WARRANT AGREEMENT
Warrant Agreement dated as of ________________, 1997 between Intervest
Bancshares Corporation, a Delaware corporation (the "Company") and The Bank of
New York, a New York trust company (the "Warrant Agent").
By agreement dated as of September 27, 1994, as amended as of December
1, 1995, and as further amended as of October 4, 1996 (collectively the
"Previous Agreement"), the Company has previously appointed the Warrant Agent to
act on behalf of the Company in connection with the issuance, division,
transfer, exchange and exercise of warrants to purchase shares of its Class A
Common Stock, and warrants to purchase shares of its Class B Common Stock
(collectively, the "Warrants").
The Company wishes the Warrant Agent to continue to act on behalf of
the Company and the Warrant Agent is willing to act in connection with the
issuance, division, transfer, exchange and exercise of Warrants.
By this Warrant Agreement, the Company and the Warrant Agent hereby
amend and restate the Previous Agreement in its entirety.
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; Transferability and Form of
Warrant.
1.1 Appointment. The Company hereby appoints the Warrant Agent
to act as agent for the Company in accordance with the instructions set forth in
this Agreement, and the Warrant Agent hereby accepts such appointment.
1.2 Registration. Each Warrant certificate 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 any Holder
of any Warrant who is registered in the Warrant Register 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, and
shall not be liable for any registration of transfer of Warrants that are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration of transfer, or
with such knowledge of such facts that its participation therein amounts to bad
faith.
1.3 Transfer by Holders. The Warrants held by Holders shall be
transferable only on the books of the Company maintained at the office or agency
of the Warrant Agent in the Borough of Manhattan, City of New York, upon
delivery thereof duly endorsed by the Holder or by such Holder's duly authorized
attorney or legal representative, or accompanied by proper evidence of
succession, assignment or authority to transfer, which endorsement shall be
guaranteed by an institution that participates in a nationally recognized
signature guaranty program. 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 may be
required to be deposited and remain with the Warrant Agent in its discretion.
Upon any registration of transfer, the Warrant Agent shall countersign and
deliver a new Warrant certificate to the person entitled thereto.
1.4 Form of Warrant Certificates. The text of Warrant
certificates and of the form of election to purchase Shares shall be in such
form or forms of certificate as may, from time to time, be approved by the
Company and the Warrant Agent. Each Warrant shall initially entitle the Holder
thereof to purchase the number of shares set out in the certificate. The number
of Warrants, the exercise price per Share and the number of Shares issuable upon
exercise of each warrant issued to Holders are subject to adjustment upon the
occurrence of certain events, all as provided in Section 9. The Warrant
certificates shall be executed on behalf of the Company by its Chairman of the
Board (or any Co-Chairman), or any Vice Chairman of the Board, or its President
or one of its Vice Presidents under its corporate seal reproduced thereon
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 office prior to the delivery of such
Warrant certificates or did not hold such office on the date of this Agreement.
Warrant certificates issued to Holders shall be dated as of
the date of countersignature thereof by the Warrant Agent either upon initial
issuance or upon division, exchange, substitution or transfer.
SECTION 2. Countersignature of Warrant Certificates.
The Warrant certificates shall be 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, however, may be countersigned by the Warrant Agent (or by
its successors 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 a Chairman, President, Vice President,
or Secretary of the Company, countersign, issue and deliver Warrants entitling
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the Holders thereof to purchase shares of Class A Common Stock and Class B
Common Stock and shall countersign and deliver Warrants as otherwise provided in
this Agreement.
SECTION 3. 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
Shares as the certificate or certificates surrendered then entitle such Holder
to purchase. Any Holder of a Warrant certificate desiring to exchange it shall
make such request in writing delivered to the Warrant Agent and shall surrender,
properly endorsed in the manner described in subsection 1.3 hereof, the
certificate or certificates evidencing the Warrant or Warrants to be so
exchanged. Thereupon, the Warrant Agent shall deliver to the person entitled
thereto a new Warrant certificate or certificates as so requested, which
certificate or certificates will be in the same form as the original certificate
or in such other form as may be approved by the Company and the Warrant Agent.
