Exhibit 4.2
WARRANT AGREEMENT
RELATING TO THE ISSUANCE OF THE
COMMON STOCK PURCHASE WARRANTS
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ CORPORATION
Dated as of June 18, 1999
SECTION 1. APPOINTMENT OF WARRANT AGENT 1
SECTION 2. FORM OF WARRANTS 1
2.1 Form of Warrant Certificates 1
2.2 Countersignature of Warrant Certificates 2
2.3 Registration 2
SECTION 3. TRANSFER OR EXCHANGE OF WARRANTS 2
3.1 Transfer 2
3.2 Exchange of Warrant Certificates 2
SECTION 4. [SECTION 4 INTENTIONALLY LEFT BLANK] 3
SECTION 5. MUTILATED OR MISSING WARRANTS 3
SECTION 6. TERM OF WARRANTS; EXERCISE OF WARRANTS 3
6.1 Term of Warrants 3
6.2 Exercise of Warrants 3
6.3 Payment of Exercise Price 4
SECTION 7. DISPOSITION OF PROCEEDS ON EXERCISE OF
WARRANTS 4
SECTION 8. PAYMENT OF TAXES 4
SECTION 9. RESERVATION OF WARRANT SHARES; PURCHASE AND
CANCELLATION OF WARRANTS 5
9.1 Reservation of Warrant Shares 5
9.2 Governmental Approvals and Listings 5
9.3 Purchase of Warrants by the Company 5
9.4 Cancellation of Warrants 5
SECTION 10. EXERCISE PRICE 6
SECTION 11. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT SHARES 6
11.1 Adjustments 6
(a) Stock Dividends, Splits, etc. 6
(b) Distributions of Assets 6
(c) Computation of Market Price 7
(d) Minimum Adjustment 7
(e) Warrant Share Adjustment 7
(f) Notice of Adjustment 8
(g) Definition of Common Stock 8
(h) Company May Reduce Exercise Price or Increase
Number of Warrant Shares Purchasable 8
(i) Subsequently Issued Warrants 9
(j) Number of Warrant Shares on Warrant
Certificates 9
11.2 No Adjustment for Dividends 9
11.3 Preservation of Purchase Rights and
Adjustment of Exercise Price upon Merger,
Consolidation, etc. 9
SECTION 12. NO RIGHTS AS STOCKHOLDERS 10
SECTION 13. FRACTIONAL SHARES OF COMMON STOCK 10
SECTION 14. RIGHT OF ACTION 10
SECTION 15. INSPECTION OF WARRANT AGREEMENT 10
SECTION 16. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
WARRANT AGENT 11
SECTION 17. CONCERNING THE WARRANT AGENT 11
17.1 Disclaimer of Representations 11
17.2 No Responsibility for Failure of Company's
Covenants 11
17.3 Delegation 11
17.4 Opinion of Counsel 12
17.5 Officer's Certificate 12
17.6 Compensation, Reimbursement and
Indemnification 12
17.7 No Action Without Assurance of Reimbursement 12
17.8 Conflicts of Interest 13
17.9 Solely as Agent 13
17.10 Reliance on Documents 13
17.11 No Representation Regarding Validity, Etc. 13
17.12 Instructions from Company 13
17.13 Warrant Agent Not Required to Expend Funds 13
SECTION 18. CHANGE OF WARRANT AGENT 14
SECTION 19. IDENTITY OF TRANSFER AGENT 14
SECTION 20. NOTICES 14
SECTION 21. SUPPLEMENTS AND AMENDMENTS 15
SECTION 22. SUCCESSORS 15
SECTION 23. MERGER OR CONSOLIDATION OF THE COMPANY 15
SECTION 24. APPLICABLE LAW 16
SECTION 25. BENEFITS OF THIS AGREEMENT 16
SECTION 26. COUNTERPARTS 16
SECTION 27. CAPTIONS 16
Warrant Agreement
WARRANT AGREEMENT dated as of June 18, 1999, between
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ CORPORATION, a Delaware corporation (the
"Company"), and THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ CORPORATION, in its
capacity as Warrant Agent (the "Warrant Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue up to 1,400,000
Common Stock Purchase Warrants (the "Warrants") to purchase
Common Stock, par value $0.01 per share (the "Common Stock"), as
part of the purchase price for certain stock of the MARC Analysis
Research Corporation to be acquired by the Company, each Warrant
entitling the registered owner thereof to purchase one share of
Common Stock (each share of Common Stock purchasable upon the
exercise of a Warrant being referred to herein as a "Warrant
Share"); and
WHEREAS, the Company wishes the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to act,
in connection with the issuance, transfer, exchange and exercise
of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and
for the purpose of defining the terms and provisions of the
Warrants and the respective rights and obligations thereunder of
the Company and the registered owners of the Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as
follows:
SECTION 1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as
agent for the Company in accordance with the terms and conditions
hereinafter set forth, and the Warrant Agent hereby accepts such
appointment.
