting forth any change in the number of shares of Common Stock
the Company estimates will be issuable upon the exercise of such holder's
Warrants, the estimated Purchase Price of such shares after any adjustment
required to be made hereunder and a brief statement of the facts requiring
such adjustment and the computation by which the Company expects such
adjustment will be made.
4.2 FRACTIONAL SHARES.
The Company shall not be required to issue fractional shares of Common
Stock upon the exercise of any Warrant. Upon the exercise of any Warrant, there
shall be paid to the holder thereof, in lieu of any fractional share of Common
Stock resulting therefrom, an amount of cash equal to the product of:
(a) the fractional amount of such share; multiplied by
(b) the Market Price with respect to the Common Stock determined as
of the date of exercise of such Warrant.
4.3 SPECIAL AGREEMENTS OF THE COMPANY.
The Company covenants and agrees that:
(a) The Company shall not, by amendment to the Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of Securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Company, but shall at all times in good faith assist in the carrying
out of all the provisions of this Section 4 and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights
of the holders of the Warrant Certificates against dilution or other
impairment.
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(b) Before taking any action that would result in an adjustment to
the then current Purchase Price to a price that would be below the then
current par value of Common Stock issuable upon exercise of any Warrant,
the Company will take or cause to be taken any and all necessary corporate
or other action that may be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common
Stock upon payment of such Purchase Price as so adjusted.
5. INTERPRETATION OF THIS AGREEMENT
5.1 TERMS DEFINED.
ADJUSTED OUTSTANDING COMMON STOCK -- means, at any time, the number
of shares of Common Stock outstanding at such time (excluding all shares
constituting "treasury stock" and all shares held or beneficially owned by
a Subsidiary) together with the number of shares of additional Common
Stock that would be outstanding at such time assuming:
(a) the conversion immediately prior to such time of all then
Outstanding Securities that are convertible into shares of Common
Stock or that are issuable upon exercise of any warrants, options
and other rights, whether or not the conditions for such conversion
or exercise then exist, provided that no such Securities shall be
included in this clause (a) unless such Securities were issued and
outstanding on the date hereof or are derived through transfers
and/or exchanges from Securities that were issued and outstanding on
the date hereof; and
(b) the exercise immediately prior to such time of all then
outstanding warrants, options and similar rights to acquire shares
of Common Stock (including, without limitation, the Warrants),
whether or not the conditions for such exercise then exist, provided
that no such warrants, options and similar rights shall be included
in this clause (b) unless they were issued and outstanding on the
date hereof or are derived through transfers and/or exchanges from
Securities that were issued and outstanding on the date hereof.
ADJUSTMENT DATE -- Section 4.1(d)(i) hereof.
AGGREGATE CONSIDERATION RECEIVABLE -- Section 4.1 (d)(iv) hereof.
AGREEMENT -- introductory paragraph hereof.
APPRAISER -- means and includes one or more nationally recognized
investment banking firms or appraisers that shall be experienced in
evaluating companies in the same or similar lines of business as the
Company and the Subsidiaries.
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BOARD OF DIRECTORS -- means, at any time, the board of directors of
the Company or any committee thereof that, in the instance, shall have the
lawful power to exercise the power and authority of such board of
directors.
CERTIFICATE OF INCORPORATION -- means the restated certificate of
incorporation of the Company, as may be amended by the Company from time
to time after the Effective Date.
COMMON STOCK - means:
(a) on the date hereof, the Company's $0.001 par value capital
stock designated as "Common Stock"; and
(b) on any other date, any capital stock into which such
"Common Stock shall have been changed or any capital stock resulting
from any reclassification of such "Common Stock", and all other
capital stock of any class or classes (however designated) of the
Company the holders of which have the right, without limitation as
to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends
and distributions of any shares thereof entitled to preference.
COMPANY -- introductory paragraph hereof.
EFFECTIVE DATE -- means the date of the first issuance of any
Warrants pursuant to this Agreement.
EXCLUDED SECURITIES -- Section 4.1 (d)(ii) hereof.
FAIR MARKET SHARE PRICE - means, at any time, the sale value of a
single share of Common Stock, as determined by an Appraiser in accordance
with the provisions of Exhibit B attached hereto.