SECTION 4. Term of Warrants; Exercise of Warrants by Holders;
Callability.
4.1 Term of Warrants. Subject to the terms of this Agreement, each
Holder shall have the right at any time after issuance until the time and date
specified on the certificate, to purchase from the Company the number of fully
paid and nonassessable Shares to which the Holder may at the time be entitled to
purchase pursuant to the Warrants then being exercised by the Holder, upon
surrender, to the Company at the office or agency of the Warrant Agent in the
Borough of Manhattan, City of New York, of the certificate or certificates
evidencing such Warrants, together with the form of election to purchase on the
reverse thereof duly filled in and signed, which signature shall be guaranteed
by an institution that participates in a nationally recognized signature
guaranty program, and upon payment to the Warrant Agent for the account of the
Company of the Warrant Price for the number of Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Warrant Price shall be
made by certified or cashier's check.
The Company may, from time to time, by written notice to the Warrant
Agent specifying the revised expiration date, extend the expiration date for any
Warrant or Warrants issued by it. In such event a legend, in the form of Exhibit
A, attached hereto (or such other form as may be approved by the Company and the
Warrant Agent), shall be affixed to or over-stamped on certificates presented by
holders of Warrants when the expiration date has been so extended or when new
certificates representing such Warrants are issued.
4.2 Exercise by Holders. Subject to Section 5 hereof, upon such
surrender of Warrants and payment of the Warrant 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 Shares so
purchased upon the exercise of such Warrants, together with payment, as provided
in subsection 10.1 hereof, in respect of any fractional Shares otherwise
issuable upon such surrender. Such certificate or certificates shall be deemed
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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 Shares as of the date of the
surrender of such Warrants and payment of the Warrant Price, as aforesaid;
provided, however, that if, at the date of surrender of such Warrants and
payment of such Warrant Price, the transfer books for the Shares shall be
closed, the certificates for the Shares in respect of which such Warrants are
then exercised shall be issuable as of the date on which such books shall next
be opened (whether before or after the expiration date of the Warrant) and until
such date the Company shall be under no duty to deliver any certificate for such
Shares; provided further, however, that the transfer books of record, unless
otherwise required by law or regulation, shall not be closed at any one time for
a period longer than 20 days. 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 Shares specified
therein at any time prior to the date of expiration of the 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 the same form as the original certificate or
in such other form as may be approved by the Company and the Warrant Agent,
pursuant to the provisions of this Section and of Section 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
purposes.
4.3 Callability. If so provided in the certificate representing the
Warrant, the Warrant shall be subject to call by the Company, at the times and
upon payment of the sum, if any, specified in the certificate. If the Company
elects to call the Warrants, it shall notify the Warrant Agent in writing of the
call date and the portion of the Warrants to be called. The Company shall give
such notice at least 60 days before the date. If less than all of the Warrants
subject to call are to be redeemed, the Warrants shall be redeemed from Holders
on a pro rata basis based upon their aggregate holdings. At least 60 days before
the call date, the Company shall mail a notice of call by first-class mail to
each Holder whose Warrants have been called. The notice shall identify the
Warrants called and shall state: the call date; the call price, if any; and that
from and after the call date (unless the Company defaults in the payment of the
call price, if any), all rights of the Holder as a Warrantholder shall cease,
except the right to receive the call price, without interest.
SECTION 5. Payments of Taxes.
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of 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 Warrants or certificates for shares in
a name other than that of the registered Holder of the Warrants that were
surrendered.
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SECTION 6. 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, with respect to Holders, 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 upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant certificate and indemnity and bonds, if requested, also satisfactory to
them. Applicants 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 7. Reservation of Shares; Cancellation of Warrants.
7.1 Reservation of Shares. There have been reserved, and the Company
shall at all times keep reserved out of its authorized Class A Common Stock and
Class B Common Stock, a number of shares of Class A Common Stock and Class B
Common Stock sufficient to provide for the exercise of the rights of purchase
represented by the outstanding warrants. The Transfer Agent for the Class A
Common Stock and Class B 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
as shall be requisite for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent for the Class A Common Stock and Class
B 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 outstanding 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 purposes and will
provide or otherwise make available any cash which may be payable as provided in
Section 10 hereof. All Warrant certificates surrendered by Holders in the
exercise of the rights thereby evidenced shall be canceled by the Warrant Agent.
