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Exhibit 4.4
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WARRANT AGREEMENT
Dated as of July 27, 1999
by and between
HERCULES INCORPORATED
and
THE CHASE MANHATTAN BANK
as Warrant Agent
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TABLE OF CONTENTS
Table of Contents
Page
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SECTION 1. Certain Definitions....................................... 1
SECTION 2. Appointment of Warrant Agent.............................. 6
SECTION 3. Issuance of Warrants; Warrant Certificates................ 6
SECTION 4. No Rights as Holder of Warrant Shares Conferred by
Warrants or Warrant Certificates......................... 10
SECTION 5. Enforcement of Rights.................................... 10
SECTION 6. Terms of Warrants; Exercise of Warrants.................. 11
SECTION 7. Payment of Taxes......................................... 14
SECTION 8. Reservation of Warrant Shares............................ 14
SECTION 9. Obtaining Stock Exchange Listings........................ 15
SECTION 10. Adjustment of Exercise Price Per Share, Warrant Exercise
Price and Number of Warrant Shares Issuable.............. 15
SECTION 11. Statement on Warrants.................................... 23
SECTION 12. No Dilution or Impairment; Capital and Ownership
Structure................................................ 23
SECTION 13. Fractional Interest...................................... 23
SECTION 14. Notices to Warrant Holders; No Rights as Shareholders.... 24
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent. 25
SECTION 16. Warrant Agent............................................ 26
SECTION 17. Resignation and Removal of Warrant Agent; Appointment of
Successor................................................ 28
SECTION 18. Reports.................................................. 29
SECTION 19. Notices.................................................. 29
SECTION 20. Supplements and Amendments............................... 30
SECTION 21. Successors............................................... 31
SECTION 22. Termination.............................................. 31
SECTION 23. Governing Law............................................ 31
SECTION 24. Benefits of This Agreement............................... 31
SECTION 25. Counterparts............................................. 31
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WARRANT AGREEMENT, dated as of July 27, 1999 (the "Agreement"),
between Hercules Incorporated, a corporation duly organized and existing under
the laws of the State of Delaware (the "Company"), and The Chase Manhattan Bank,
a New York banking corporation, as warrant agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue up to 400,000 warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
9,367,680 shares of the Company's common stock, without par value ($25/48 stated
value) (the "Common Stock"), in connection with the offering by the Company and
Hercules Trust II, a statutory business trust formed under the Business Trust
Act of the State of Delaware (the "Trust"), of up to 400,000 CRESTS(SM) Units
(the "CRESTS Units"), each CRESTS Unit consisting of one preferred security of
the Trust (collectively the "Preferred Securities"), and one Warrant to purchase
23.4192 shares of the Common Stock.
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates (as defined below) and other matters as
provided herein.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company, the Warrant Agent and the Holders (as
defined below), the parties hereto agree as follows:
SECTION 1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"ACCRETED LIQUIDATION AMOUNT" means, at any date, the sum of the
initial purchase price of a Preferred Security (i.e. $741.46) plus accrual of
the discount (i.e. the difference between the scheduled liquidation amount of
$1,000 payable in respect of such Preferred Security on June 30, 2029 and such
initial purchase price), calculated from July 27, 1999 to the date of
calculation on a quarterly bond equivalent yield basis using a 360-day year of
twelve 30-day months until such sum equals $1,000 on June 30, 2029; provided
however, if the Preferred Securities are Remarketed, then at all times on and
after the Reset Date, the term "Accreted Liquidation Amount" shall mean the
"Accreted Liquidation Amount" calculated as described above as of the Reset
Date.
"ACQUISITION RESET EVENT" shall occur if (i) all of the shares of
Common Stock are acquired by a third party and all or a portion of the
consideration for such acquisition involves cash and (ii) the total
consideration per share of Common Stock exceeds the Exercise Price Per Share
(after giving effect to the reduction of the Warrant Exercise Price as
contemplated in Section 6.3 hereof upon the occurrence of a Reset Event).
"AFFILIATE" has the same meaning given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"AGGREGATE MARKET CAPITALIZATION" means the product of the Current
Market Price of a share of Common Stock multiplied by the number of shares of
Common Stock then outstanding.
"AGREEMENT" means this Warrant Agreement, dated as of July 27, 1999,
including all exhibits hereto, as amended or supplemented from time to time.
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"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for, or exercise of, any beneficial interests in the Global
Warrant (including a Global Warrant that is a component of a CRESTS Unit), the
rules and procedures of the Depositary that apply to such transfer, exchange, or
exercise as made available by the Depositary to the Company, the Warrant Agent
and others from time to time upon request.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which banking institutions in The City of New York or Wilmington,
Delaware are authorized or required by law, regulation or executive order to
close.
"CLOSING TIME" means the Closing Time as defined in the
Underwriting Agreement.
"COMMISSION" means the United States Securities and Exchange
Commission as from time to time constituted or, if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under applicable federal securities laws, then the
body performing such duties at such time.
"COMMON STOCK" means the common stock, without par value ($25/48
stated value), of the Company.
"CURRENT MARKET PRICE" means the per share average of the daily
closing prices of the Common Stock for the five consecutive Trading Days
selected by the Company commencing not more than 30 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
Ex Date with respect to the issuance or distribution requiring such computation.
"DEBENTURES" means the Series A Junior Subordinated Deferrable
Interest Debentures of the Company.
"DEFINITIVE WARRANT" means the Warrants in certificated form
registered in the name of the Holder thereof, as evidenced by Warrant
Certificates substantially in the form of Exhibit A hereto except that such
Warrant Certificates shall not bear the Global Warrant Legend and shall not have
the "Schedule of Exchanges of Interests of Global Warrant" attached thereto.
"DEPOSITARY" means the Person specified in Section 3.3 hereof as the
Depositary with respect to the Warrants, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Agreement.
"DTC" means The Depository Trust Company.
"EX DATE", when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades the regular way on the
exchange or market in which the Common Stock is then trading without the right
to receive such issuance or distribution.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
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"EXERCISE DATE" means any Business Day on which a Holder elects to
exercise its Warrants in accordance with terms of this Agreement.
"EXERCISE PRICE PER SHARE" means the purchase price per share of
Common Stock paid or payable upon the exercise of a Warrant in accordance with
the terms of this Agreement, which price shall initially be equal to $42.70,
subject to adjustment pursuant to Section 10 hereof.
"EXPIRATION DATE" means March 31, 2029, subject to acceleration
pursuant to Section 6.3 hereof and extension pursuant to Section 6.4 hereof, or
if any such date is not a Business Day, the next succeeding Business Day.
"FAILED REMARKETING" means that the Remarketing Agent is unable to
Remarket all of the Preferred Securities to be Remarketed at the Remarketing
Rate prior to the close of business on the fifth Business Day following the
Reset Date or all of the conditions precedent to the Remarketing have not been
fulfilled, in each case, as contemplated in the Trust Agreement.
"GLOBAL WARRANT" means one or more Warrant Certificates representing
Warrants in book-entry form, registered in the name of Cede & Co. or such other
nominee designated by the Depositary and issued in the form of one or more
global certificates in accordance with Section 3.1(b) hereof, as evidenced by
Warrant Certificates substantially in the form of Exhibit A hereto.
"GLOBAL WARRANT LEGEND" means the legend set forth in Section 3.5(d)
which is required to be placed on the Warrant Certificates for the Global
Warrant.
"HOLDER" means any Person in whose name a Warrant Certificate shall
be registered in the register maintained by the Warrant Registrar.
"INDENTURE" means the Junior Subordinated Debentures Indenture,
dated as of March 17, 1999, between the Company and The Chase Manhattan Bank, as
trustee, relating to the Debentures, as amended or supplemented from time to
time, including the First Supplemental Indenture thereto, dated as of July 27,
1999.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Warrant through a Participant.
"OFFICER" means, with respect to any Person, the Chief Executive
Officer, the Chief Financial Officer, the President or a Vice President of such
Person.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Warrant Agent in form and substance reasonably
acceptable to the Warrant Agent. The counsel may be an employee of or counsel to
the Company, any subsidiary of the Company or the Warrant Agent.
"PARTICIPANT" means, with respect to the Depositary, a Person who
has an account with the Depositary.
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"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"PROSPECTUS" means the prospectus included in the Shelf Registration
Statement at the time the Shelf Registration Statement was declared effective,
as amended or supplemented by any prospectus supplement and by all other
amendments, including post-effective amendments, and supplements thereto, and
all material incorporated by reference therein.
"REMARKETING" means a remarketing of Preferred Securities in
accordance with the terms of the Trust Agreement, and "Remarket" and
"Remarketed" have related meanings.
"REMARKETING AGENT" means a nationally recognized investment banking
firm selected by the Company.
"REMARKETING RATE" means, in the event of a Remarketing, the annual
distribution rate that enables a resale of the Preferred Securities at a price
equal to at least 100.25% (after provision for the fee of the Remarketing Agent)
of the Accreted Liquidation Amount thereof as of the Reset Date, plus
accumulated distributions, if any, to the Reset Date.
"RESET DATE" has the meaning assigned to such term in Section 6.3
hereof.
"RESET EVENT" means an Acquisition Reset Event or a Trading Reset
Event.
"RESPONSIBLE OFFICER" when used with respect to the Warrant Agent,
means any officer within the corporate trust department of the Warrant Agent,
including any vice president, any assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other authorized representative of the
Warrant Agent who customarily performs functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"SHELF REGISTRATION STATEMENT" means the registration statement
(File No. 333-63423) relating to the registration for resale of Warrant Shares
that has been filed with and declared effective by the Commission pursuant to
this Agreement, and all amendments (including post-effective amendments)
thereto, and all exhibits and material incorporated by reference therein.