FULLY DILUTED OUTSTANDING COMMON STOCK -- means, at any time, the
number of shares of Common Stock outstanding at such time (excluding all
shares constituting "treasury stock" and all shares held or beneficially
owned by a Subsidiary) together with the number of shares of additional
Common Stock that would be outstanding at such time assuming:
(a) the conversion immediately prior to such time of all
Securities convertible into shares of Common Stock outstanding at
such time or issuable upon exercise of any warrants, options and
other rights outstanding at such time, whether or not the conditions
for such conversion or exercise then exist; and
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(b) the exercise immediately prior to such time of all then
outstanding warrants, options and similar rights to acquire shares
of Common Stock (including, without limitation, the Warrants),
whether or not the conditions for such exercise then exist.
HOLDER - introductory paragraph hereof.
INITIAL PURCHASE PRICE -- means Fifty-Nine and Three Eighths Cents
($0.59375) per share.
MARKET PRICE -- means, with respect to any date and any class of
Common Stock, the per share price of such class equal to the product of
(a) ninety-five percent (95%) times (b) the average of the daily Closing
Prices of Common Stock for fifteen (15) consecutive trading days
commencing twenty (20) trading days before-such date, provided that, if
the Closing Prices referred to in clause (b) are not then available for
such class of Common Stock in order to make the determination in said
clause (b), "MARKET PRICE" shall mean the Fair Market Share Price.
As used in this definition,
Closing Price -- means, with respect to any date and any class
of Common Stock, the per share price of such class determined as
follows:
(a) the last sale price, regular way, on such date or,
if no such sale takes place on such date, the average of the
closing bid and asked prices on such date, in each case as
officially reported on the principal national securities
exchange on which such class of Common Stock is then listed or
admitted to trading; or
(b) if such class of Common Stock is not then listed or
admitted to trading on any national securities exchange, but
is designated as a national market system security by the
National Association of Securities Dealers, the last trading
price of such class of Common Stock on such date, or if there
shall have been no trading on such date or if such class of
Common Stock is not so designated, the average of the reported
closing bid and asked prices on such date as shown by the
NASDAQ.
NASDAQ -- means the National Association of Securities Dealers
Automated Quotation System.
NOTICE EVENT -- Section 4.1(1) hereof.
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PERSON -- means an individual, partnership, corporation, limited
liability or other company or partnership, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
PREFERRED STOCK -- means the class of capital stock of the Company
designated as "Preferred Stock," having a par value $.001 per share, and
enjoying the rights and preferences set forth in, and subject to the
restrictions of, the Certificate of Incorporation as in effect on November
19, 1993.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
PURCHASE PRICE -- means, prior to any adjustment pursuant to Section
4.1 hereof, the Initial Purchase Price and thereafter, the Initial
Purchase Price as adjusted and readjusted from time to time.
REFERENCE PRICE -- means, in respect of any date, the Market Price
of one share of Common Stock as of such date.
REGULAR CASH DIVIDENDS -- means cash dividends paid by the Company
out of its retained earnings, provided that any such cash dividends paid
during any fiscal year of the Company shall be deemed to constitute
Regular Cash Dividends to the extent, and only to the extent, that
immediately after giving effect to the payment of such cash dividends the
aggregate amount of all cash dividends paid by the Company out of its
retained earnings during such fiscal year does not exceed five percent
(5%) of the product of (a) the Market Price determined as of the record
date in respect of such payment multiplied by (b) the aggregate number of
shares of Common Stock outstanding as of such record date (after assuming
that all then outstanding Warrants had been exercised).
REQUIRED WARRANTHOLDERS -- means, at any time, any holder or holders
(other than the Company, any Subsidiary or any Affiliate) then holding
more than fifty percent (50%) of the Warrants (excluding any Warrants
directly or indirectly held by the Company or any Subsidiary or Affiliate)
then outstanding.
SEC -- means, at any time, the Securities and Exchange Commission or
any other federal agency at such time administering the Securities Act.
SECURITIES ACT -- means the Securities Act of 1933, as amended.
SECURITY -- means "security" as defined in section 2(1 ) of the
Securities Act.
SENIOR FINANCIAL OFFICER -- means the chief financial officer, the
principal accounting officer, the controller or the treasurer of the
Company.
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SOP -- means the Company's 1990 Stock Option Plan (as amended, and
as may be amended from time to time, to and including November 19, 1993).
SUBSIDIARY -- means, at any time, any corporation more than fifty
percent (50%) of the total combined voting power of all classes of the
voting capital stock of which shall, at the time as of which any
determination is being made, be owned by the Company either directly or
indirectly through any one or more Subsidiaries.