SECTION 2. Form of Warrants.
2.1 Form of Warrant Certificates. The text of the
Warrant certificate and of the form of election to purchase
Warrant Shares shall be substantially as set forth in Exhibit A
attached hereto. The Warrant certificates shall be appropriately
printed, lithographed or engraved and may have such letters,
numbers, other marks of identification, or legends as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The price per
Warrant Share and the number of Warrant Shares issuable upon
exercise of each Warrant are subject to adjustment upon the
occurrence of certain events, all as hereinafter provided.
The Warrant certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or one of
its Vice Presidents under its corporate seal reproduced thereon
and attested by its Secretary or an Assistant Secretary. The
signature of any of such officers on the Warrant certificates
may be manual or facsimile.
Warrant certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding
that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant
certificates or did not hold such office on the date of this
Agreement.
Warrant certificates shall be dated as of the date of
countersignature thereof by the Warrant Agent either upon initial
issuance or upon exchange, substitution or transfer.
2.2 Countersignature of Warrant Certificates. The
Warrant certificates shall be manually countersigned by the
Warrant Agent (or any successor to the Warrant Agent then acting
as warrant agent under this Agreement) and shall not be valid for
any purpose unless so countersigned. Warrant certificates may be
countersigned by the Warrant Agent (or by its successor as
warrant agent hereunder) and may be delivered by the Warrant
Agent notwithstanding that the persons whose manual or facsimile
signatures appear thereon as proper officers of the Company shall
have ceased to be such officers at the time of such
countersignature, issuance or delivery. The Warrant Agent shall,
upon written instructions of the Chairman of the Board, the
President, any Vice President or the Secretary of the Company,
countersign, issue and deliver Warrant certificates entitling the
Holders thereof to purchase in the aggregate Warrant Shares
(subject to adjustment pursuant to Section 11 hereof) and shall
countersign and deliver Warrant certificates as otherwise
provided in this Agreement.
2.3 Registration. The Warrant certificates shall be
numbered and shall be registered in a register (the "Warrant
Register") as they are issued. The Company and the Warrant Agent
shall be entitled to treat the registered holder of any Warrant
as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to, or interest
in, such Warrant on the part of any other person, notwithstanding
any notice to the Company or the Warrant Agent to the contrary.
SECTION 3. Transfer or Exchange of Warrants.
3.1 Transfer. The Warrants shall be transferable
only in the books of the Company maintained at the office or
agency of the Warrant Agent designated for such purpose in the
City of Los Angeles upon delivery thereof duly endorsed by the
Holder or by his or her duly authorized attorney or legal
representative, or accompanied by proper evidence of succession,
assignment or authority to transfer, which endorsement shall be
guaranteed by a bank or trust company located in the United
States or a broker or dealer that is a member of a national
securities exchange. In all cases of transfer by an attorney,
the original power of attorney, duly approved, or an official
copy thereof, duly certified, shall be deposited and remain with
the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and
required to be deposited and remain with the Warrant Agent. Upon any
registration of transfer, the Warrant Agent shall countersign and
deliver a new Warrant certificate to the person entitled thereto.
3.2 Exchange of Warrant Certificates. Warrant
certificates may be exchanged for another certificate or
certificates entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the certificate or
certificates surrendered then entitle such Holder to purchase.
Any Holder desiring to exchange a Warrant certificate shall make
such request in writing delivered to the Warrant Agent, and shall
surrender, properly endorsed in the manner described in
subsection 3.1 hereof, the Warrant certificate or certificates
to be so exchanged. Thereupon, the Warrant Agent shall
countersign and deliver to the person entitled thereto a new
Warrant certificate or certificates, as the case may be, as so
requested.
SECTION 4. [Section 4 intentionally left blank].
SECTION 5. Mutilated or Missing Warrants.
In case any of the certificates evidencing the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may,
in its discretion, issue and the Warrant Agent shall countersign
and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant certificate, or in lieu of
and substitution for the Warrant certificate lost, stolen or
destroyed, a new Warrant certificate of like tenor and
representing an equivalent right or interest, but only, in case
of any such loss, theft or destruction, upon receipt of evidence
satisfactory to the Company and the Warrant Agent thereof and an
indemnity also satisfactory to them. An applicant for such
substitute Warrant certificate shall also comply with such other
reasonable regulations and pay such other reasonable charges as
the Company or the Warrant Agent may prescribe.
SECTION 6. Term of Warrants; Exercise of Warrants.