Promptly after the date of expiration of the Warrants, the Warrant Agent shall
certify to the Company the aggregate number of Warrants then outstanding which
are held by Holders, and thereafter no shares shall be subject to reservation in
respect of such Warrants.
7.2 Cancellation of Warrants. In the event the Company shall purchase
or otherwise acquire Warrants from Holders, the related Warrant certificates
shall thereupon be delivered to the Warrant Agent and be canceled by it and
retired. The Warrant Agent shall cancel any Warrant certificate surrendered by
Holders for exchange, substitution, transfer or exercise in whole or in part.
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SECTION 8. Warrant Price.
The exercise price per share at which Shares shall be purchasable upon
exercise of each Warrant (the "Warrant Price") shall be the amount set out in
the certificate representing such Warrant, subject to adjustment pursuant to
Section 9 hereof.
SECTION 9. Adjustment of Warrant Price and Number of Shares for
Warrants.
9.1 Adjustments for Class A Warrants. Except as may otherwise be
provided in the form of certificate representing a Warrant (in which case the
provisions set out in the certificate related to adjustments in the number and
kind of securities purchasable upon the exercise of the Warrant and the Warrant
Price shall govern and control), the number and kind of securities purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the happening of certain events occurring
after the date of this Agreement, as follows:
(a) Subject to the exceptions referred to in subsection 9.3,
in the event the Company shall, at any time or from time to time after
the date of issuance of such Warrant, sell any shares of Class A Common
Stock for a cash consideration per share less than the then applicable
Warrant Price for such Warrant, then the applicable Warrant Price for
such Warrant, in effect immediately prior to such sale shall be reduced
to the price (rounded to the nearest cent) determined by dividing (i)
an amount equal to the sum of (x) the number of shares of Class A
Common Stock outstanding immediately prior to such sale multiplied by
the then applicable Warrant Price for such Warrant, plus (y) the cash
consideration received by the Company upon such sale, by (ii) the total
number of shares of Class A Common Stock outstanding immediately after
such sale. The cash consideration received by the Company shall be
deemed to be the gross sales price therefor without deducting therefrom
any expense paid or incurred by the Company or any underwriting
discounts or commissions or concessions paid or allowed by the Company
in connection therewith.
(b) In case the Company shall (i) pay a dividend in shares of
Class A Common Stock or make a distribution to all holders of shares of
Class A Common Stock in shares of Class A Common Stock, (ii) subdivide
its outstanding shares of Class A Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Class A Common Stock
into a smaller number of shares of Class A Common Stock, or (iv) issue
by reclassification of its shares of Class A Common Stock any shares of
capital stock of the Company, the number of 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 the kind
and number of Shares of the Company that such person would have owned
or have 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
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thereto. An adjustment made pursuant to this paragraph (b) shall be
made on the effective date of any such event and shall become effective
immediately after such effective date retroactive to the record date,
if any, for such event. If, as a result of an adjustment made pursuant
to this paragraph (b), the Holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive shares of two or more
classes of capital stock of the Company, the Board of Directors (whose
determination shall be conclusive) shall determine the allocation of
the adjusted Warrant Price for each Warrant between or among shares of
such classes of capital stock of the Company.
(c) In case the Company shall fix a record date for the
issuance of rights, convertible securities or warrants to all holders
of its shares of Class A Common Stock entitling them to subscribe for
or purchase shares of Class A Common Stock at a price per share (or
having a conversion price per share) that is lower on the date of
issuance thereof than the then current market price per share of Class
A Common Stock (as defined in paragraph (e) below), the number of
Shares thereafter purchasable upon the exercise of each Warrant shall
be determined by multiplying the number of Shares theretofore
purchasable upon exercise of each Warrant by a fraction, of which the
numerator shall be the number of shares of Class A Common Stock
outstanding on the date of issuance of such rights, convertible
securities or warrants plus the number of additional shares of Class A
Common Stock offered for subscription or purchase (or into which the
convertible securities so offered are initially convertible), and of
which the denominator shall be the number of shares of Class A Common
Stock outstanding on the date of issuance of such rights or warrants
plus the number of shares that the aggregate offering price of the
total number of shares of Class A Common Stock so offered (or the
aggregate initial conversion price of the convertible securities so
offered) would purchase at the current market price per share of Class
A Common Stock (as defined in paragraph (e) below) on the record date
for this issuance of such rights, convertible securities or warrants.