TERMINATION DATE -- means May 19, 2002.
WARRANTS -- means the Original Warrants and the Additional Warrants.
WARRANT CERTIFICATE -- Section 1.1 hereof.
5.2 DIRECTLY OR INDIRECTLY.
Where any provision herein refers to action to be taken by any Person, or
that such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
5.3 SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION.
(a) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of the
Sections and the Table of Contents appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Agreement as a whole and not to any particular Section or other
subdivision. Unless otherwise specified, references to Sections are to
Sections of this Agreement, references to Annexes are to Annexes to this
Agreement and references to Exhibits are to Exhibits to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
5.4 GOVERNING LAW.
THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
6. MISCELLANEOUS
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6.1 COMMUNICATIONS.
(a) METHOD; ADDRESS. All communications hereunder or under the
Warrants shall be in writing, shall be hand delivered, deposited into the
United States mail (registered or certified mail), postage prepaid, or
sent by overnight courier of national or international reputation, and
shall be addressed,
(i) if to the Company,
The Cerplex Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to:
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
provided that the failure to provide any such copy shall
in no way affect the validity or effectiveness of any
communication to the Company for purposes of this
Agreement)
or at such other address as the Company shall have furnished in writing to
all holders of the Warrants at the time outstanding; and
(ii) if to any of the holders of the Warrants:
(A) if such holders are the Holders, at their respective
addresses set forth on Annex 1, and further including any parties
referred to on such Annex 1 that are required to receive notices in
addition to such holders of the Warrants; and
(B) if such holders are not the Holders, at their respective
addresses set forth in the register for the registration and
transfer of Warrants maintained pursuant to Section 1.2(b) hereof;
or to any such party at such other address as such party may designate by
notice duly given in accordance with this Section 6.1 to the Company
(which other address shall be entered in such register).
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(b) WHEN GIVEN. Any communication so addressed and deposited in the
United States mail, postage prepaid, by registered or certified mail (in
each case, with return receipt requested) shall be deemed to be received
on the third (3rd) succeeding business day after the day of such deposit
(not including the date of such deposit). Any notice so addressed and
otherwise delivered shall be deemed to be received when actually received
at the address of the addressee.
6.2 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Holder at the closing of the issuance
of Warrants (except the Warrant Certificates themselves) and (c) financial
statements, certificates and other information previously or hereafter furnished
to any Holder or any other holder of Warrants, may be reproduced by any holder
of Warrants by any photographic, photostatic, microfilm, micro-card, miniature
photographic, digital or other similar process and each holder of Warrants may
destroy any original document so reproduced. The Company agrees and stipulates
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not such reproduction was made by such holder of
Warrants in the regular course of business) and that any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence. Nothing in this Section 6.2 shall prohibit the Company or any holder
of Warrants from contesting the accuracy of any such reproduction.
6.3 SURVIVAL.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by it or on
its behalf hereunder shall be considered to have been relied upon by the Holders
and shall survive the delivery to the Holders of the Warrants regardless of any
investigation made by the Holders or on their behalf. All statements in any such
certificate or other instrument shall constitute warranties and representations
by the Company hereunder.
6.4 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Warrants,
and shall be enforceable by any such holder, whether or not an express
assignment to such holder of rights hereunder shall have been made by any
successor or assign of any Holder.
6.5 AMENDMENT AND WAIVER.
This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with and only with the written consent of the Company
and
27
31
the Required Warrantholders, provided that no change in, or waiver of
performance under, Section 1, Section 2, Section 4 or this Section 6.5 (or any
definition used in connection with any of such sections) shall be effected
without the written consent of all holders of Warrants.
6.6 RIGHT OF ACTION.
All rights of action in respect of the Warrants are vested in the
respective registered holders of the Warrant Certificates or, in lieu thereof,
the beneficial owner thereof (to the extent such beneficial owner is a party to
this Agreement or disclosed to the Company in writing), and any registered
holder or beneficial owner (to the extent such beneficial owner is a party to
this Agreement or disclosed to the Company in writing) of any Warrant
Certificate, without the consent of the holder of any other Warrant Certificate,
may, in its own behalf and for its own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, its right to exercise the Warrants evidenced by
such Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
6.7 EXPENSES.
The Company will promptly (and in any event within thirty (30) days of
receiving any statement or invoice therefor) pay all fees, expenses and costs
relating hereto, including, but not limited to:
(a) the cost of reproducing this Agreement and the Warrants;
(b) the fees and disbursements of the special counsel to the
Holders;
(c) the cost of delivering to the home office or custodian bank of
each Holder, insured to such party's satisfaction, the Warrant
Certificates acquired by such party on the Effective Date; and
(d) all fees, expenses, costs and disbursements (including, without
limitation, the reasonable fees and the disbursements of the attorneys,
accountants and other expert, legal and financial advisers of each holder
of Warrant Certificates) relating to (i) the consideration, evaluation,
analysis, assessment, negotiation, preparation and/or execution of any
amendments, waivers or consents pursuant to the provisions hereof, whether
in the ordinary course of performance hereof or in connection with any
controversy or potential controversy hereunder or resulting from any
work-out, restructuring or other similar proceedings relating to such
performance and whether or not any such amendments, waivers or consents
are executed or otherwise consummated and/or (ii) the enforcement of the
rights of such holder hereunder.
6.8 FILINGS.
28
32
The Company shall, at its own expense, promptly execute and deliver, or
cause to be executed and delivered, to any holder of Warrants all applications,
certificates, instruments, registration statements, and all other documents and
papers that such holder of Warrants may reasonably request in connection with
the obtaining of any consent, approval, registration, qualification, or
authorization of any federal, state or local government (or any agency or
commission thereof) necessary or appropriate in connection with, or for the
effective exercise of, any Warrants then held by such holder.
6.9 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.10 TERM.
All unexercised Warrants will be void and not exercisable after 5:00 p.m.
(Los Angeles, California time) on the Termination Date and the Warrant
Certificates in respect thereof shall after such time be deemed cancelled for
all purposes of this Agreement. Shares of Common Stock issuable upon the
exercise of a Warrant shall be issued after the Termination Date if such Warrant
is exercised, as provided in Section 2.1, on or prior to 5:00 p.m. (Los Angeles,
California time) on the Termination Date.
6.11 DUPLICATE ORIGINALS, EXECUTION IN COUNTERPART.
Two or more duplicate originals hereof may be signed by the parties, each
of which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement may be executed in one or more counterparts
and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts which, collectively, show
execution by each party hereto shall constitute one duplicate original.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; NEXT PAGE IS SIGNATURE PAGE.]
29
33
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by one of its duly authorized officers or
representatives.
THE CERPLEX GROUP, INC.
By
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
By
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT,
AS A LENDER
By
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
By
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.
By
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-1 Amended and Restated Warrant Agreement
34
ANNEX 1
INFORMATION AS TO HOLDERS
=================================================================================
HOLDER NAME ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
---------------------------------------------------------------------------------
Name in which to register ▇▇▇▇▇ Fargo Bank, National Association
Warrant Certificate(s)
---------------------------------------------------------------------------------
Warrant Certificate WR-[8];
registration numbers;
Number of Warrants 218,750 Warrants
---------------------------------------------------------------------------------
Address for notices ▇▇▇▇▇ Fargo Bank, National Association
Attention:
Facsimile:
=================================================================================
Annex 1-1
35
======================================================================
HOLDER NAME BHF-BANK AKTIENGESELLSCHAFT
----------------------------------------------------------------------
Name in which to register BHF-Bank Aktiengesellschaft
Note(s)
----------------------------------------------------------------------
Warrant Certificate WR-[9]
registration numbers;
Number of Warrants 218,750 Warrants
----------------------------------------------------------------------
Address for notices BHF-Bank Aktiengesellschaft
Attention:
Facsimile:
======================================================================
Annex 1-2
36
======================================================================
HOLDER NAME CITIBANK, N.A.
----------------------------------------------------------------------
Name in which to register Citibank, N.A.
Note(s)
----------------------------------------------------------------------
Warrant Certificate WR-[10]
registration number; 437,500 Warrants
Number of Warrants
----------------------------------------------------------------------
Address for notices Citibank, N.A.
Attention:
Facsimile:
======================================================================
Annex 1-3
37
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. THESE
SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN ANY
TRANSACTION UNLESS FIRST REGISTERED UNDER SUCH LAWS OR UNLESS SUCH TRANSACTION
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.
THE HOLDER OF THIS WARRANT CERTIFICATE IS A BANK FOR PURPOSES OF THAT CERTAIN
REGISTRATION RIGHTS AGREEMENT, DATED NOVEMBER 19, 1993, AS AMENDED, AMONG THE
CERPLEX GROUP, INC. AND THE OTHER PARTIES THERETO.