6.1 Term of Warrants. Subject to the terms of this
Agreement, each Holder shall have the right until 5:00 P.M., Los
Angeles time, on June 18, 2004 (the "Expiration Date"), to
purchase from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time
be entitled to purchase on exercise of such Warrants.
6.2 Exercise of Warrants. Warrant Shares may be
purchased upon surrender to the Company at the office or agency
of the Warrant Agent designated for such purpose in the City of
Los Angeles, of the certificate or certificates evidencing the
Warrants to be exercised, together with the form of election to
purchase on the reverse thereof duly filled in and signed, which
signature shall, if the Warrant Shares are to be issued in the
name of a person other than the Holder of the Warrant, be
guaranteed by a bank or trust company located in the United
States or a broker or dealer that is a member of a national
securities exchange, and upon payment to the Warrant Agent
for the account of the Company of the Exercise Price (as defined
in and determined in accordance with the provisions of Sections
10 and 11 hereof) for the number of Warrant Shares in respect
of which such Warrants are then being exercised.
Subject to Section 8 hereof, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the
Company shall issue and cause to be delivered, with all
reasonable dispatch, to or upon the written order of the Holder
and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of such Warrants. Such
certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed
to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the
Exercise Price, as aforesaid; provided, however, that if such
Warrants are surrendered, and the Exercise Price is paid, on a
Saturday, Sunday or other day on which banking institutions in
the City of Los Angeles are authorized or obligated by law or
executive order to close, or on a day when the Common Stock
transfer books of the Company are closed, the certificates for
the Warrant Shares in respect of which such Warrants are then
exercised shall be issuable as of the next succeeding Monday,
Tuesday, Wednesday, Thursday or Friday on which such banking
institutions are not so authorized or obligated to close (whether
before or after the Expiration Date) and which is a day on which
the Common Stock transfer books of the Company are open. The
rights of purchase represented by the Warrants shall be
exercisable, at the election of the Holders thereof, either in
full or from time to time in part and, in the event that a
certificate evidencing Warrants is exercised in respect of less
than all of the Warrant Shares specified therein at any time
prior to the expiration of such Warrants, a new certificate
evidencing the remaining Warrant or Warrants will be issued, and
the Warrant Agent is hereby irrevocably authorized to countersign
and to deliver the required new Warrant certificates pursuant to
the provisions of this subsection and of subsection 2.2 hereof
and the Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrant certificates duly executed
on behalf of the Company for such purpose.
6.3 Payment of Exercise Price. Payment of the
aggregate Exercise Price shall be made by certified or cashier's
check, by presentment of any of the notes described below, or
by any combination thereof. Holders may present, as payment of
the aggregate Exercise Price, any note from those series of notes
issued by the Company pursuant to the Indenture dated as of June
17, 1999 among the Company and Chase Manhattan Bank & Trust
Company N.A., as trustee, known as 8% Subordinated Promissory
Notes due 2001 and 8% Subordinated Promissory Notes due 2009.
Holders surrendering such notes in payment of the Exercise Price
shall be fully credited for the unpaid principal value and
accrued but unpaid interest thereon toward the subject Exercise
Price, or portion thereof, as the case may be.
SECTION 7. Disposition of Proceeds on Exercise of
Warrants.
The Warrant Agent will promptly provide information to
the Company with respect to the Warrants exercised including the
name of the holder of Warrants exercised, the number of Warrants
exercised and the date of exercise, and concurrently pay to the
Company all moneys (or notes referred to in Section 6.3) received
by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants. Any such notes shall be
promptly delivered to the Company by the Warrant Agent.
SECTION 8. Payment of Taxes.
The Company will pay all documentary stamp taxes, if
any, attributable to the issuance of any Warrant certificates or
certificates for Warrant Shares issuable upon the exercise of
Warrants; provided, however, that the Company shall not be
required to pay, and the Holder shall pay, any tax or taxes that
may be payable in respect of any transfer involved in the issue
or delivery of any Warrant certificates or certificates for
Warrant Shares in a name other than that of the registered Holder
of the Warrants that were surrendered and the Company shall not
be required to issue or deliver such Warrant certificates or
certificates for Warrant Shares unless or until the persons
requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
SECTION 9. Reservation of Warrant Shares; Purchase
and Cancellation of Warrants.
9.1 Reservation of Warrant Shares. There have been
reserved, and the Company shall at all times keep reserved out
of its authorized Common Stock, a number of shares of Common
Stock sufficient to provide for the exercise of the right of
purchase represented by the outstanding Warrants. The Company
covenants that all Warrant Shares will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The
transfer agent for the Company's Common Stock (the "Transfer
Agent") and every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of any
of the rights of purchase aforesaid will be irrevocably
authorized and directed at all times to reserve such number of
authorized shares required for such purpose. The Company will
keep a copy of this Agreement on file with the Transfer Agent
for the Common Stock and with every subsequent transfer agent
for any shares of the Company's capital stock issuable upon
the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent stock
certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The
Company will supply such Transfer Agent with duly executed stock
certificates for such purpose. Promptly after the Expiration
Date, the Warrant Agent shall, upon the written request of the
Company, certify to the Company the aggregate number of Warrants
then outstanding and thereafter no shares shall be subject to
reservation in respect of such Warrants.