"TRADING DAY" means any day on which shares of Common Stock, or any
other capital stock exchangeable for the Common Stock in accordance with Section
10(b) hereof, are traded on the New York Stock Exchange or, if such shares are
not then listed or admitted for trading on the New York Stock Exchange, on the
principal national securities exchange on which such shares are listed or
admitted or, if such shares are not then listed or admitted for trading on
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any national securities exchange, on the Nasdaq National Market or, if such
shares are not then quoted on the Nasdaq National Market, in the applicable
securities market in which such shares are then traded.
"TRADING RESET EVENT" shall occur if (A)(i) on any date after July
27, 2004, the closing price of the Common Stock (taking into account any other
capital stock issued in exchange for the Company's Common Stock, calculated on
an as adjusted basis for each share of the Company's Common Stock) has exceeded
$51.24 for at least 20 Trading Days within the immediately preceding 30 Trading
Days and (ii) the Company elects, at its option, to cause the Remarketing of the
Preferred Securities to occur and, as described in Section 6 hereof, to
accelerate the Expiration Date of the Warrants, and gives written notice of any
such election to the holders of the CRESTS Units, the Preferred Securities and
the Warrants or (B) if there is no prior Remarketing, on January 31, 2029, the
closing price of the Common Stock (taking into account any other capital stock
issued in exchange for the Company's Common Stock, calculated on an as adjusted
basis for each share of the Company's Common Stock) has exceeded $40.56 for at
least 20 Trading Days within the immediately preceding 30 Trading Days.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement of
the Trust, dated as of July 27, 1999, among the Company, as sponsor, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as administrative trustees, The Chase
Manhattan Bank, as property trustee, and Chase Manhattan Bank Delaware, as
Delaware trustee, as amended or supplemented from time to time.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated
July 21, 1999, by and among the Company, the Trust and the underwriters named
therein relating to the CRESTS Units.
"UNIT AGREEMENT" means the Unit Agreement, dated as of July 27,
1999, among the Company, the Trust and The Chase Manhattan Bank, as unit agent.
"WARRANT CERTIFICATE" has the meaning assigned to such term in
Section 3.1(a) hereof.
"WARRANT COUNTERSIGNATURE ORDER" has the meaning assigned to such
term in Section 3.2 hereof.
"WARRANT EXERCISE PRICE" means the purchase price for all shares of
Common Stock paid or payable upon the exercise of a Warrant in full in
accordance with the terms of this Agreement, which price shall initially be
equal to $1,000, subject to adjustment pursuant to Sections 6.3 and 10(o)
hereof.
"WARRANT REGISTRAR" has the meaning assigned to such term in Section
3.3 hereof.
"WARRANT SHARES" means the shares of Common Stock issued or issuable
upon the exercise of the Warrants, which shall initially be equal to 23.4192
shares per Warrant, subject to adjustment pursuant to Section 10 hereof.
SECTION 2. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the terms
set forth in this Agreement, and the Warrant Agent hereby accepts such
appointment.
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SECTION 3. Issuance of Warrants; Warrant Certificates.
3.1. Form and Dating.
(a) General.
The Warrants shall be evidenced by one or more certificates (the
"Warrant Certificates") substantially in the form of Exhibit A hereto. The
Warrant Certificates may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Warrant Certificate shall be dated the
date of the Warrant Agent's countersignature. Warrants that are part of a CRESTS
Unit will not bear a CUSIP number separate from that of the CRESTS Units and
Warrants that are not components of a CRESTS Unit will bear a separate "CUSIP"
number.
The terms and provisions contained in the Warrant Certificates shall
constitute, and are hereby expressly made, a part of this Agreement. The Company
and the Warrant Agent, by their execution and delivery of this Agreement,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Warrant Certificate conflicts with the
express provisions of this Agreement, the provisions of this Agreement shall
govern and be controlling.
(b) Global and Definitive Warrants.
Warrants issued in certificated form shall be evidenced by Warrant
Certificates substantially in the form of Exhibit A attached hereto (but without
the Global Warrant Legend thereon and without the "Schedule of Exchanges of
Interests of Global Warrant" attached thereto). Warrants issued in book-entry
form shall be evidenced by Warrant Certificates substantially in the form of
Exhibit A attached hereto (including the Global Warrant Legend thereon).
The Global Warrant shall represent such of the outstanding Warrants
as shall be specified in the "Schedule of Exchanges of Interests of Global
Warrant" attached thereto or otherwise in accordance with the Applicable
Procedures. A Global Warrant that is not a component of a CRESTS Unit initially
shall have a zero balance, and the Warrant Agent shall make the necessary
endorsement to the "Schedule of Exchanges of Interests of Global Warrant" or
otherwise comply with the Applicable Procedures to increase the number of
outstanding Warrants represented by a Global Warrant that is not a component of
a CRESTS Unit upon a separation of the components in a CRESTS Unit in accordance
with the Unit Agreement. The Warrant Agent shall make such other necessary
endorsements to the Global Warrant to reflect the appropriate number of
outstanding Warrants represented thereby.
3.2. Execution.
An Officer shall sign the Warrant Certificates for the Company by
manual or facsimile signature. If the Officer whose signature is on a Warrant
Certificate no longer holds the required office at the time a Warrant
Certificate is countersigned, the Warrants evidenced thereby shall nevertheless
be valid.
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A Warrant Certificate duly executed by an Officer of the Company
shall not be valid for any purpose until countersigned by the manual signature
of the Warrant Agent. The Warrant Agent's countersignature shall be conclusive
evidence, and the only evidence, that the Warrant evidenced by the applicable
Warrant Certificate have been properly issued under this Agreement.
The Warrant Agent shall, upon a written order of the Company signed
by an Officer (a "Warrant Countersignature Order"), countersign duly executed
Warrant Certificates for original issue up to the number stated in the preamble
hereto and deliver such Warrant Certificates in accordance with such Warrant
Countersignature Order. Subsequent to issuance of the Warrant Certificates
contemplated in the Underwriting Agreement, the Warrant Agent shall countersign
duly executed Warrant Certificates only if issued in exchange or substitution
for one or more previously countersigned Warrant Certificates or in connection
with their transfer as provided in Section 3.5 hereof.
The Warrant Agent may appoint an agent acceptable to the Company to
countersign Warrant Certificates. Such an agent may countersign Warrant
Certificates whenever the Warrant Agent may do so. Each reference in this
Warrant Agreement to a countersignature by the Warrant Agent includes a
countersignature by such agent. Such an agent has the same rights as the Warrant
Agent to deal with the Company or an Affiliate of the Company.
3.3. Warrant Registrar.
The Company shall maintain an office or agency where Warrants may be
presented for registration of transfer or for exchange (the "Warrant
Registrar"). The Warrant Registrar shall keep a register of the Warrants and of
their transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any Holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
Warrant Registrar not a party to this Warrant Agreement. If the Company fails to
appoint or maintain another entity as Warrant Registrar, the Warrant Agent shall
act as such.
The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Global Warrant and any Definitive
Warrants.
The Company initially appoints DTC to act as Depositary with respect
to the Global Warrants.
3.4. Holder Lists.
The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.
3.5. Transfer and Exchange.
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(a) Transfer and Exchange of the Global Warrant.
The Global Warrant may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Global Warrant will be exchanged by the Company for Definitive
Warrants if (i) the Company delivers to the Warrant Agent notice from the
Depositary that it is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within 90
days after the date of such notice from the Depositary, (ii) the Company in its
sole discretion determines that the Global Warrant (in whole but not in part)
should be exchanged for Definitive Warrants and delivers a written notice to
such effect to the Warrant Agent or (iii) a default under this Agreement has
occurred and is continuing. Upon the occurrence of any of the events in (i),
(ii) or (iii) above, Definitive Warrants shall be issued in such names, and
issued in any denominations, as the Depositary shall instruct the Warrant Agent
in writing. The Global Warrant also may be exchanged or replaced, in whole or in
part, as provided in Section 3.6 hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Warrant.
The transfer and exchange of beneficial interests in the Global
Warrant shall be effected through the Depositary in accordance with the
provisions of this Agreement and the Applicable Procedures. Beneficial interests
in the Global Warrant may be transferred to Persons who take delivery thereof in
the form of beneficial interests in the Global Warrants without delivering any
written orders or instructions to the Warrant Registrar to effect such
transfers.
(c) Transfer and Exchange of Beneficial Interests in Definitive Warrants.
The transfer or exchange of Definitive Warrants shall be effected
through the Warrant Registrar in accordance with the provisions of this
Agreement. Prior to such transfer or exchange, the requesting Holder shall
present or surrender to the Warrant Registrar the Definitive Warrants duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Warrant Registrar duly executed by such Holder or by its
attorney, duly authorized in writing.
(d) Legend. The following legend shall appear on the face of the Global
Warrants:
"THIS WARRANT CERTIFICATE IS A GLOBAL WARRANT WITHIN THE MEANING OF THE
WARRANT AGREEMENT, DATED AS OF JULY 27, 1999, AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF
THE DEPOSITARY. THIS WARRANT CERTIFICATE IS EXCHANGEABLE FOR WARRANTS
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN SUCH WARRANT
AGREEMENT, AND NO TRANSFER OF THIS WARRANT CERTIFICATE (OTHER THAN A
TRANSFER OF THIS WARRANT CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF
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THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR
BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO HERCULES INCORPORATED OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY WARRANT CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(e) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges of Warrant
Certificates, the Company shall execute the Warrant Certificates at the
Warrant Registrar's request. The Warrant Agent shall countersign and
deliver the Warrant Certificates in accordance with the provisions of
Section 3.2 hereof.