WARRANT CERTIFICATE
THE CERPLEX GROUP, INC.
No. WR-________ ___________ Warrants
Date: _____________ PPN: ___________________
This WARRANT CERTIFICATE certifies that ______________________, or
registered assigns; is the registered holder of ____________________
(___________) Warrants. Each Warrant entitles the owner thereof to purchase, at
any time on or after the Effective Date (as such term is defined in the Warrant
Agreement referred to below) and prior to 5:00 p.m. (Los Angeles, California
time) on the Termination Date (as such term is defined in the Warrant Agreement
referred to below), one fully paid and nonassessable share of Common Stock (as
such term is defined in the Warrant Agreement referred to below) of THE CERPLEX
GROUP, INC., a Delaware corporation (the "COMPANY"), at an initial purchase
price of Fifty-Nine and Three Eighths Cents ($0.59375) per share of Common Stock
(the "PURCHASE PRICE") upon (i) presentation and surrender of this Warrant
Certificate with a form of election to purchase duly executed and (ii)
satisfaction of the Purchase Price in the manner set forth in the Warrant
Agreement. The number of shares of Common Stock that may be purchased upon
exercise of each Warrant, and the Purchase Price, are the number and the
Purchase Price as of the date hereof and are subject to adjustment under certain
circumstances as provided in the Warrant Agreement referred to below.
The Warrants are issued pursuant to the Warrant Agreement, dated as of
April 15, 1996, as amended and restated as of April 9, 1997 (as further amended
from time to time, the "WARRANT AGREEMENT"), among the Company and certain
initial holders named therein, and are subject to all of the terms, provisions
and conditions thereof, which
Exhibit A-1
38
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, obligations, duties and immunities of the Company and
the holders of the Warrant Certificates. Capitalized terms used, but not
defined, herein have the meanings assigned to then, in the Warrant Agreement.
This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time. If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of Warrants not exercised. This Warrant Certificate, with or without
other Warrant Certificates, upon surrender at the office of the Company referred
to in Section 1.2(b) of the Warrant Agreement, may be exchanged for another
Warrant Certificate or Warrant Certificates of like tenor evidencing Warrants
entitling the holder to purchase a like aggregate number of shares of Common
Stock as the Warrants evidenced by the Warrant Certificate or Warrant
Certificates surrendered shall have entitled such holder to purchase.
Except as expressly set forth in the Warrant Agreement, no holder of this
Warrant Certificate shall be entitled to any right to vote or receive dividends
or be deemed for any purpose the holder of shares of Common Stock or of any
other Securities of the Company that may at any time be issued upon the exercise
hereof, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
holder of a share of Common Stock in the Company or any right to vote upon any
matter submitted to holders of shares of Common Stock at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of Securities, change of
par value, consolidation, merger, conveyance, or otherwise) or, except as
provided in the Warrant Agreement, to receive notice of meetings, or to receive
dividends or subscription rights, or otherwise, until the Warrant or Warrants
evidenced by this Warrant Certificate shall have been exercised as provided in
the Warrant Agreement.
Other than with respect to the original issuance of the Warrants pursuant
to the Warrant Agreement, if the Warrant Certificate of the immediate transferor
of the holder of this Warrant Certificate bore the second paragraph of the
legend set forth above, this Warrant Certificate shall also bear such second
paragraph.
THIS WARRANT CERTIFICATE AND THE WARRANT AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
Exhibit A-2
39
WITNESS the signature of a proper officer of the Company as of the date
first above written.
THE CERPLEX GROUP, INC.,
By ____________________________
Name:
Title:
ATTEST:
----------------------------
[Assistant] Secretary
Exhibit A-3
40
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee.)
the accompanying Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint:
_______________________________________________________________________________
attorney in fact, to transfer the accompanying Warrant Certificate on the books
of the Company, with full power of substitution.
Dated: _______________, _______.
________________________________
By _____________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.
Exhibit A-4
41
[FORM OF ELECTION TO PURCHASE]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER DESIRES
TO EXERCISE ANY WARRANTS REPRESENTED BY THE WARRANT CERTIFICATE)
To THE CERPLEX GROUP, INC.:
The undersigned hereby irrevocably elects to exercise ___________________
Warrants represented by the accompanying Warrant Certificate to purchase the
shares of Common Stock issuable upon the exercise of such Warrants and requests
that certificates for such shares be issued in the name of:
_______________________________________________________________________________
(Please print name and address.)