9.2 Governmental Approvals and Listings. The Company
will as promptly as practicable take all action which may be
necessary to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities,
and will make any and all filings under federal and state
securities laws, necessary in connection with the issuance,
distribution and transfer of Warrant certificates, the exercise
of the Warrants, and the issuance, sale, transfer and delivery of
Warrant Shares.
9.3 Purchase of Warrants by the Company. The Company
shall have the right, except as limited by law, other agreement
or herein, to purchase or otherwise acquire Warrants at such
times, in such manner and for such consideration as it may deem
appropriate.
9.4 Cancellation of Warrants. In the event the
Company shall purchase or otherwise acquire Warrants, the related
Warrant certificates shall thereupon be delivered by the Company
to the Warrant Agent together with instructions that such
certificates be cancelled by it and retired. The Warrant Agent
shall cancel any Warrant certificate surrendered for exchange,
substitution, transfer or exercise in whole or in part. Warrant
certificates cancelled by the Warrant Agent pursuant to any
provision of this Agreement shall be delivered to the Company or,
upon the request of the Warrant Agent and with the consent of the
Company, destroyed by the Warrant Agent. Upon the Company's
request, the Warrant Agent shall furnish to the Company written
confirmation of the destruction of the Warrant certificates so
cancelled.
SECTION 10. Exercise Price.
The price per share at which Warrant Shares shall be
purchasable upon exercise of each Warrant (the "Exercise Price")
shall be $10.00, subject to adjustment pursuant to Section 11
hereof.
SECTION 11. Adjustment of Exercise Price and Number
of Warrant Shares.
11.1 Adjustments. The number and kind of securities
purchasable upon the exercise of each Warrant and the Exercise
Price shall be subject to adjustment as follows:
(a) Stock Dividends, Splits, etc. In case the Company
shall at any time after the date of this Agreement (w) pay a
dividend or make a distribution on its Common Stock which is
paid or made (A) in Common Stock or other shares of the
Company's capital stock or (B) in rights or warrants to
purchase Common Stock or other capital stock of the Company
if such rights or warrants are not exercisable or separable
from the Common Stock except upon the occurrence of a
contingency, (x) subdivide its outstanding Common Stock
into a greater number of shares of Common Stock, (y) combine
its outstanding shares into a smaller number of shares of
Common Stock or (z) issue by reclassification of its
Common Stock other securities of the Company, then, in any
such event the number of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be
entitled to receive upon exercise of such Warrant the kind
and number of shares of the Company and rights to purchase
Common Stock or other securities of the Company (or, in the
event of the redemption of any such rights, any cash paid in
respect of such redemption) that he, she or it would have
owned or been entitled to receive after the happening of any
of the events described above had such Warrant been
exercised immediately prior to the happening of such event
or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective
immediately after the opening of business on the next
business day following the record date in the case of
dividends or other distributions and shall become effective
immediately after the opening of business on the next
business day following the effective date in the case of a
subdivision or combination.
(b) Distributions of Assets. In case the Company
shall at any time after the date of this Agreement
distribute to all holders of its Common Stock evidences
of indebtedness of the Company or assets of the Company
(including cash dividends or distributions out of retained
earnings other than cash dividends or distributions made
on a quarterly or other periodic basis) or warrants to
subscribe for securities of the Company (excluding those
referred to in paragraph (a) above), then in each case the
Exercise Price shall be adjusted to a price determined by
multiplying the Exercise Price in effect immediately prior
to such distribution by a fraction, of which the numerator
shall be the then current Market Price (as defined in
paragraph (c) below) per share of Common Stock on the record
date for determination of shareholders entitled to receive
such distribution, less the then fair value (as determined
in good faith by the Board of Directors of the Company,
whose determination shall be conclusive and notice of which
shall be provided to Warrant Agent) of the portion of the
assets or evidences of indebtedness so distributed or of
such subscription rights or warrants which are applicable
to one share of Common Stock, and of which the denominator
shall be such Market Price per share of Common Stock;
provided, however, that if the then current Market Price
per share of Common Stock on the record date for
determination of shareholders entitled to receive such
distribution is less than the then fair value of the portion
of the assets or evidences of indebtedness so distributed
or of such subscription rights or warrants which are
applicable to one share of Common Stock, the foregoing
adjustment of the Exercise Price shall not be made and in
lieu thereof the Holder of each Warrant shall be entitled
to receive upon exercise of such Warrant in addition to the
Common Stock the kind and number of assets, evidences of
indebtedness, subscription rights and warrants (or, in the
event of the redemption of any such evidences of
indebtedness, subscription rights and warrants, any cash
paid in respect of such redemption) that he or she would
have owned or have been entitled to receive after the
happening of such distribution had such Warrant been
exercised immediately prior to the record date for such
distribution. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that
such distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would then
be in effect if such record date had not been fixed.