(ii) No service charge shall be made for any registration of
transfer or exchange of Warrant Certificates, but the Company may require
payment of a sum sufficient to cover any stamps or other tax or
governmental charge payable in connection therewith.
(iii) The Warrant Certificates issued upon any registration of
transfer or exchange shall be duly authorized, executed and delivered and
shall be valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as
the Warrant Certificates surrendered upon such registration of transfer or
exchange.
(iv) Prior to due presentment for the registration of transfer of
any Warrant Certificate, the Warrant Agent, the Warrant Registrar and the
Company may deem and treat the Person in whose name any Warrant
Certificate is registered as the absolute owner of such Warrant
Certificate for all purposes and none of the Warrant Agent, the Warrant
Registrar or the Company shall be affected by notice to the contrary.
3.6. Replacement Warrant Certificates.
Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the ownership of and the loss, mutilation,
theft or destruction of any Warrant Certificate and of such security or
indemnity as may be required by the Company and the Warrant Agent to hold each
of them and any agent of them harmless and, in the case of mutilation of a
Warrant Certificate, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute, and the Warrant Agent
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shall manually countersign and deliver, in exchange for or in lieu of the lost,
mutilated, stolen or destroyed Warrant Certificate, a new Warrant Certificate of
the same tenor and evidencing a like number of Warrants. Upon the issuance of
any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in relation thereto and any other
expenses in connection therewith. Every substitute Warrant Certificate executed
and delivered pursuant to this Section in lieu of any lost, mutilated, stolen or
destroyed Warrant Certificate shall represent an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
the benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates duly executed and delivered hereunder. The provisions
of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of lost, mutilated,
stolen or destroyed Warrant Certificates.
3.7. Cancellation.
The Company may at any time deliver Warrant Certificates
representing Warrants acquired by the Company to the Warrant Agent for
cancellation. In addition, the Warrant Registrar shall forward to the Warrant
Agent any Warrant Certificates surrendered to the Warrant Registrar for
registration of transfer, exchange or exercise. The Warrant Agent shall cancel
all Warrant Certificates surrendered for registration of transfer, exchange,
exercise, replacement or cancellation and shall return such canceled Warrant
Certificates to the Company. The Company may not issue new Warrant Certificates
to replace Warrants that have been exercised or that have been delivered to the
Warrant Agent for cancellation.
3.8. Amendment to Warrant Certificates.
In the event the Company is required to issue replacement Warrant
Certificates because of amendments to the provisions of this Agreement or the
terms of the Warrants affecting the Warrant Certificates (as a result of a
Remarketing or otherwise in accordance with Section 20 hereof), the Company
shall execute and deliver such replacement Warrant Certificates to the Warrant
Agent and the Warrant Agent shall manually countersign and deliver such
replacement Warrant Certificates to the Holders of the prior Warrant
Certificates in accordance with the directions of the Company. The Holders, by
acceptance of the Warrant Certificates, expressly waive any and all rights to
enforce the provisions of the prior Warrant Certificates after the replacement
Warrant Certificates are issued and delivered. The prior Warrant Certificates
shall be deemed to be canceled as of the effective date of the applicable
amendment, and shall no longer be outstanding.
SECTION 4. No Rights as Holder of Warrant Shares Conferred by
Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
thereby shall entitle the Holder or any beneficial owner thereof to any of the
rights of a holder or beneficial owner of Warrant Shares.
SECTION 5. Enforcement of Rights. Notwithstanding any of the
provisions of this Agreement, any Holder of a Warrant Certificate or the
beneficial owner of any Warrant evidenced thereby, without the consent of the
Warrant Agent, the Holder of any other Warrant Certificate or any other party,
may, in its own behalf and for its own benefit, enforce, and may
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institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, its right to exercise its
Warrants in the manner provided in the Warrant Certificate evidencing such
Warrants and in this Agreement.
SECTION 6. Terms of Warrants; Exercise of Warrants.
6.1. Exercise of Warrants.
Subject to Section 6.4 hereof, each Holder shall have the right to
exercise all or any portion of its Warrants at any time (or from time to time)
prior to 5:00 p.m., New York City time, on any Business Day on or prior to the
Expiration Date and, upon exercise of such Warrants in compliance with the
procedures set forth in Section 6.2, to receive from the Company the number of
fully paid and nonassessable Warrant Shares which the Holder is entitled to
receive in accordance with the terms of such Warrants and this Agreement of such
Warrants; provided, however, that a Warrant may be exercised only in whole and
not in part.
Each Warrant not exercised prior to 5:00 p.m., New York City time,
on the Expiration Date shall become void and all rights thereunder and all
rights in respect thereof under this Agreement shall cease as of such time.
6.2. Procedures.
In order to exercise all or any of the Warrants represented by a
Warrant Certificate, prior to 11:00 a.m., New York City time, on an Exercise
Date, (i)(A) in the case of Definitive Warrants, the Holder thereof must
surrender for exercise the Warrant Certificate to the Company at the office of
the Warrant Agent at its New York corporate trust office or (B) in the case of a
beneficial interest in the Global Warrant, the exercising Holder's Participant
whose name appears on a securities position listing of the Depositary as the
recordholder of such beneficial interest must comply with the Applicable
Procedures relating to the exercise of such beneficial interest in the Global
Warrant, (ii) the exercising Holder's Participant or the Holder thereof, as
applicable, must deliver to the Company at the office of the Warrant Agent an
election to purchase Warrant Shares in the form set forth on the reverse of the
Warrant Certificate duly completed and signed, which signature shall be
medallion guaranteed by an institution which is a member of a Securities
Transfer Association recognized signature guarantee program and (iii) the
exercising Holder's Participant, the Holder thereof or, as contemplated by
Section 6.3 hereof, the Remarketing Agent, as applicable, must present payment
to the Warrant Agent for the account of the Company of the Exercise Price Per
Share for the number of Warrant Shares in respect of which such Warrants are
being exercised. For purposes of the foregoing, the Warrant Agent is entitled to
conclusively rely on written instructions received from the Depositary regarding
any exercise of Warrants evidenced by a Global Warrant.
Payment of the Exercise Price Per Share shall be made in cash
(including the automatic application of a portion of the proceeds of any
Remarketing of Preferred Securities contemplated in Section 6.3 hereof) by wire
transfer to an account designated by the Company or by certified or official
bank check, payable to the order of the Company in United States dollars.
Subject to Section 6.4 hereof, upon satisfaction of the conditions
specified in this Section, the Warrant Agent shall thereupon promptly notify the
Company or the transfer agent
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for the Common Stock (the "Transfer Agent"), and the Company shall promptly
transfer to the Holder of the applicable Warrant Certificate a certificate or
certificates for the requisite number of Warrant Shares or other securities or
property (including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, such name or names as may be
directed in writing by the Holder, and shall deliver such certificate or
certificates representing the Warrant Shares and any other securities or
property (including any money) to the person or persons entitled to receive the
same, together with an amount in cash in lieu of any fraction of a share as
provided in Section 13 hereof. Any such certificate or certificates representing
the Warrant Shares 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 the conditions specified in this Section
are satisfied.
If less than all the Warrants evidenced by a Definitive Warrant are
exercised, such Definitive Warrant shall be surrendered and a new Definitive
Warrant of the same tenor and for the number of Warrants which were not
exercised shall be executed by the Company and delivered to the Warrant Agent
and the Warrant Agent shall countersign the new Definitive Warrant, registered
in such name or names as may be directed in writing by the Holder, and shall
deliver the new Definitive Warrant to the Person or Persons entitled to receive
the same. If less than all the Warrants evidenced by the Global Warrant are
exercised, the Warrant Agent shall make such notations on the "Schedule of
Exchanges of Interests of Global Warrant" to the Global Warrant or otherwise
comply with the Applicable Procedures to reflect the change in the number of
Warrants represented by the Global Warrant resulting from such exercise.
All Warrant Certificates surrendered upon exercise of Warrants shall
be canceled by the Warrant Agent in accordance with Section 3.7 hereof. The
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all monies received by the Warrant
Agent for the purchase of the Warrant Shares through the exercise of such
Warrants.
6.3. Reset Event.
Upon the occurrence of a Reset Event (other than a Reset Event
within the meaning of clause (B) of the definition of a Trading Reset Event in
Section 1 of this Agreement), if any, the Company shall select a date, not less
than 30 nor more than 60 days after the date notice is given to the Holders and
not more than 70 days after the occurrence of such Reset Event, on which the
modifications to the terms of the Warrants specified in the immediately
succeeding paragraph shall become effective (the "Reset Date"). In addition,
upon the occurrence of a Reset Event within the meaning of clause (B) of the
definition of a Trading Reset Event in Section 1 of this Agreement, the "Reset
Date" shall automatically be the date 15 Business Days prior to the Expiration
Date. The Company shall give the Holders and the Warrant Agent notice of the
Reset Date relating to a Reset Event not less than 30 nor more than 60 days
prior to such Reset Date.