Such adjustment shall be made at time of issuance and shall become
effective immediately after such rights, convertible securities or
warrants are issued, retroactive to the record date for the
determination of stockholders to receive such rights, convertible
securities or warrants.
(d) In case the Company shall fix a record date for the
distribution to all holders of its shares of Class A Common Stock of
evidences of its indebtedness or assets (excluding cash dividends) or
rights to subscribe, convertible securities or warrants (excluding
those referred to in paragraph (c) above), then in each case the
Warrant Price shall be adjusted to a price determined by multiplying
the Warrant Price in effect immediately prior to such distribution by a
fraction, of which the numerator shall be the then current market price
per share of Class A Common Stock as of such record date, less the fair
value as of such record date (as determined by the Board of Directors
of the Company, whose determination shall be conclusive) of the portion
of the assets or evidences of indebtedness so distributed or of such
subscription rights, convertible securities or warrants applicable to
one share of Class A Common Stock, and of which the denominator shall
be such current market price per share of Class A Common Stock as of
such record date. Such adjustment shall be made whenever any such
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distribution is made, and shall become effective on the date of
distribution retroactive to the record date for the determination of
stockholders entitled to receive such distribution.
(e) For the purpose of any computation under paragraphs (c)
and (d) above and Section 10, the current market price per share of
Class A Common Stock at any date shall be deemed to be the average of
the daily closing prices for the thirty consecutive trading days
commencing forty-five trading days before the date in question. The
closing price for each day shall be (i) if the Class A Common Stock is
listed or admitted to trading on a national securities exchange, the
closing price on the NYSE-Consolidated Tape (or any successor composite
tape reporting transactions on national securities exchanges) or, if
such a composite tape shall not be in use or shall not report
transactions in the Class A Common Stock, the last reported sales price
regular way on the principal national securities exchange on which the
Class A Common Stock is listed or admitted to trading (which shall be
the national securities exchange on which the greatest number of shares
of the Class A Common Stock has been traded during such 30 consecutive
trading days), or, if there is no transaction on any such day in any
such situation, the mean of the bid and asked prices on such day, or
(ii) if the Class A Common Stock is not listed or admitted to trading
on any such exchange, the last reported sale price, if reported, or, if
no sale occurs on such date or the last reported sale price is not
available, the average of the closing bid and asked prices as reported
by the National Association of Securities Dealers Automated Quotation
System (NASDAQ) or a similar source selected from time to time by the
Company for the purpose. If on any such date the Class A Common Stock
is not quoted by any such organization, the fair value of the Class A
Common Stock on such date, as determined in good faith by the Board of
Directors of the Company, shall be used.
(f) No adjustment in the number of Shares purchasable
hereunder or the Warrant Price shall be required unless such adjustment
would require an increase or decrease of at least five per cent (5%) in
the number of Shares purchasable upon the exercise of such Warrant or
the Warrant Price for such Warrant.
(g) Whenever the number of Shares purchasable upon the
exercise of any Warrant is adjusted, as herein provided, the Warrant
Price per Share payable upon exercise of such Warrant shall be adjusted
(to the nearest cent) by multiplying such Warrant Price immediately
prior to such adjustment by a fraction, of which the numerator shall be
the number of Shares purchasable upon the exercise of such Warrant,
immediately prior to such adjustment, and of which the denominator
shall be the number of Shares so purchasable immediately thereafter;
provided, however, that the Company may elect, in lieu of the
adjustment in the number of Shares pursuant to paragraph (b) or (c)
above, to adjust the number of Warrants pursuant to paragraph (m) of
this subsection 9.1, but any such election shall not affect the
adjustment of the Warrant Price required by this paragraph.