(c) Computation of Market Price. For the purpose of
any computation under this Agreement, the current Market
Price per share of Common Stock at any date shall be deemed
to be the average of the daily closing price per share for
the 15 consecutive Trading Days (as defined below)
commencing 30 Trading Days before the date in question.
"Market Price" is defined as the closing price for the
Common Stock on the New York Stock Exchange. If Market
Price cannot be established as described above, Market
Price shall be the fair market value of the Common
Stock as determined in good faith by the Board of Directors.
"Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Stock is
listed or admitted to trading is open for the transaction
of business.
(d) Minimum Adjustment. No adjustment in the number
of Warrant Shares purchasable hereunder or the Exercise
Price shall be required unless such adjustment would require
an increase or decrease of at least 1.0% in the number of
Warrant Shares purchasable upon the exercise of each
Warrant, or the Exercise Price, as the case may be; provided,
however, that any adjustments which by reason of this
paragraph (d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the
nearest cent or the nearest ten-thousandth of a share, as
the case may be.
(e) Warrant Share Adjustment. Upon each adjustment of
the Exercise Price as a result of the calculations made in
paragraph (a) or (b) above, each Warrant outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares (calculated to the
nearest ten-thousandth) obtained by (A) multiplying (x)
the number of shares covered by a Warrant immediately prior
to such adjustment of the Exercise Price by (y) the Exercise
Price in effect immediately prior to such adjustment of the
Exercise Price and (ii) dividing the product so obtained by
the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(f) Notice of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of Warrants
or the Exercise Price of such Warrant Shares is adjusted,
as herein provided, the Company shall cause the Warrant
Agent promptly to mail by first class mail, postage prepaid,
to each Holder of a Warrant or Warrants notice of such
adjustment or adjustments and shall deliver to the Warrant
Agent a certificate of a firm of independent public
accountants selected by the Board of Directors of the
Company (who may be the regular accountants employed by
the Company) setting forth (A) the number of Warrant Shares
purchasable upon the exercise of each Warrant and the
Exercise Price of such Warrant Shares after such adjustment,
(B) a brief statement of the facts requiring such adjustment
and (C) the computation by which such adjustment was made.
Such certificate shall be conclusive evidence of the
correctness of such adjustment. The Warrant Agent shall be
entitled to rely on such certificate and shall be under no
duty or responsibility with respect to any such certificate,
except to exhibit the same, from time to time, to any Holder
desiring an inspection thereof during reasonable business
hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holders to determine whether
any facts exist that may require any adjustment of the
Exercise Price or the number of Warrant Shares or other
stock or property purchasable upon exercise thereof or with
respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such
adjustment.
(g) Definition of Common Stock. For the purpose of
this subsection 11.1, the term "Common Stock" shall mean (A)
the class of stock designated as the Common Stock of the
Company at the date of this Agreement or (B) any other class
of stock resulting from successive changes or
reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value or
from no par value to par value. In the event that at any
time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders of a Warrant or Warrants
shall become entitled to purchase any securities of the
Company other than Common Stock, thereafter the number of
such other securities so purchasable upon exercise of each
Warrant and the Exercise 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
with respect to the Warrant Shares contained in this
subsection 11.1 and the provisions of Section 6
and subsections 11.2 and 11.3, inclusive, with respect to
the Warrant Shares, shall apply on like terms to any such
other securities.
(h) Company May Reduce Exercise Price or Increase
Number of Warrant Shares Purchasable. The Company may, at
its option, at any time during the term of the Warrants,
reduce the then current Exercise Price, or increase the
number of Common Shares purchasable upon exercise of each
Warrant, to any amount deemed appropriate by the Board of
Directors of the Company.
(i) Subsequently Issued Warrants. All Warrants
originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise
Price, the number of shares of Common Stock purchasable from
time to time hereunder upon exercise of the Warrants, all
subject to further adjustment as provided herein.
(j) Number of Warrant Shares on Warrant Certificates.
Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Common Stock issuable upon
the exercise of the Warrants, the Warrant certificates
theretofore and thereafter issued may continue to express
the Exercise Price per share and the number of shares which
were expressed upon the initial Warrant certificates issued
hereunder.