The following modifications to the terms of the Warrants shall
become effective as of the Reset Date, if any: (i) the Expiration Date shall be
accelerated to the date 15 Business Days following the Reset Date, except in the
case of a Reset Event within the meaning of clause (B) of the definition of a
Trading Reset Event in Section 1 of this Agreement and (ii) the Warrant
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Exercise Price on the Reset Date shall be reduced to the Accreted Liquidation
Amount of a Preferred Security as of the Reset Date, plus accumulated
distributions, if any, on a Preferred Security to the Reset Date.
Notwithstanding the foregoing, there shall not be a "Reset Date" if
(i) in the case of a Trading Reset Event, an Event of Default under the Trust
Agreement or a deferral of distributions to holders of the Preferred Securities
has occurred and is continuing; (ii) in the case of a Trading Reset Event, the
closing price of the Common Stock on the New York Stock Exchange (or, if not
then listed on such exchange, any other national securities exchange) as of the
fifth Business Day preceding the Reset Date or as of the Reset Date is less than
the Exercise Price Per Share (determined without regard to the Reset Date);
(iii) in the case of a Trading Reset Event, (A) the Shelf Registration Statement
is not effective under the Securities Act or (B) the Company shall have notified
the Warrant Agent, which notice shall not have been withdrawn by it, that it is
unable as of the Reset Date to deliver a then current Prospectus to exercising
Holders; or (iv) there is a Failed Remarketing.
If (i) the Company fails to specify a Reset Date when required to do
so or a Reset Date is deemed not to have occurred, (ii) a holder of Preferred
Securities has not satisfied the conditions for Remarketing such Preferred
Securities that are contemplated in the Trust Agreement or (iii) Holders
exercising their Warrants do not hold such Warrants as part of complete CRESTS
Unit on the Reset Date (i.e. the Warrant and Preferred Security components of a
CRESTS Unit have been separated), then Holders of Warrants will be required to
tender cash in order to exercise such Warrants in accordance with the procedures
set forth in Section 6.2 hereof. If, however, (i) a Reset Date has occurred,
(ii) a Holder exercising its Warrants holds such Warrants as part of complete
CRESTS Units on the Reset Date and (iii) the Holder has satisfied the conditions
for Remarketing of the Preferred Securities held as part of such CRESTS Units
contemplated in the Trust Agreement, then the portion of the proceeds of the
Remarketing equal to the Warrant Exercise Price on the Reset Date will
automatically be applied by the Remarketing Agent to pay the Warrant Exercise
Price of the Warrants delivered to the Remarketing Agent.
6.4. Restrictions on Ability to Exercise Warrants.
The Company shall use its best efforts to (i) maintain the
effectiveness of the Shelf Registration Statement under the Securities Act, (ii)
register or qualify on or prior to the Exercise Date, unless exempt, the Warrant
Shares under the securities laws of the state of residence of the exercising
Holders and (iii) deliver a then current Prospectus on or prior to the Exercise
Date that does not include a material misstatement or omission to exercising
Holders. The Company shall deliver to the Warrant Agent a copy of the Shelf
Registration Statement and any Prospectus and any amendment or supplement
thereto as may be filed or delivered from time to time.
Warrants will not be exercisable if, on the Exercise Date, (i) the
Shelf Registration Statement is not then effective under the Securities Act,
unless the sale of the Warrant Shares upon exercise of the Warrants is exempt
from the registration requirements of the Securities Act, (ii) the Warrant
Shares are not then registered or qualified under the securities laws of the
state of residence of the exercising Holder, unless the sale of the Warrant
Shares is
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exempt under such state securities laws or (iii) the Company has notified the
Warrant Agent, which notice shall not have been withdrawn by it, that it is
unable as of the Exercise Date to deliver a then current Prospectus to
exercising Holders. If the circumstances described in clause (i), (ii) or (iii)
above occur during the 90 days immediately preceding the originally scheduled
Expiration Date, then the Expiration Date will be extended to the first date
after the originally scheduled Expiration Date for which the Company has
maintained the effectiveness of the Shelf Registration Statement under the
Securities Act (and the registration or qualification of the shares of Common
Stock under the applicable state securities laws) and made a then current
Prospectus available to exercising Holders for a 90-day period.
No Warrant that is part of a CRESTS Unit will be exercisable until
the components of such CRESTS Unit have been separated in accordance with the
terms of the Unit Agreement, except that a Warrant that is a component of a
CRESTS Unit may be exercised in accordance with a Remarketing of the Preferred
Security that is also a component of such CRESTS Unit.
SECTION 7. Payment of Taxes. The Company shall pay any and all stamp
or other taxes, duties or governmental charges attributable to the issuance or
transfer of Warrant Certificates or Warrant Shares upon the exercise of
Warrants; provided that the Company shall not be required to pay any taxes,
duties or governmental charges which may be payable in respect of Warrant Shares
in a name other than that of the Holder of the surrendered Warrant Certificate.
SECTION 8. Reservation of Warrant Shares.
8.1. Number of Warrant Shares
The Company shall at all times reserve and keep available, free from
preemptive or other similar rights, out of the aggregate of its authorized but
unissued Common Stock or its authorized and issued Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of Common
Stock which may then be deliverable upon the exercise of all outstanding
Warrants. The Transfer Agent will be irrevocably authorized and directed at all
times to reserve such number of authorized shares of Common Stock as shall be
required for such purpose. The Company shall supply the Transfer Agent with duly
executed certificates for the Warrant Shares for such purpose and shall provide
or otherwise make available any cash which may be payable as provided in Section
13 hereof. The Company shall furnish such Transfer Agent a copy of all notices
transmitted to Holders of the Warrants pursuant to Section 14 hereof.
8.2. Additional Corporate Action
Before taking any action which would cause an adjustment pursuant to
Sections 10 or 12 hereof to reduce the Exercise Price Per Share below the then
par value (if any) of the Warrant Shares, the Company will take any corporate
action which may, in the opinion of its counsel (which may be counsel employed
by the Company), be necessary in order that the Company may duly and validly
issue fully paid and nonassessable Warrant Shares at the Exercise Price Per
Share as so adjusted.
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8.3. Covenants
The Company covenants that all Warrant Shares issuable upon exercise
of Warrants in accordance with the terms of this Agreement will, upon such
issuance, be duly and validly issued, fully paid and nonassessable, free of
preemptive or other similar rights and free from all taxes, liens, charges and
security interests with respect to the issuance thereof (other than any created
by the Holders).
SECTION 9. Obtaining Stock Exchange Listings. The Company will from
time to time take all action necessary so that the Warrant Shares, immediately
upon their issuance upon the exercise of Warrants, will be listed on each
principal securities exchange and market (including, without limitation, the New
York Stock Exchange) within the United States of America, if any, on which other
shares of Common Stock are then listed. The Company will obtain and keep all
required permits and records in connection with such listing.
SECTION 10. Adjustment of Exercise Price Per Share, Warrant Exercise
Price and Number of Warrant Shares Issuable. The number and kind of Warrant
Shares issuable upon the exercise of Warrants, the Exercise Price Per Share and
the Warrant Exercise Price shall be subject to adjustment from time to time as
follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or other equity
interests of the Company), (B) subdivide or split its outstanding shares of
Common Stock into a greater number of shares, (C) combine its outstanding shares
of Common Stock into a smaller number of shares or (D) issue by reclassification
of its shares of Common Stock any shares of capital stock of the Company, the
Exercise Price Per Share in effect immediately prior to such action and, if
applicable, the amount and/or type of security issuable upon any exercise of a
Warrant shall be adjusted so that the Holder of any Warrant thereafter exercised
shall be entitled to receive upon payment of the Warrant Exercise Price the kind
and amount of shares of capital stock of the Company which such Holder would
have owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this paragraph shall
become effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, split, combination or reclassification. If, as a result of an
adjustment made pursuant to this paragraph, the Holder of any Warrant thereafter
exercised shall become entitled to receive shares of two or more classes of
capital stock of the Company, the Board of Directors of the Company (whose
determination shall be conclusive) shall determine the allocation of the
adjusted Warrant Exercise Price between or among shares of such classes of
capital stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in paragraph (a) above and
other than a change in par value, or from par value to no par value, or from no
par value to par value or as a result of a subdivision, split or combination),
or in case of any consolidation or merger of the Company with or into another
Person (other than a merger in which the Company is the continuing corporation
and which does not result in any reclassification or change of the then
outstanding shares of Common Stock or
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other capital stock issuable upon exercise of the Warrants), or in case of any
sale, conveyance or transfer to another Person of the property of the Company as
an entirety or substantially as an entirety, except any such transaction covered
by paragraph (d) below, then, as a condition of such reclassification, change,
consolidation, merger, sale, conveyance or transfer, the Company or such a
successor or purchasing Person, as the case may be, shall forthwith make lawful
and adequate provision whereby the Holder of all Warrants then outstanding shall
have the right thereafter to receive upon exercise thereof the kind and amount
of shares of stock or other securities or property receivable upon such
reclassification, change, consolidation, merger, sale, conveyance or transfer by
a holder of the number of shares of Common Stock issuable upon exercise of such
Warrants immediately prior to such reclassification, change, consolidation,
merger, sale, conveyance or transfer. Such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments specified in this Agreement. The above provisions of this paragraph
(b) shall similarly apply to successive reclassifications and changes of shares
of Common Stock and to successive consolidations, mergers, sales, conveyances or
transfers.