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(h) Whenever the number of Warrants or the number of Shares
purchasable upon the exercise of a Warrant or the Warrant Price per
Share 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 so adjusted, 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 the number of warrants or Shares
purchasable upon the exercise of such Warrant and the Warrant Price of
such Shares after such adjustment, setting forth a brief statement of
the facts requiring such adjustment and setting forth 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 of Warrants 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 of Warrants to determine whether any facts exist that may
require any adjustment of the Warrant Price or the number of Warrants
or Shares or other stock or property purchasable 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.
(i) In any case in which this subsection 9.1 shall require
that an adjustment become effective retroactively to a record date, the
Company may, at its option, elect to defer (but only until five
business days following the filing by the Company with the Warrant
Agent of the certificate described in paragraph (h) above) issuing to
the holder of any Warrant exercised after such record date the shares
of Class A Common Stock and other capital stock of the Company issuable
upon such exercise over and above the shares of Class A Common Stock
and other capital stock of the Company issuable upon such exercise only
on the basis of the Warrant Price for the Warrants prior to such
adjustment; and, in lieu of the shares the issuance of which is so
deferred, the Company shall issue or cause its transfer agents to issue
due bills or other appropriate evidence of the right to receive such
shares.
(j) In the event that at any time, as a result of an
adjustment made pursuant to paragraphs (b) through (d) above, the
Holders of a Warrant or Warrants shall become entitled to purchase any
shares of the Company's capital stock other than shares of Class A
Common Stock, thereafter the number of such other shares so purchasable
upon exercise of each Warrant and the Warrant Price of such shares
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 Shares contained in this subsection 9.1 and the
provisions of Section 4 and subsections 9.2 through 9.5, inclusive and
subsection 10.1, with respect to the Shares shall apply on like terms
to any such other shares.
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(k) Upon the expiration of any rights, options, warrants or
conversion rights referred to in this subsection 9.1, if any thereof
shall not have been exercised, the Warrant Price and the number of
Shares purchasable upon the exercise of a Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) assuming the only shares of
Class A Common Stock so issued were the shares of Class A Common Stock,
if any, actually issued or sold upon the exercise of such rights,
options, warrants or conversion rights and such shares of Class A
Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise.
(l) The Company may make reductions in the Warrant Price, in
addition to those required by this subsection 9.1, as it considers to
be advisable in order to avoid or diminish any income tax to any holder
of its Class A Common Stock resulting from any dividend or distribution
of stock or issuance of rights or warrants to purchase or subscribe for
stock or from any event treated as such for income tax purposes or for
any other reasons.
(m) In lieu of any adjustment in the number of Shares
purchasable upon the exercise of each Warrant as provided in this
Agreement, the Company may elect to adjust the number of Warrants so
that each Warrant outstanding (after such adjustment in the number of
Warrants) shall be exercisable for one Share. Each Warrant held of
record immediately prior to such adjustment of the number of Warrants
shall become that number of Warrants determined (to the nearest
hundredth) by multiplying the number of Shares purchasable upon
exercise of a Warrant immediately prior to such adjustment by a
fraction, the numerator of which shall be the Warrant Price in effect
immediately prior to such adjustment and the denominator of which shall
be the Warrant Price in effect immediately after such adjustment. Upon
each adjustment of the number of Warrants pursuant to this paragraph
(m), the Company shall, as promptly as practicable, cause to be
distributed to Holders of record of Warrant certificates on such record
date Warrant certificates evidencing, subject to Section 10, the
additional Warrants to which such holders shall be entitled as a result
of such adjustment or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Warrant certificates held by such holders prior to the date of
adjustment, and upon surrender thereof if required by the Company, new
Warrant certificates evidencing all the Warrants to which such holders
shall be entitled after such adjustment. Warrant certificates to be so
distributed may, at the option of the Company, bear the adjusted
Warrant Price and shall be registered in the names of the holders of
record of Warrant certificates on the record date specified in the
public announcement.
9.2 No Adjustment for Dividends. Except as provided in subsection 9.1,
no adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
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9.3 No Adjustment in Certain Cases. No adjustments shall be made under
subsection 9.1 or any other Section herein:
(a) In connection with the issuance of Shares upon exercise of
Warrants.