11.2 No Adjustment for Dividends. Except as provided in
subsection 11.1, no adjustment in respect of any dividends made
on a quarterly or other periodic basis out of retained earnings
shall be made during the term of a Warrant or upon the exercise
of a Warrant.
11.3 Preservation of Purchase Rights and Adjustment of
Exercise Price upon Merger, Consolidation, etc. In case the
Company shall consolidate or merge with or into any other
corporation (other than a consolidation or merger in which the
Company is the surviving corporation and each share of Common
Stock outstanding immediately prior to such consolidation or
merger is to remain outstanding immediately after such
consolidation or merger and no cash, securities or other
property is distributed with respect to such shares) or shall
sell or transfer all or substantially all of its assets to any
person or entity, the Company or such successor or purchasing
person or entity, as the case may be (collectively, the
"acquiring person"), shall execute with the Warrant Agent an
agreement (so long as such agreement does not
affect the Warrant Agent's duties, rights and responsibilities
set forth in this Agreement) that each Holder of a Warrant shall
have the right thereafter upon payment of the Exercise Price in
effect immediately prior to such action to purchase upon exercise
of each Warrant the kind and amount of shares and other
securities, cash and other property that he or she or it would
have owned or have been entitled to receive after the happening
of such consolidation, merger or sale had such Warrant been
exercised immediately prior to such action (assuming that such
Holder, as a holder of Common Stock prior to such action, would
not have exercised any rights of election as a holder of Common
Stock as to the kind or amount of securities, cash or other
property receivable upon such consolidation, merger or sale;
provided, that if the kind or amount of securities, cash or other
property receivable upon such consolidation, merger or sale is
not the same for each non-electing share of Common Stock, then
the kind and amount of securities, cash or other property
receivable shall be deemed to be the kind and amount so
receivable by a plurality of the non-electing shares). The
Company shall mail by first-class mail, postage prepaid, to each
Holder, notice of the execution of any agreement with an
acquiring person as provided in the first sentence of this
subsection 11.3 with a copy thereof to the Warrant Agent. In
addition to any adjustments required by this subsection 11.3,
such agreement shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments
provided for in this Section 11. The Company shall not effect
any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof the acquiring person
(if other than the Company) resulting from such consolidation or
merger or the acquiring person purchasing such assets or other
appropriate corporation or entity shall assume, by written
instrument executed and delivered to the Warrant Agent, the
obligation to deliver to each Holder such shares of stock,
securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to receive and the other
obligations of the Company under this Agreement. The provisions
of this subsection 11.3 shall similarly apply to successive
consolidations, mergers, sales or conveyances. The Warrant Agent
shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement
relating either to the kind or amount of shares of stock or other
securities, cash or property receivable upon exercise of Warrants
or with respect to the method employed and provided therein for
any adjustments.
SECTION 12. No Rights as Stockholders.
Nothing contained in this Agreement or in any of the Warrants
shall be construed as conferring upon the Holders or their
transferees the right to vote or to receive dividends or to
consent or to receive notice as shareholders in respect of any
meeting of shareholders for the election of directors of the
Company or any other matter, or any rights whatsoever as
shareholders of the Company.
SECTION 13. Fractional Shares of Common Stock.
The Company will not issue fractions of Warrants or
distribute Warrant certificates which evidence fractional
Warrants. In lieu of such fractional Warrants, there shall be
paid to the Holders to whom Warrant certificates representing
such fractional Warrants would otherwise be issuable an amount in
cash equal to the product of such fraction of a Warrant
multiplied by the current Market Price per share of Common Stock
issuable with respect to such fraction of a Warrant.
SECTION 14. Right of Action.
All rights of action in respect of this Agreement are
vested in the respective Holders of the Warrant certificates, and
any Holder of any Warrant certificate, without the consent of the
Warrant Agent or of the Holder of any other Warrant certificate,
may, on such Holder's own behalf and for such Holder's own
benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in
respect of, such Holder's right to exercise the Warrants
evidenced by such Warrant certificate in the manner provided in
such Warrant certificate and in this Agreement.
SECTION 15. Inspection of Warrant Agreement.
The Warrant Agent shall keep copies of this Agreement
and any notices given or received by it hereunder available for
inspection by the Holders during normal business hours at its
office in the City of Los Angeles for that purpose. The Company
shall supply the Warrant Agent from time to time with such
numbers of copies of this Agreement as the Warrant Agent may
request.
SECTION 16. Merger or Consolidation or Change of Name of
Warrant Agent.