(c) Distribution of Options or Convertible Securities. In the event
that (x) the Company shall issue, sell, distribute or otherwise grant in any
manner (including by assumption) to all holders of the Common Stock any rights,
warrants or options entitling such holders to subscribe for or purchase Common
Stock or any stock or securities convertible into or exercisable or exchangeable
for Common Stock (any such rights, warrants or options being herein called
"Options" and any such convertible, exercisable or exchangeable stock or
securities being herein called "Convertible Securities") (other than a dividend
or distribution subject to paragraph (a) above), whether or not such Options or
the conversion, exercise or exchange rights are then vested and (y) the price
per share at which Common Stock is issuable upon the exercise of such Options or
upon the conversion, exercise or exchange of such Convertible Securities
(determined by dividing (i) the aggregate amount, if any, received or receivable
by the Company as consideration for the issuance, sale, distribution or granting
of such Options or such Convertible Securities, plus the minimum aggregate
amount (determined without regard to possible adjustments that are contingent
upon future events) of additional consideration, if any, payable to the Company
upon the exercise of all such Options or upon conversion, exercise or exchange
of all such Convertible Securities, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion, exercise or exchange of all
such Convertible Securities, by (ii) the total maximum number of shares
(determined without regard to possible adjustments that are contingent upon
future events) of Common Stock issuable upon the exercise of all such Options or
upon the conversion, exercise or exchange of all such Convertible Securities or
upon the conversion, exercise or exchange of all Convertible Securities issuable
upon the exercise of all such Options) shall be less than the Current Market
Price per share of Common Stock on the record date for the issuance, sale,
distribution or granting of such Options or Convertible Securities (any such
event being herein called a "Distribution"), then, effective upon such
Distribution, (I) the Exercise Price Per Share shall be reduced to the price
(calculated to the nearest 1/1,000 of one cent) determined by multiplying the
Exercise Price Per Share in effect immediately prior to such Distribution by a
fraction, the numerator of which shall be the sum of (1) the number of shares of
Common Stock outstanding (exclusive of any treasury shares) immediately prior to
such Distribution multiplied by the Current Market Price per share of Common
Stock on the record date for such Distribution plus (2) the consideration, if
any, received by the Company upon such
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Distribution, and the denominator of which shall be the product of (A) the total
number of shares of Common Stock outstanding (exclusive of any treasury shares)
immediately after such Distribution multiplied by (B) the Current Market Price
per share of Common Stock on the record date for such Distribution and (II) the
number of Warrant Shares issuable upon the exercise of each Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock so issuable immediately prior to such Distribution by a fraction, the
numerator of which shall be the Exercise Price Per Share in effect immediately
prior to the adjustment required by clause (I) of this sentence and the
denominator of which shall be the Exercise Price Per Share in effect immediately
after such adjustment (for the purposes of this clause (II) without giving
effect to the provisions of Section 10(k)). Such adjustments shall be made
whenever such Options or Convertible Securities are issued, sold, distributed or
granted. Except as provided in paragraphs (l) and (m) below, no additional
adjustment of the Exercise Price Per Share shall be made upon the actual
exercise of such Options or upon conversion, exercise or exchange of the
Convertible Securities or upon the conversion, exercise or exchange of the
Convertible Securities issuable upon the exercise of such Options.
For purposes of the foregoing, the total maximum number of shares of
Common Stock issuable upon exercise of all such Options or upon conversion,
exercise or exchange of all such Convertible Securities or upon the conversion,
exercise or exchange of the total maximum amount of the Convertible Securities
issuable upon the exercise of all such Options shall be deemed to have been
issued as of the date of such Distribution and thereafter shall be deemed to be
outstanding and the Company shall be deemed to have received as consideration
therefor such price per share, determined as provided above, which shall
constitute consideration received by the Company upon such Distribution for
purposes of the foregoing calculations. For purposes of the foregoing, the total
number of shares of Common Stock issuable upon conversion, exercise or exchange
of outstanding Options or Convertible Securities shall be deemed outstanding
before and after such Distribution if the conversion, exercise or exchange price
with respect thereto is less than the Current Market Value.
(d) Other Issuances of Common Stock, Options or Convertible Securities.
Upon any issuance of Common Stock, Options or Convertible Securities as to which
paragraphs (a), (b) and (c) above are not applicable, in the event that at any
time or from time to time the Company shall issue (i) shares of Common Stock
(subject to the provisions set forth below), (ii) Options (provided, however,
that no adjustment shall be made upon the exercise of such Options) or (iii)
Convertible Securities (provided, however, that no adjustment shall be made upon
the conversion, exchange or exercise of such Convertible Securities (other than
issuances specified in (i), (ii) or (iii) which are made as the result of
antidilution adjustments in such securities)) at a price per share (determined,
in the case of Options and Convertible Securities, as provided in clause (y) of
paragraph (c) above) at the date of such issuance that is less than the then
Current Market Price per share of Common Stock, then the Warrant Shares issuable
upon the exercise of each Warrant shall be increased to a number determined by
multiplying the number of Warrant Shares theretofore issuable upon exercise of
each Warrant by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately after such sale or issuance (including
shares deemed outstanding as provided in paragraph (c) above) plus the number of
additional shares of Common Stock into or for which such securities that are
issued are convertible, exchangeable or exercisable, and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such sale or issuance (including
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shares deemed outstanding as provided in paragraph (c) above) plus the total
number of shares of Common Stock which the aggregate consideration expected to
be received by the Company (assuming the conversion, exercise or exchange of all
such Options or Convertible Securities, if any) would purchase at the then
Current Market Price per share of Common Stock, and subject to paragraph (k)
below, the Exercise Price Per Share shall be adjusted to a number determined by
dividing the Exercise Price Per Share immediately prior to such date of issuance
by the aforementioned fraction; provided, however, that no adjustment to the
number of Warrant Shares issuable upon the exercise of the Warrants or to the
Exercise Price Per Share shall be made as a result of (i) the issuance of shares
of Common Stock, Options and/or Convertible Securities in bona fide public or
private offerings that are underwritten or in which a placement agent is
retained by the Company or (ii) the issuance of Options or shares of Common
Stock pursuant to any employee benefit plans approved by the Board of Directors.
Such adjustments shall be made whenever such Common Stock, Options and/or
Convertible Securities are issued. No adjustment shall be made pursuant to this
paragraph which shall have the effect of decreasing the number of Warrant Shares
issuable upon exercise of the Warrants or of increasing the Exercise Price Per
Share, except by operation of paragraph (l) or (m) below. For purposes of this
paragraph only, any issuance of Common Stock, Options or Convertible Securities
in exchange for or otherwise in connection with the bona fide acquisition of
property or assets of any kind (excluding any such exchange exclusively for
cash) of any Person at a price per share determined by the Board of Directors to
be equal to the fair market value thereof at the time an agreement in principle
is reached or at the time a definitive agreement is entered into shall be deemed
to have been made at a price per share equal to the Current Market Price per
share at the record date with respect to such issuance if such definitive
agreement is entered into within 90 days of the date of such agreement in
principle.
(e) Distribution of Cash. In case the Company shall, by dividend or
otherwise, distribute to all holders of the Common Stock cash (other than
regular quarterly cash dividends, as to which paragraph (g) below applies) in an
aggregate amount that, together with (i) the aggregate amount of any
distributions to all holders of the Common Stock (other than regular quarterly
cash dividends) made exclusively in cash within the 12 months preceding the date
of payment of such distribution and (ii) the aggregate of any cash plus the fair
market value, as of the expiration of the applicable tender or exchange offer
referred to in paragraph (f) below (as determined by the Board of Directors,
whose determination shall be conclusive), of consideration payable in respect of
any tender or exchange offer by the Company or any subsidiary of the Company for
all or any portion of the Common Stock expiring within the 12 months preceding
the date of payment of such distribution made, exceeds 15% of the Aggregate
Market Capitalization on the date for the determination of holders of shares of
Common Stock entitled to receive such distribution, then, and in each such case,
immediately after the close of business on such date for determination, then (A)
the Exercise Price Per Share shall be reduced to the price (calculated to the
nearest 1/1,000 of one cent) determined by multiplying the Exercise Price Per
Share in effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by a
fraction, the numerator of which shall be equal to the Current Market Price per
share of the Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the combined amount distributed or payable
in the transactions as described above and (y) the number of shares of Common
Stock outstanding on such date for determination, and the denominator of which
shall be equal to the Current Market Price per share of the Common Stock on such
date for determination and (B) the
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number of Warrant Shares issuable upon exercise of each Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock so issuable immediately prior to such distribution by a fraction, the
numerator of which shall be the Exercise Price Per Share in effect immediately
prior to the adjustment required by clause (A) of this sentence and the
denominator of which shall be the Exercise Price Per Share in effect immediately
after such adjustment (for the purposes of this clause (B) without giving effect
to the provisions of paragraph (k)).