(b) In connection with the issuance of shares of Class A
Common Stock issuable pursuant to any stock option or employee benefit plans
which have been or may be adopted by the Company.
9.4 Preservation of Purchase Rights Upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, each Holder of a Warrant shall have the right
thereafter upon payment of the Warrant Price in effect immediately prior to such
action to purchase upon exercise of each Warrant the kind and amount of shares
and other securities and property that such person would have owned or have been
entitled to receive after the happening of such consolidation, merger, sale or
conveyance had such Warrant been exercised immediately prior to such action and
the Company or such successor or purchasing corporation, as the case may me,
shall execute with the Warrant Agent agreements so providing. The Company shall
mail by first-class mail, postage prepaid, to the Holder of each Warrant, notice
of the execution of any such agreement. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 9. The provisions of this subsection
9.4 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 or
property receivable upon exercise of Warrants or with respect to the method
employed and provided therein for any adjustments.
9.5 Class B Warrants. The provisions of subsections 9.1 through 9.4
apply to Warrants to purchase shares of Class A Common Stock. In the case of
Warrants to purchase shares of Class B Common Stock, any provisions related to
adjustments in the Warrant Price or the number or kind of shares purchasable
upon exercise of the Warrant shall be set out in the certificate representing
such Warrant.
9.6 Statement on Warrants. Irrespective of any adjustments in the
Warrant Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number of and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
SECTION 10. Fractional Interests.
10.1 Fractional Shares. The Company shall not be required to issue
fractional Shares on the exercise of Warrants. If more than one Warrant shall be
11
presented for exercise in full at the same time by the same Holder, the number
of full Shares that shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Shares represented by the
Warrants so presented. If any fraction of a Share nevertheless would be issuable
on the exercise of any Warrant (or specified portion thereof), the Company shall
pay an amount equal to the current market price per Share (as defined in
subsection 9.1(d) above) on the date of such exercise multiplied by such
fraction.
10.2 Fractional Warrants. The Company shall not be required to issue
fractions of Warrants on any distribution of Warrants to holders of Warrant
certificates pursuant to subsection 9.1 hereof or to distribute Warrant
certificates which evidence fractional Warrants. In lieu of such fractional
Warrants, there shall be paid to the registered holders of Warrant certificates
with regard to which such fractional Warrants would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Warrant on the trading day immediately prior to the date on which such
fractional Warrant would have been otherwise issuable. For purposes of this
subsection 10.2, the current market value of a Warrant shall be the closing
price of the Warrant for the trading day immediately prior to the date on which
such fractional Warrant would have been otherwise issuable. The closing price
for any day shall be the last sale price regular way or, in case no such sale
takes place on such day, the average of the closing bid and asked prices regular
way, in either case as quoted on NASDAQ, or, if the Warrants are not quoted on
NASDAQ, on the principal national securities exchange on which the Warrants are
listed or admitted to trading. If on any such date the Warrants are not quoted
by any such organization, the fair value of the Warrants on such date, as
determined in good faith by the Board of Directors of the Company, shall be
used.
SECTION 11. No Rights as Stockholders; Notices and Reports to Warrant
Holders.
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 stockholders in
respect of any meeting of stockholders for the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company. If, however, at any time prior to the expiration of the Warrants and
prior to their exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Class A Common Stock; or
(b) the Company shall offer to the holders of its shares of
Class A Common Stock any additional shares of Class A Common Stock or
securities convertible into shares of Class A Common Stock or any right
to subscribe thereto; or
(c) a dissolution, liquidation or winding-up of the Company
(other than in connection with a consolidation, merger, or sale of all
or substantially all of its property, assets, and business as an
entirety) shall be proposed;
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then in any one or more of said events, the Company shall give notice in writing
of such event to the Warrant Agent and the Holders as provided in Section 17
hereof. Such notice shall be given at least 10 days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend or offer, or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation or
winding-up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, offer, or proposed dissolution,
liquidation or winding-up.