Any corporation or entity into which the Warrant Agent
may be merged or with which it may be consolidated, or any
corporation or entity resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation
or entity succeeding to the shareholder services business of the
Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided
that such corporation or entity would be eligible for appointment
as successor Warrant Agent under the provisions of Section 18
hereof. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement any of the
Warrants shall have been countersigned but not delivered, any
such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such
Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrants either in the name of
the predecessor Warrant Agent or in the name of the successor
Warrant Agent, and in all such cases such Warrants shall have the
full force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall
be changed and at such time any of the Warrants shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignatures under its prior name and deliver Warrants so
countersigned; and in case at that time any of the Warrants shall
not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name;
and in all such cases such Warrants shall have the full force
provided in the Warrants and in this Agreement.
SECTION 17. Concerning the Warrant Agent.
The Warrant Agent undertakes the duties and obligations
expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of
Warrants, by their acceptance thereof, shall be bound:
17.1 Disclaimer of Representations. The statements
contained herein and in the Warrants shall be taken as statements
of the Company, and the Warrant Agent assumes no responsibility
for the correctness of any of the same except such as describe
the Warrant Agent or action taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of
the Warrants except as herein otherwise provided.
17.2 No Responsibility for Failure of Company's
Covenants. The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants or
provisions contained in this Agreement or in the Warrants.
17.3 Delegation. The Warrant Agent may execute and
exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its
attorneys or agents, and the Warrant Agent shall not be
answerable or accountable for any act, neglect or misconduct
of any such attorneys or agents or for any loss to the Company
resulting from such neglect or misconduct provided reasonable
care shall have been exercised in the selection and continued
retention thereof.
17.4 Opinion of Counsel. The Warrant Agent may consult
at any time with legal counsel satisfactory to it, and the
Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with the opinion or the advice of such counsel.
17.5 Officer's Certificate. Whenever in the
performance of its duties under this Agreement the Warrant Agent
shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer or the Secretary of the
Company and delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent and the Warrant
Agent shall incur no liability for or in respect of any action
taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
17.6 Compensation, Reimbursement and Indemnification.
The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in
the performance of its duties under this Agreement, to reimburse
the Warrant Agent for all expenses, taxes and governmental charges
and other charges of any kind and nature reasonably incurred by
the Warrant Agent in the performance of its duties under this
Agreement including its reasonable expenses and counsel fees.
The Company also agrees to indemnify the Warrant Agent and save
it harmless against any and all losses, liabilities, including
judgments, costs and reasonable counsel fees, for any action
taken, suffered or omitted by the Warrant Agent in the
performance of its duties under this Agreement except as a result
of the Warrant Agent's gross negligence or willful misconduct.
The indemnity provided herein shall survive the termination of
this Agreement and the termination and expiration of the
Warrants. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Anything
to the contrary notwithstanding, in no event shall the Warrant
Agent be liable for special, punitive, indirect, consequential
or incidental loss or damage of any kind whatsoever (including
lost profits), even if the Warrant Agent has been advised of the
likelihood of such loss or damage. Any liability of the Warrant
Agent under this Agreement, except in the event of the Warrant
Agent's gross negligence or willful misconduct, will be limited
to the amount of fees paid by the Company to the Warrant Agent.
17.7 No Action Without Assurance of Reimbursement.
The Warrant Agent may, but shall be under no obligation to
institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one
or more Holders shall furnish the Warrant Agent with reasonable
security and indemnity for any costs and expenses which may be
incurred. All rights or action under this Agreement or under any
of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall
be brought in its name as Warrant Agent, and any recovery of
judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.
17.8 Conflicts of Interest. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and
freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
17.9 Solely as Agent. The Warrant Agent shall act
hereunder solely as agent, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be
liable for anything that it may do or refrain from doing in
connection with this Agreement except for its own gross negligence
or willful misconduct.
17.10 Reliance on Documents. The Warrant Agent will
not incur any liability or responsibility to the Company or to
any Holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by it to
be genuine and to have been signed, sent or presented by the
proper party or parties.
17.11 No Representation Regarding Validity, Etc. The
Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery
hereof (except the due execution and delivery hereof by the
Warrant Agent) or in respect of the validity or execution of
any Warrant (except its countersignature thereof); nor shall
the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Warrant Shares (or other stock) to be issued pursuant to
this Agreement or any Warrant, or as to whether any Warrant
Shares (or other stock) will when issued be validly issued,
fully paid and nonassessable, or as to the Exercise Price or
the number or amount of Warrant Shares or other securities or
other property issuable upon exercise of any Warrant.
17.12 Instructions from Company. The Warrant Agent
is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President,
the Chief Financial Officer or the Secretary of the Company,
and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any
action taken, suffered or omitted to be taken by it in good
faith in accordance with instructions of any such Officers.
17.13 Warrant Agent Not Required to Expend Funds. No
provision of this Agreement shall require the Warrant Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of its duties hereunder or in the
exercise of its rights if it believes that repayment of such
funds or adequate indemnification against such risk or liability
is not reasonably assured to it.
SECTION 18. Change of Warrant Agent.