_______________________________________________________________________________
(Please insert social security or other identifying number.)
If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:
_______________________________________________________________________________
(Please print name and address.)
_______________________________________________________________________________
(Please insert social security or other identifying number.)
Dated: ________________, ____.
_____________________________
By __________________________
NOTICE
The signature to the foregoing Election to Purchase must correspond to the
name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.
Exhibit A-5
42
EXHIBIT B
DETERMINATION OF FAIR MARKET SHARE PRICE.
(a) Within two (2) days of the happening of any event requiring a
determination of the Fair Market Share Price, the Company shall give written
notice thereof to each holder of Warrants (which notice shall contain a
description of such event).
(b) Within ten (10) days of the happening of each event requiring a
determination of the Fair Market Share Price, each of the Required
Warrantholders (as a group) and the Company shall designate an Appraiser for
purposes of determining the Fair Market Share Price and shall notify the other
party or parties of such designation (provided that, if the Company and such
holders so agree, they may jointly designate a single Appraiser, in which event
the determination of the Fair Market Share Price of the single Appraiser so
jointly designated shall be binding upon both the Company and the holders of
Warrants for the purposes of the determination of the Fair Market Share Price
hereunder). Each Appraiser will take such evidence, make such investigations and
examine such documents as it shall in its discretion determine to be necessary
and advisable to make a determination with respect to the Fair Market Share
Price. A detailed report from each Appraiser setting forth such Appraiser's
determination with respect to the Fair Market Share Price shall be delivered to
the Company and to each of the holders of Warrants as soon as possible following
such determination and, in any event, not later than thirty (30) days following
the happening of the event requiring determination of the Fair Market Share
Price.
(c) If either:
(i) the Company or such holders shall fail, neglect or refuse to
designate an Appraiser within the time period set forth in clause (b)
above; or
(ii) either of the two Appraisers so designated shall fail to
deliver its detailed report within the time period set forth in said
clause (b);
then, in each such case, the determination of the Fair Market Share Price of the
single Appraiser actually designated or the single Appraiser actually delivering
its detailed report, as the case may be, shall be binding upon both the Company
and the holders of Warrants for the purposes of the determination of the Fair
Market Share Price hereunder.
(d) If the determinations of the Fair Market Share Price by both such
Appraisers do not differ by more than fifteen percent (15%) of the lower of the
two determinations, then the Fair Market Share Price shall be the arithmetic
average of those two determinations.
Exhibit B-1
43
(e) If the determinations of the Fair Market Share Price by both such
Appraisers differ by more than fifteen percent (15%) of the lower of the two
determinations, then the parties shall promptly direct the two Appraisers to
consult with one another for the purpose of jointly designating a third
Appraiser, which designation shall be made not later than ten (10) days
following the delivery of the determinations pursuant to clause (b) above. The
third Appraiser shall review the first two appraisals and shall make an
independent determination with respect to the Fair Market Share Price.
(i) In the event that the third Appraiser's determination is equal
to or greater than the greater determination made by the first two
Appraisers, the Fair Market Share Price shall equal the higher of the
determinations of the first two Appraisers.
(ii) In the event that the third Appraiser's determination is equal
to or less than the lesser determination made by the first two Appraisers,
the Fair Market Share Price shall equal the lesser of the determinations
of the first two Appraisers.
(iii) In the event that the third Appraiser's determination is
between those of the first two Appraisers, the Fair Market Share Price
shall equal the arithmetic average of the determinations of all three
Appraisers.
A detailed report from the third Appraiser setting forth such Appraiser's
determination with respect to the Fair Market Share Price shall be delivered to
the Company and to each of the holders of Warrants as soon as possible following
such determination and, in any event, not later than thirty (30) days following
the earlier of (A) the delivery of the reports referred to in clause (b) above,
and (B) the first date upon which such reports are due to be delivered pursuant
to clause (b) above.
(f) The Company agrees to cooperate with each Appraiser to the full extent
necessary to permit determination of the Fair Market Share Price.
(g) All fees and expenses incurred in connection with the foregoing
determination of the Fair Market Share Price (including any and all fees and
expenses of each Appraiser) shall be borne by the Company. Any determination
made in accordance with this definition shall be effective for a period of
ninety (90) days immediately following such determination, unless there has been
a material development in the business of the Company and the Subsidiaries, in
which case there shall be a redetermination in accordance with the provisions of
this Exhibit.