(f) Tender Offers or Exchange Offers. In case a tender or exchange offer
made by the Company or any subsidiary of the Company for all or any portion of
the Common Stock shall expire and such tender or exchange offer (as amended upon
the expiration thereof) shall require the payment to stockholders (based upon
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares (as defined below) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive) that, together with (i) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive), as of the expiration of
such tender or exchange offer, of consideration payable in respect of any other
tender or exchange offer (other than consideration payable in respect of any
odd-lot tender offer) by the Company or any subsidiary of the Company for all or
any portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer and (ii) the aggregate amount of any
distributions (other than regular quarterly cash dividends) to all holders of
the Common Stock made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer exceeds 15% of the Aggregate Market
Capitalization as of the last time (the "Expiration Time") tenders could have
been made pursuant to such tender or exchange offer (as it may be amended),
then, and in each such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, then (A) the Exercise Price Per Share
shall be reduced to the price (calculated to the nearest 1/1,000 of one cent)
determined by multiplying the Exercise Price Per Share in effect immediately
prior to the close of business as of the Expiration Time by a fraction, the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock as of the Expiration Time less an amount equal to the quotient of
(x) the combined amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders in the
transactions as described above and (y) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time, and the
denominator of which shall be equal to the Current Market Price per share of the
Common Stock as of the Expiration Time (it being understood that the shares
accepted in the tender or exchange offer, up to any specified maximum, are
referred to herein as the "Purchased Shares") and (B) the number of Warrant
Shares issuable upon exercise of each Warrant shall be increased to a number
determined by multiplying the number of shares of Common Stock so issuable
immediately prior to the Expiration Time by a fraction, the numerator of which
shall be the Exercise Price Per Share in effect immediately prior to the
adjustment required by clause (A) of this sentence and the denominator of which
shall be the Exercise Price Per Share in effect immediately after such
adjustment (for the purposes of this clause (B) without giving effect to the
provisions of paragraph (k)).
(g) Dividends and Distributions. In the event the Company shall distribute
to all holders of the Common Stock any dividend or other distribution of cash,
evidences of its indebtedness,
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other securities or other properties or assets (in each case other than (i)
dividends payable in Options or Convertible Securities or rights to acquire the
same and (ii) any cash dividend that, when added to all other cash dividends
paid in the same fiscal year prior to the declaration date of such dividend
(excluding any such other dividend included in a previous adjustment of the
Exercise Price Per Share pursuant to paragraphs (e) or (f) above or this
paragraph (g)), does not exceed the Company's retained earnings as of the end of
the immediately preceding fiscal period), then (A) the Exercise Price Per Share
shall be decreased to a price (calculated to the nearest 1/1,000 of one cent)
determined by multiplying the Exercise Price Per Share then in effect by a
fraction, the numerator of which shall be the Current Market Price per share of
Common Stock on the record date for such distribution less the sum of (X) the
cash portion, if any, of such distribution per share of Common Stock outstanding
(exclusive of any treasury shares) on the record date for such distribution plus
(Y) the then fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be conclusive) per share of
Common Stock outstanding (exclusive of any treasury shares) on the record date
for such distribution of that portion, if any, of such distribution consisting
of evidences of indebtedness, other securities, other properties or other
assets, and the denominator of which shall be the Current Market Price per share
of Common Stock on the record date for such distribution and (B) the number of
Warrant Shares issuable upon the exercise of each Warrant shall be increased to
a number determined by multiplying the number of shares of Common Stock so
issuable immediately prior to the record date for such distribution by a
fraction, the numerator of which shall be the Exercise Price Per Share in effect
immediately prior to the adjustment required by clause (A) of this sentence and
the denominator of which shall be the Exercise Price Per Share in effect
immediately after such adjustment (for the purposes of this clause (B) without
giving effect to the provisions of paragraph (k)). The adjustments required by
this paragraph shall be made whenever any such distribution occurs retroactive
to the record date for the determination of stockholders entitled to receive
such distribution.
(h) Business Combination; Liquidation. In the event of (A) a business
combination where consideration to the holders of Common Stock in exchange for
their shares is payable solely in cash or (B) the dissolution, liquidation or
winding-up of the Company, Holders shall be entitled to receive, upon surrender
of their Warrant Certificates, distributions on an equal basis with the holders
of Common Stock or other securities, issuable upon exercise of the Warrants, as
if the Warrants had been exercised immediately prior to such event, less the
Warrant Exercise Price. Upon receipt of such payment, if any, the Warrants will
expire and the rights of the Holders will cease. In case of any combination
described in this paragraph (h), the surviving or acquiring Person and, in the
event of any dissolution, liquidation or winding-up of the Company, the Company
shall deposit promptly with the Warrant Agent the funds, if any, necessary to
pay to the Holders of the Warrants the amounts to which they are entitled as
described above. After such funds and the surrendered Warrant Certificates are
received, the Warrant Agent is required to deliver a check in such amount as is
appropriate, as instructed by the Company (or, in the case of consideration
other than cash, such other consideration as is appropriate), to such Person or
Persons as it may be directed in writing by the Holders surrendering such
Warrants.
(i) Certain Distributions. If the Company shall pay a dividend payable in
Options or Convertible Securities or make any other distribution payable in
Options or Convertible Securities, then, for purposes of paragraph (c) above,
such Options or Convertible Securities shall be deemed to have been issued or
sold without consideration.
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(j) Consideration Received. If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for consideration
other than cash, the amount of the consideration other than cash received by the
Company in respect thereof shall be deemed to be the then fair market value of
such consideration (as determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive). If any Options shall be
issued in connection with the issuance and sale of other securities of the
Company, together comprising one integral transaction in which no specific
consideration is allocated to such Options by the parties thereto, such Options
shall be deemed to have been issued for such consideration as is established in
good faith by the Board of Directors of the Company.
(k) Deferral of Certain Adjustments. No adjustment to the Exercise Price
Per Share (including the related adjustment to the number of Warrant Shares
issuable upon the exercise of each Warrant) shall be required hereunder unless
such adjustment, together with other adjustments carried forward as provided
below, would result in an increase or decrease of at least one percent of the
Exercise Price Per Share; provided that any adjustments which by reason of this
paragraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. No adjustment need be made for a change in
the par value of the Common Stock. All calculations under this Section 10 shall
be made to the nearest 1/1,000 of one cent or to the nearest 1/1,000 of a share,
as the case may be.
(l) Changes in Options and Convertible Securities. If the exercise price
provided for in any Options referred to in paragraphs (c) and (d) above, the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraphs (c) and (d) above, or the rate
at which any Convertible Securities referred to in paragraphs (c) and (d) above
are convertible into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment pursuant to this
Section 10), the Exercise Price Per Share then in effect and the number of
Warrant Shares issuable upon the exercise of each Warrant shall forthwith be
readjusted (effective only with respect to any exercise of any Warrant after
such readjustment) to the Exercise Price Per Share and number of Warrant Shares
so issuable that would then be in effect had the adjustment made upon the
issuance, sale, distribution or granting of such Options or Convertible
Securities been made based upon such changed purchase price, additional
consideration or conversion rate, as the case may be, but only with respect to
such Options and Convertible Securities as then remain outstanding.
(m) Expiration of Options and Convertible Securities. If, at any time
after any adjustment to the Exercise Price Per Share and the number of Warrant
Shares issuable upon the exercise of each Warrant shall have been made pursuant
to paragraph (c), (d) or (g) above or this paragraph, any Options or conversion
rights of Convertible Securities shall have expired unexercised, the Exercise
Price Per Share and the number of Warrant Shares issuable upon the exercise of
each Warrant shall, upon such expiration, be readjusted and shall thereafter be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
shares of Common Stock deemed to have been issued in connection with such
Options or Convertible Securities were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or Convertible
Securities and (ii) such shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Company upon such exercise plus the
aggregate
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consideration, if any, actually received by the Company for the issuance, sale,
distribution or granting of all such Options or Convertible Securities, whether
or not exercised; provided that no such readjustment shall have the effect of
increasing the Exercise Price Per Share or decreasing the number of such Warrant
Shares so issuable by an amount (calculated by adjusting such increase or
decrease to account for all other adjustments made pursuant to this Section 10
following the date of the original adjustment referred to above) in excess of
the amount of the adjustment initially made in respect of the issuance, sale,
distribution or granting of such Options or Convertible Securities.
(n) Other Adjustments. The Company may at any time reduce the Exercise
Price Per Share for any period of time (but not less than 20 Business Days) when
deemed appropriate by the Board of Directors of the Company, provided that the
Exercise Price Per Share may not be reduced to an amount that is less than the
par value of the Common Stock. In the event that at any time, as a result of an
adjustment made pursuant to any provision of this Section 10, the Holders shall
become entitled to receive any securities of the Company other than shares of
Common Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Exercise Price Per Share applicable to such
exercise 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 of Common Stock contained herein.
(o) Exercise Price Per Share; Warrant Exercise Price. Upon any adjustment
of the Warrant Exercise Price pursuant to Section 6.3, the Exercise Price Per
Share shall be adjusted so as to equal the adjusted Warrant Exercise Price
divided by the number of shares of Common Stock issuable upon exercise of a
Warrant. Upon any adjustment of the Exercise Price Per Share pursuant to
paragraph (n) above, the Warrant Exercise Price shall be adjusted to equal the
Exercise Price Per Share multiplied by the number of shares of Common Stock
issuable upon exercise of a Warrant. Other adjustments to the Exercise Price Per
Share pursuant to this Section 10, together with the related adjustment in the
number of Warrant Shares issuable upon exercise of a Warrant, will result in no
adjustment to the Warrant Exercise Price.
SECTION 11. Statement on Warrants. Irrespective of any adjustment in
the number or kind of shares issuable upon the exercise of the Warrants,
Warrants theretofore or thereafter issued may continue to express the same price
and number and kind of shares initially issuable upon exercise pursuant to this
Agreement as are stated in the initially issued Warrants.