SECTION 12. Disposition of Proceeds on Exercise of Warrants; Inspection
of Warrant Agreement.
The Warrant Agent shall account promptly to the Company with respect to
the Warrants exercised and pay to the Company with such accounting all moneys
received by the Warrant Agent upon the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by Holders of Warrants
during normal business hours at its principal office in New York, New York. 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 13. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust 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 would be eligible for appointment as successor Warrant Agent
under the provisions of Section 15 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 counter-signature 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 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
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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 14. Concerning the Warrant Agent.
The Warrant Agent undertakes the duties and obligations 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:
14.1 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.
14.2 The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.
14.3 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, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees 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 employment thereof.
14.4 The Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel to the Company), and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder of
any Warrant 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.
14.5 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, any Vice
Chairman of the Board, the President, any Vice President, the Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the Warrant
Agent; and such certificate shall be full authorization to the Warrant Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
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14.6 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, and agrees to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the performance of its duties under this Agreement except as a result of the
Warrant Agent's negligence or bad faith.
14.7 The Warrant Agent 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 of Warrants shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and expenses
which may be incurred, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider proper,
whether with or without any such security or indemnity. All rights of actions
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.
14.8 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 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.
14.9 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 negligence or bad faith.
14.10 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.
14.11 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 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 Shares
15
(or other stock) to be issued pursuant to this Agreement or any Warrant, or as
to whether any Shares (or other stock) will when issued be validly issued, fully
paid and nonassessable, or as to the Warrant Price or the number or amount of
Shares or other securities or other property issuable upon exercise of any
Warrant.
14.12 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, any Co- Chairman, any Vice Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary or any Assistant
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 or suffered to be taken by it in good faith in accordance with
instructions of any such officers.
SECTION 15. Changes 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 removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a
Warrant (who shall with such notice submit his Warrant for inspection by the
Company), then the Holder of any Warrant 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 bank or trust company, in good standing, incorporated under the laws of the
United States of America or any state thereof and having at the time of its
appointment as warrant agent a combined capital and surplus of at least
$50,000,000. 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 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 execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to file
any notice provided for in this Section 15, 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. In the event of such resignation or removal, the successor warrant agent
shall mail, first-class, to each Holder, written notice of such removal or
resignation and the name and address of such successor warrant agent.
SECTION 16. Identity of Transfer Agent.
Forthwith upon the appointment of any subsequent Transfer Agent for the
Company's shares of Class A Common Stock or Class B Common Stock, or any other
shares of the Company's capital stock issuable upon the exercise of the rights
16
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 17. 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 (a) to the Company, to Intervest Bancshares
Corporation, 10 Rockefeller Plaza (Suite 1015), New York, New York, 10020-1903,
Attention: Chairman of the Board; and (b) if to the Warrant Agent, to The Bank
of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Department. 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 each other or the Holders of Warrants shall be in writing and
shall be deemed to have been duly given if mailed, postage prepaid by first
class mail, to such Holders at their respective addresses on the books of the
Warrant Agent, or the Company, respectively.
SECTION 18. Supplements and Amendments.
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement, without the approval of any Holders of Warrants, 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 in regard to matters or questions arising hereunder
that the Company and the Warrant Agent may deem necessary or desirable that
shall not adversely affect the interests of the Holders of Warrants.
SECTION 19. 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 20. Merger or Consolidation of the Company.
Upon any merger or consolidation of the Company, 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.
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SECTION 21. Applicable Law.
This Agreement and each Warrant issued hereunder shall be deemed to be
a contract made under the laws of the State of Delaware and for all purposes
shall be construed in accordance with the laws of said State.
SECTION 22. 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; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent, and the Holders of the Warrants.
SECTION 23. 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 24. 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, all as of the day and year first above written.
INTERVEST BANCSHARES CORPORATION
By: ___________________________
THE BANK OF NEW YORK
By: ___________________________
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EXHIBIT A
THE TERM OF THIS WARRANT HAS BEEN EXTENDED TO 5:00 P.M. NEW YORK TIME,
_____________________________.
Dated: _______________________
Countersigned:
THE BANK OF NEW YORK
By: _______________________________
Authorized Officer
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