Exhibit B-2
44
EXHIBIT C
CONFIDENTIALITY
With respect to all data and information that has been or in the future is
furnished to or obtained by any holder of Warrant Certificates in connection
with this Agreement (excluding, in any case, any such data and information that
was or is available to the public or was not or is not treated as confidential
by any one or more of the Company, the Subsidiaries or the Affiliates), such
holder will hold such data and information in confidence in accordance with the
customary practices and standards of confidentiality generally employed by such
holder in respect of similar data and information obtained in connection with
other comparable investment transactions of such holder. Notwithstanding the
foregoing, any such holder may disclose any data and information furnished to or
obtained by it in connection with this Agreement:
(a) the disclosure of which is, in such holder's sole good faith
business and/or legal judgment, reasonably required in connection with
regulatory requirements (including, without limitation, the requirements
of the National Association of Insurance Commissioners but excluding, in
any case, delivery of periodic financial statements and information to the
National Association of Insurance Commissioners, the Securities Valuation
Office thereof or any other agency thereof in connection with the rating,
evaluation or other regulatory treatment of the Warrants or the Notes) or
other legal requirements related to such holder's affairs, including,
without limitation, the disclosure of such data and information in
connection with or in response to (i) compliance with any law, ordinance
or governmental order, regulation, rule, policy, subpoena, investigation
or request, or (ii) any order, decree, judgment, subpoena, notice of
discovery or similar ruling, or pleading issued, filed, served or
purported on its face to be issued, filed or served (A) by or under
authority of any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity or (B) in
connection with any proceeding (including, without limitation, any
proceeding to enforce the obligations of the Company under this
Agreement), cause or matter pending (or on its face purported to be
pending) before any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity;
(b) to any one or more of the employees, officers, directors,
agents, attorneys, accountants, professional consultants or trustees of
such holder (or of any subsidiary or affiliate of such holder) who would
have access to such data and information in the normal course of the
performance of such Person's duties for such holder (or for such
subsidiary or affiliate);
(c) to ▇▇▇▇▇'▇ Investors Service, Inc., Standard & Poor's
Corporation or any other nationally recognized financial rating service
that is reviewing the credit rating of any holder of Warrant Certificates
or is rating or reviewing the
Exhibit C-1
45
rating of the Warrants or the Common Stock issuable upon the exercise
thereof; and
(d) to any prospective purchaser, securities broker or dealer or
investment banker in connection with the resale or proposed resale, in
accordance with the terms hereof, of all or any portion of the Warrants or
Common Stock issuable upon the exercise thereof by such holder.
In connection with any disclosure by any holder of Warrant Certificates under
clause (a) above, such holder will use reasonable efforts to notify the Company
of any such pending disclosure, provided that (x) such holder shall in no case
be liable to the Company for its failure to effect such notification, (y) the
failure to effect such notification shall not affect the ability of such holder
to make the disclosures contemplated under said clause (a) and (z) this sentence
shall not apply to the delivery of periodic financial statements and information
to the National Association of Insurance Commissioners, the Securities Valuation
Office thereof or any other agency thereof in connection with the rating,
evaluation or other regulatory treatment of the Warrants or the Notes. In
connection with any disclosure by any holder of Warrant Certificates under
clause (d) above, such holder will use reasonable efforts to cause any
prospective purchaser, securities broker or dealer or investment banker referred
to in said clause (d) to enter into a written confidentiality agreement with the
Company containing terms of confidentiality substantially similar to the terms
of confidentiality set forth in this Exhibit prior to effecting such disclosure,
provided that (yy) such holder shall in no case be liable to the Company if such
prospective purchaser, securities broker or dealer or investment banker shall
for any reason not enter into any such confidentiality agreement with the
Company and (zz) the failure of such prospective purchaser, securities broker or
dealer or investment banker to enter into any such confidentiality agreement
with the Company shall not affect the ability of such holder to make the
disclosures contemplated under said clause (d). No holder of Warrant
Certificates will be liable for the breach of the provisions of this Exhibit or
of any provision in any aforesaid confidentiality agreement by any other holder
of Warrant Certificates or by any Person to which any confidential data or
information shall be delivered in accordance with the provisions of this Exhibit
C.
Exhibit C-2