SECTION 12. No Dilution or Impairment; Capital and Ownership
Structure. If any event shall occur as to which the provisions of Section 10
hereof are not strictly applicable but the failure to make any adjustment would
adversely affect the purchase rights represented by the Warrants so as to be
contrary to the essential intent and principles of such Section, then, in each
such case, the Company shall appoint an investment banking firm of recognized
national standing which does not have a direct or material indirect financial
interest in the Company or any of its subsidiaries and which has not been, and,
at the time it is called upon to give independent financial advice to the
Company, is not (and none of its directors, officers, employees, affiliates or
stockholders are) a promoter, director or officer of the Company or any of its
subsidiaries, to give their opinion that as to what adjustment, if any, is
necessary to preserve, on a basis consistent with the essential intent and
principles established in Section 10 hereof, the purchase rights represented by
the Warrants. Upon receipt of such opinion, the
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Company will promptly mail a copy thereof to the holders of the Warrants and
shall make any adjustment described therein.
The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of the Warrants against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will take all such action as may be necessary or appropriate in
order that the Company may duly and validly issue fully paid and nonassessable
shares of Common Stock upon the exercise of the Warrants from time to time
outstanding and (b) will not take any action which results in any adjustment of
the Exercise Price Per Share if the total number of Warrant Shares issuable
after the action upon the exercise of all of the Warrants would exceed the total
number of shares of Common Stock then authorized by the Company's certificate of
incorporation and available for the purposes of issue upon such exercise.
SECTION 13. Fractional Interest. The Company shall not be required
to issue fractional shares of Common Stock upon the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full shares of Common Stock which shall be
issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock issuable upon exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section, be issuable upon the exercise of any Warrant (or
specified portion thereof), the Company shall direct the Transfer Agent to pay
an amount in cash, calculated by the Transfer Agent, to equal the then Current
Market Price per share multiplied by such fraction computed to the nearest whole
cent. The Holders, by their acceptance of the Warrant Certificates, expressly
waive any and all rights to receive any fraction of a share of Common Stock or a
stock certificate representing a fraction of a share of Common Stock.
SECTION 14. Notices to Warrant Holders; No Rights as Shareholders.
Upon any adjustment of the Exercise Price Per Share and/or the Warrant Exercise
Price in accordance with the terms of this Agreement, the Company shall promptly
thereafter (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of nationally recognized standing selected by
the Board of Directors of the Company (who may be the regular auditors of the
Company) setting forth the Exercise Price Per Share and/or the Warrant Exercise
Price after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment, upon exercise of a Warrant and payment of the Warrant Exercise
Price, which certificate, absent manifest error, shall be conclusive evidence of
the correctness of the matters set forth therein and (ii) cause to be given to
each of the Holders of the Warrants at their addresses appearing in the register
maintained by the Warrant Registrar written notice of such adjustment by
first-class mail, postage prepaid. The Warrant Agent shall be entitled to rely
on the above-referenced accountant's certificate and shall be under no duty or
responsibility with respect to any such certificate, except to make the same
available to any Holder for inspection during reasonable business hours. The
Warrant Agent shall not at any time
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be under any duty or responsibility to any Holder to determine whether any facts
exist that may require any adjustment of the number of shares of Common Stock or
other stock or property issuable upon exercise of the Warrants, the Exercise
Price Per Share or the Warrant Exercise Price, 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 or the validity or value (or the kind or amount) of
any Warrant Shares or other stock or property which may be issuable upon
exercise of the Warrants. The Warrant Agent shall not be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any Warrant Shares or stock certificates or other common stock or property upon
the exercise of any Warrant.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or securities convertible into or
exercisable for shares of Common Stock or of any other subscription rights
or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of indebtedness, shares of capital
stock, cash or other assets of the Company (other than cash dividends or
other cash distributions payable out of retained earnings and other than
those rights, options and warrants referred to in clause (a) above); or
(c) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the sale, conveyance or transfer of the properties and assets of the
Company as an entirety or substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par
value, or from no par value to par value), or a tender offer or exchange
offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) of the occurrence of a Reset Event; or
(f) the Company proposes to take any action not referred to above
that would require an adjustment of the Exercise Price Per Share or the
Warrant Exercise Price or the number of Warrant Shares in accordance with
the terms of this Agreement;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the Holders of the Warrants at their addresses appearing
in the register maintained by the Warrant Registrar, at least 20 calendar days
prior to the applicable record date or other applicable determination date, by
first class mail, postage prepaid, a written notice stating (i) the date as of
which the holders of record of shares of Common Stock entitled to receive any
such distributions are to be determined or (ii) the date on which any such
reclassification, consolidation, merger, sale, conveyance, transfer,
dissolution, liquidation or winding up, or the Reset Date, as the case may be,
is expected to become effective or consummated, and the date as of which it is
expected
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that holders of shares of Common Stock shall be entitled to exchange such shares
for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, sale, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 14 or any defect therein shall not affect the legality or
validity of the proceedings described in this Section.
SECTION 15. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation or other association into which the Warrant Agent may be
merged or with which it may be consolidated, or any corporation or other
association resulting from any merger or consolidation to which the Warrant
Agent shall be a party, or any corporation or other association succeeding to
the part of the business of the Warrant Agent that includes services hereunder,
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 a successor
to the Warrant Agent under the provisions of Section 17 hereof. Any such
successor Warrant Agent shall promptly cause notice of its succession as Warrant
Agent to be mailed (by first class mail, postage prepaid) to each Holder at such
Holder's last address as shown on the register maintained by the Warrant
Registrar. In case at the time such successor to the Warrant Agent shall succeed
to the agency created by this Agreement, and in case at that time any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent; and in case at that time any of the Warrant Certificates shall
not have been countersigned, any successor to the Warrant Agent may countersign
such Warrant Certificates either in the name of the predecessor Warrant Agent or
in the name of the successor to the Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates 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 Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 16. 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:
(a) The statements contained herein and in the Warrant Certificates
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 (including the Warrant Agent's
countersignature) or to be taken by it.
(b) 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 Warrant Certificates to be complied with by the Company.
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(c) The Warrant Agent may consult at any time with counsel of its
own selection (who may be counsel for 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 so
long as taken, suffered or omitted in good faith and in accordance with the
opinion or the advice of such counsel.
(d) Before the Warrant Agent acts or refrains from acting with
respect to the Warrants, it may require an officer's certificate or an opinion
of counsel, or both, from the Company. The Warrant Agent may conclusively rely
upon, and shall incur no liability or responsibility to the Company or to any
Holder of any Warrant for, any action taken in reliance on any Warrant,
certificate of shares, notice, resolution, waiver, consent, order, certificate,
or other paper of the Company, document or instrument (whether in its original
or facsimile form) believed by it in good faith to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent such compensation
as shall be agreed upon from time to time for all services rendered by the
Warrant Agent in the execution of this Agreement, to reimburse the Warrant Agent
for all expenses, taxes, duties and governmental charges and other charges of
any kind and nature reasonably incurred by the Warrant Agent in the execution of
this Agreement and to indemnify the Warrant Agent and save it harmless against
any and all liabilities, claims, damages, losses and expenses (including taxes
other than taxes based on the income of the Warrant Agent and judgments,
reasonable costs and counsel fees and expenses), for anything done or omitted by
the Warrant Agent in the execution of this Agreement or arising out of or in
connection with its performance of its obligations or duties under this
Agreement, except to the extent such liabilities are attributable to the Warrant
Agent's negligence, bad faith or willful misconduct. The Warrant Agent shall
notify the Company promptly of any claim for which it may seek indemnity;
provided that the failure by the Warrant Agent to so notify the Company shall
not relieve its obligations hereunder. The Company shall defend any such claim
and the Warrant Agent shall cooperate in the defense. The Warrant Agent may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel only if counsel for the Company has interests which conflict with
those of the Warrant Agent and, if so, counsel selected by the Warrant Agent
must be reasonably satisfactory to the Trust. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
(f) 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 security and indemnity reasonably satisfactory to it 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 is necessary, whether with
or without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrant Certificates 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 of the Warrants, as their respective rights or interests may
appear.
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(g) Nothing in this Agreement shall prevent the Warrant Agent, or
any stockholder, director, officer or employee of the Warrant Agent, from
buying, selling or dealing in any of the Warrants or other securities of the
Company or becoming pecuniarily interested in any transaction in which the
Company may be interested, or contracting with or lending 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.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own negligence, bad faith
or willful misconduct.
(i) The Warrant Agent shall not be accountable with respect to
whether any Warrant Shares or other stock or property issuable upon exercise of
the Warrants will, when issued, be validly issued and fully paid and
nonassessable and makes no representation with respect thereto.
(j) The Warrant Agent undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Warrant
Agent.
(k) The Warrant Agent may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Warrant Agent and conforming to the
requirements of this Agreement; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Warrant Agent, the Warrant Agent shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Agreement.
(l) The Warrant Agent shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement.
(m) The Warrant Agent shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority of the number of the then outstanding
Warrants (excluding Warrants held by the Company or any of its Affiliates)
relating to the time, method and place of conducting any proceeding for any
remedy available to the Warrant Agent, or exercising any trust or power
conferred upon the Warrant Agent, under this Agreement with respect to the
Warrants.
(n) 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 any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(o) The Warrant Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice,
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request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document.
(p) The Warrant Agent may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.
(q) The Warrant Agent shall not be deemed to have notice of any
default under this Agreement unless a Responsible Officer of the Warrant Agent
has actual knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Warrant Agent at the office of the
Warrant Agent.
(r) The rights, privileges, protections, immunities and benefits
given to the Warrant Agent, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Warrant Agent in
each of its capacities hereunder.
(s) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Warrant Agent shall be subject to the provisions of
this Section.