The Warrant Agent may resign and be discharged from its
duties under this Agreement by giving to the Company 60 days'
notice in writing. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company. If the Warrant
Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Warrant Agent. If the Company shall fail to make such
appointment within a period of 50 days after such notice of
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then the resigning,
discharged or removed Warrant Agent or any Holder may apply to
any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or such court, shall be (a) an
entity, in good standing, organized and doing business under the
laws of the United States of America or any state thereof and
having at the time of its appointment as warrant agent a combined
capital and surplus of at least $50,000,000, as set forth in its
most recent published annual report of condition or (b) an
affiliate of an entity described in clause (a) above. After
appointment, the successor warrant agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent hereunder without further
act or deed; but the former Warrant Agent shall deliver and
transfer to the successor warrant agent any property at the time
held by it hereunder, and shall execute and deliver any further
assurance, conveyance, act or deed reasonably requested and
necessary for such purpose. In the event of such resignation or
removal, the successor warrant agent shall mail, by first-class
mail, postage prepaid, to each Holder, written notice of such
removal or resignation and the name and address of such successor
warrant agent. Failure to file any notice provided for in this
Section 18, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the
case may be.
SECTION 19. Identity of Transfer Agent.
Forthwith upon the appointment of any subsequent
Transfer Agent for the Company's shares of Common Stock, or any
other shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants,
the Company will file with the Warrant Agent a statement setting
forth the name and address of such Transfer Agent.
SECTION 20. Notices.
Any notice pursuant to this Agreement by the Company or
by the Holder of any Warrant to the Warrant Agent, or by the
Warrant Agent or by the Holder of any Warrant to the Company,
shall be in writing and shall be deemed to have been duly given
if delivered or mailed by certified mail, return receipt
requested, (a) if to the Company, to The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ and, (b) if to the Warrant
Agent, for so long as The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Corporation is
acting as Warrant Agent, to the address provided above for the
Company. Each party hereto may from time to time change the
address to which notices to it are to be delivered or mailed
hereunder by notice in writing to the other party.
Any notice mailed pursuant to this Agreement by the
Company or the Warrant Agent to the Holders of Warrants shall be
in writing and shall be deemed to have been duly given if mailed
by first-class mail, postage prepaid, to such Holders at their
respective addresses on the Warrant Register of the Warrant
Agent.
SECTION 21. Supplements and Amendments.
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement, without the approval of any
Holder in order to cure any ambiguity or to correct or supplement
any provision contained herein that may be defective or
inconsistent with any other provisions herein, or to make any
other provisions with regard to matters or questions arising
hereunder that the Company and the Warrant Agent may deem
necessary or desirable and that shall not adversely affect the
interests of the Holders of Warrants.
In addition to the foregoing, with the consent of
Holders of Warrants entitled, upon exercise thereof, to receive
not less than a majority of the Warrant Shares issuable
thereunder, the Company and the Warrant Agent may modify this
Agreement for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this
Agreement or modifying in any manner the rights of the Holders of
the Warrants; provided, however, that (a) no modification of the
terms (including, but not limited to the adjustments described in
Section 11) upon which the Warrants are exercisable or reducing
the percentage required for consent to modification of this
Agreement, no acceleration of the Expiration Date and no increase
in the Exercise Price may, in each case, be made without the
consent of the Holder of each outstanding Warrant affected
thereby, and (b) notwithstanding anything to the contrary
contained herein, the Warrant Agent may, but shall not be
required to, enter into a supplement or amendment that affects
the Warrant Agent's duties, obligations or immunities under this
Agreement.
SECTION 22. Successors.
All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 23. Merger or Consolidation of the Company.
The Company will not merge or consolidate with or into
any other corporation unless the corporation resulting from such
merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the
Warrant Agent in the exercise of its reasonable judgment and
executed and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the
Company.
SECTION 24. Applicable Law.
This Agreement and each Warrant issued hereunder shall
be deemed to be a contract made under the internal laws of the
State of California (without preference to conflicts of law
principles) and for all purposes shall be construed in accordance
with the laws of said State; except that all provisions regarding
the rights, duties and obligations of the Warrant Agent shall be
governed and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed
entirely within such State.
SECTION 25. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company, the Warrant
Agent and the Holders of the Warrants any legal or equitable
right, remedy or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company, the
Warrant Agent, and their respective successors and assigns
hereunder, and the holders from time to time of the Warrants.
SECTION 26. Counterparts.
This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
SECTION 27. Captions.
The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have
no substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
--------------------------------
Title: Chief Executive Officer
Attest:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Chief Financial Officer
and Secretary
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ CORPORATION,
as
Warrant Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
--------------------------------
Title: Chief Executive Officer
Attest:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Chief Financial Officer
And Secretary