SECTION 17. Resignation and Removal of Warrant Agent; Appointment of
Successor. No resignation or removal of the Warrant Agent and no appointment of
a successor Warrant Agent shall become effective until the acceptance of
appointment by the successor Warrant Agent as provided herein. The Warrant Agent
may resign its duties and be discharged from all further duties and liability
hereunder (except liability arising as a result of the Warrant Agent's own
negligence, bad faith or willful misconduct) after giving written notice to the
Company. The Company may remove the Warrant Agent upon written notice, and the
Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as aforesaid. The Warrant Agent shall,
at the Company's expense, cause to be mailed (by first class mail, postage
prepaid) to each Holder of a Warrant at his last address as shown on the
register maintained by the Warrant Registrar a copy of said notice of
resignation or notice of removal, as the case may be. Upon such resignation or
removal, the Company shall appoint in writing a new Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 calendar days
after it has been notified in writing of such resignation by the resigning
Warrant Agent or after such removal, then the resigning Warrant Agent or the
Holder of any Warrant may at the expense of the Company apply to any court of
competent jurisdiction for the appointment of a new Warrant Agent. Any new
Warrant Agent, whether appointed by the Company or by such a court, shall be a
corporation or other association doing business under the laws of the United
States or any state thereof, in good standing and having a combined capital and
surplus of not less than $50,000,000. The combined capital and surplus of any
new Warrant Agent shall be deemed to be the combined capital and surplus as set
forth in the most recent annual report of its condition published prior to its
appointment, provided that such reports are published at least annually pursuant
to law or to the requirements of a federal or state supervising or examining
authority. After acceptance in writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been named herein as the original Warrant Agent,
without any further assurance, conveyance, act or deed; but if for any reason it
shall be necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of
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the Company and shall be legally and validly executed and delivered by the
resigning or removed Warrant Agent. Not later than the effective date of any
such appointment, the Company shall give notice thereof to the resigning or
removed Warrant Agent. Failure to give any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation of the Warrant Agent or the appointment of a new Warrant Agent, as
the case may be.
SECTION 18. Reports. So long as any of the Warrants remain
outstanding, but only to the extent the Company is required to send such
documents to the holders of its outstanding Common Stock, whether or not
required by the rules and regulations of the Commission, the Company shall
furnish to the Holders of the Warrants (and to the beneficial owners therein,
upon request): (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants; and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
The Company shall provide the Warrant Agent with a sufficient number
of copies of all reports filed with the Commission pursuant to the immediately
preceding paragraph that the Warrant Agent may be required to deliver to the
Holders of the Warrants under this Section.
SECTION 19. Notices. Any notice or demand authorized by this
Agreement to be given or made by the Warrant Agent or by the Holder of any
Warrant to or on the Company shall be sufficiently given or made when and if
deposited in the mail, first class or registered, postage prepaid, addressed
(until another address is filed in writing by the Company with the Warrant
Agent), as follows:
Hercules Incorporated
Hercules Plaza
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Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or
by the Holder of any Warrant to the Warrant Agent shall be sufficiently given
when and if deposited in
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the mail, first-class or registered, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company) to the
Warrant Agent as follows:
The Chase Manhattan Bank
c/o Chase Manhattan Trust Company, N.A.
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Capital Markets Fiduciary Services
Any notice pursuant to this Agreement to Holders of the Warrants by
the Company or the Warrant Agent shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each such Holder, at the address appearing in the register
maintained by the Warrant Registrar, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders as shall be made with the
approval of the Warrant Agent shall constitute a sufficient notification to such
Holders for ever purpose hereunder.
SECTION 20. Supplements and Amendments. The Company and the Warrant
Agent may from time to time amend or supplement this Agreement without the
approval of any Holder of Warrants in order to cure any ambiguity or to cure,
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not in any way
materially adversely affect the interests of any Holder of Warrants. The Company
and the Warrant Agent may amend or supplement this Agreement or the Warrants
with the consent of Holders of a majority of the number of the then outstanding
Warrants (excluding Warrants held by the Company or any of its Affiliates).
However, the consent of each Holder of a Warrant shall be required for any
amendment or supplement pursuant to which (i) the Exercise Price Per Share would
be increased, except as otherwise explicitly specified in this Agreement, (ii)
the number of Warrant Shares issuable upon exercise of Warrants would be
decreased, except as otherwise explicitly specified in this Agreement, (iii) the
Expiration Date would be accelerated, except as otherwise explicitly specified
in this Agreement, (iv) the rights of any Holder would be materially and
adversely affected or (v) the percentage of the number of then outstanding
Warrants the consent of whose Holders of which is required for amendments or
supplements would be reduced. The Warrant Agent shall be entitled to receive
and, subject to Section 16, shall be fully protected in relying upon, an
officers' certificate and opinion of counsel as conclusive evidence that any
such amendment or supplement is authorized or permitted
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hereunder, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
SECTION 21. 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 22. Termination. This Agreement shall terminate at 5:00
p.m., New York City time, on the Expiration Date.
SECTION 23. Governing Law. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO CONFLICTS OF
LAW PRINCIPLES.
SECTION 24. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Warrant
Agent and the Holders of 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 Warrants.
SECTION 25. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
HERCULES INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Warrant Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Authorized Signature
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EXHIBIT A
[Form of Warrant Certificate]
[Face]
No. W-001 Up to 350,000 Warrants
CUSIP No. ▇▇▇▇▇▇▇▇▇
Warrant Certificate
Hercules Incorporated
This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of up to 350,000 warrants as
reflected in the Schedule of Exchanges of Interests of Global Warrant attached
hereto (the "Warrants") expiring March 31, 2029 (the "Expiration Date"),
subject to adjustment as described in the Warrant Agreement, dated as of July
27, 1999 (the "Warrant Agreement"), between Hercules Incorporated, a Delaware
corporation (the "Company"), and The Chase Manhattan Bank, as Warrant Agent
(the "Warrant Agent"), to purchase common stock, without par value ($25/48
stated value) (the "Common Stock"), of the Company. Each Warrant entitles the
registered holder, upon exercise at any time (or from time to time) prior to
5:00 p.m., New York City time, on any Business Day (as defined in the Warrant
Agreement) on or prior to the Expiration Date, to purchase from the Company
23.4192 fully paid and nonassessable shares of Common Stock (the "Warrant
Shares") at the initial exercise price of $1,000 (the "Warrant Exercise Price")
(equal to $42.70 per share (the "Exercise Price Per Share")), subject to
adjustment as described in the Warrant Agreement, payable upon surrender of
this Warrant Certificate and payment of the Warrant Exercise Price at the
office or agency of the Warrant Agent, but only subject to the conditions set
forth herein and in the Warrant Agreement. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
No Warrant may be exercised after the Expiration Date and, to the
extent not exercised prior to 5:00 p.m., New York City time, on the Expiration
Date, such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent.
This Warrant Certificate shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be signed by its duly authorized representative by a manual or facsimile
signature.
Dated: July 27, 1999 HERCULES INCORPORATED
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By: __________________________________
Name:
Title:
Countersigned:
THE CHASE MANHATTAN BANK,
as Warrant Agent
By: __________________________
Authorized Signature
Dated: July 27, 1999
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[Reverse]
THIS WARRANT CERTIFICATE IS A GLOBAL WARRANT WITHIN THE MEANING OF THE WARRANT
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
WARRANT CERTIFICATE IS EXCHANGEABLE FOR WARRANTS REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN SUCH WARRANT AGREEMENT, AND NO TRANSFER OF THIS
WARRANT CERTIFICATE (OTHER THAN A TRANSFER OF THIS WARRANT CERTIFICATE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TO HERCULES INCORPORATED OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY WARRANT CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
The Warrant Agreement is hereby incorporated by reference in and made a
part of this Warrant Certificate and is hereby referred to for a description of
the rights, limitation of rights, obligations, duties and immunities thereunder
of the Warrant Agent, the Company and the Holders of the Warrants. A copy of the
Warrant Agreement may be obtained by the Holder hereof upon written request to
the Company or the Warrant Agent.
The Holder of Warrants evidenced by this Warrant Certificate may exercise
them by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with payment
of the Warrant Exercise Price at the office of the Warrant Agent, all in
accordance with the Warrant Agreement. In the event that upon any exercise of
Warrants evidenced by this Warrant Certificate the number of Warrants exercised
shall be less than the total number of Warrants evidenced by this Warrant
Certificate, there shall be issued to the Holder hereof or its assignee a new
Warrant Certificate evidencing the number of Warrants not exercised.
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[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Any Warrant)
The undersigned hereby irrevocably elects to exercise ____________
Warrants, represented by this Warrant Certificate, to purchase __________ shares
of Common Stock and herewith tenders payment for such shares to the order of
Hercules Incorporated in the amount of $_____ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _____________________________, whose address is
_____________________________, and that such shares be delivered to
_____________________________, whose address is _____________________________.
If said number of shares is less than all of the shares of Common Stock issuable
hereunder, the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares be registered in the name of
_____________________________, whose address is _____________________________,
and that such Warrant Certificate be delivered to _____________ whose address is
_____________________________.
______________________________________
Signature
Date:
______________________________________
Signature Guaranteed
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Warrant Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Warrant
Registrar in addition to, or in
substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934,
as amended.
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SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANT
Unless otherwise specified below, the Warrants represented by this Global
Warrant shall have a zero balance.
The following exchanges of a part of this Global Warrant have been made:
Amount of Number of
increase in Warrants in this Signature of
Number of Global Warrant authorized
Date of Warrants in this following such signatory of
Exchange Global Warrant increase Warrant Agent
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