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Exhibit 4.2
Class A Warrants have been purchased by the following individuals and entities
in substantially the form attached hereto for a number of Common Shares equal
to the percentage set forth next to each name below of the sum of (i) the
Common Shares outstanding immediately following the consummation of the
Offering (including the Direct Sales, but excluding any Common Shares held by
the Global Purpose Trust) and (ii) the Common Shares issuable upon exercise or
conversion of any security outstanding immediately following the consummation
of the Offering other than the Class A Warrants, the Class B Warrants and any
options granted by the Company pursuant to its Initial Stock Option Plan:
NAME APPLICABLE PERCENTAGE
-------------------------------------- ---------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1.50000%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. 1.37593%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1.37593%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1.37593%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.78750%
American Capital Access Holdings, L.L.C. 5.25000%
Risk Capital Reinsurance Company 0.37500%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 0.33470%
The Trident Partnership, L.P. 1.12500%
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NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW, AND THEY MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS AND THE
OTHER RESTRICTIONS ON TRANSFER SET FORTH HEREIN.
--------------------
Date: August 25, 1998
CLASS A WARRANT
TO PURCHASE COMMON SHARES OF
GCA LTD.
Void after 5:00 P.M. (Bermuda Time),
September 30, 2008, as provided herein.
THIS CERTIFIES that, for value received, _____________ (the
"Warrant Holder"), or registered assigns, is entitled to purchase from GCA Ltd.
(the "Company"), a Bermuda corporation, upon the satisfaction of the conditions
stated herein and during the period (subject to Section 2 hereof) from and after
the first anniversary of the consummation of the Company's initial public
offering (the "IPO") of its common shares, par value $1.00 per share (the
"Common Shares"), to 5:00 p.m. (Bemuda Time) on September 30, 2008, a number of
fully paid and nonassessable Common Shares equal to ___% of the sum of (i) the
Common Shares outstanding immediately following the consummation of the
Company's IPO (including all Common Shares issued and sold by the Company upon
exercise of any overallotment option granted to the underwriters of the IPO and
all Common Shares issued and sold by the Company in any private placement
consummated prior to or simultaneously with the IPO, but excluding any shares
held by the Global Purpose Trust) and (ii) the Common Shares issuable upon
exercise or conversion of any security outstanding immediately following the
consummation of the IPO, except for all Class A Warrants, Class B Warrants and
any options granted by the Company pursuant to its Initial Stock Option Plan,
subject to adjustment as provided herein, at a per share purchase price equal to
the sales price to the public of a Common Share in the IPO. The Company
acknowledges receipt from the initial Warrant Holder of ______ ($ )______ in
full payment for the issuance of this Warrant.
1. Definitions. For the purpose of this Warrant:
(a) "Capital Stock" shall mean the Company's Common Shares and any
other shares of any class, or series within a class, whether
now or hereafter authorized, which
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has the right to participate in the distribution of earnings
or assets of the Company without limit as to amount or
percentage.
(b) "Extraordinary Cash Dividend" shall mean, with respect to any
consecutive 12-month period, the amount, if any, by which the
aggregate amount of all cash and non-cash dividends or
distributions on any Capital Stock occurring in such 12-month
period (or, if such Capital Stock was not outstanding at the
commencement of such 12-month period, occurring in such
shorter period during which such Capital Stock was
outstanding) exceeds on a per share basis 5% of the average of
the daily Market Prices per share of such Capital Stock over
such 12-month period (or such shorter period during which such
Capital Stock was outstanding); provided that, for purposes of
the foregoing definition, the amount of cash and non-cash
dividends paid on a per share basis will be appropriately
adjusted to reflect the occurrence during such period of any
stock dividend or distribution of shares of capital stock of
the Company or any subdivision, split, combination or
reclassification of shares of such Capital Stock.
(c) "Market Price" shall mean, per Common Share on any date
specified herein: (i) the closing price per share of the
Common Shares on such date published in The Wall Street
Journal or, if no such closing price on such date is published
in The Wall Street Journal, the average of the closing bid and
asked prices on such date, as officially reported on the
principal national securities exchange on which the Common
Shares are then listed or admitted to trading; or (ii) if the
Common Shares are not then listed or admitted to trading on
any national securities exchange but are designated as a
national market system security by the NASD, the last trading
price of the Common Shares on such date; or (iii) if there
shall have been no trading on such date or if the Common
Shares are not so designated, the average of the reported
closing bid and asked prices of the Common Shares on such date
as shown by the Nasdaq National Market or other
over-the-counter market and reported by any member firm of the
New York Stock Exchange selected by the Company; or (iv) if
none of (i), (ii) or (iii) is applicable, a market price per
share determined in such reasonable manner as may be
prescribed by the Company's Board of Directors.
(d) "Pro Rata Repurchase" shall mean any purchase of Common Shares
by the Company or by any of its subsidiaries whether for cash,
shares of Capital Stock of the Company, other securities of
the Company, evidences of indebtedness of the Company or any
other person or any other property (including, without
limitation, shares of capital stock, other securities or
evidences of indebtedness of a subsidiary of the Company), or
any combination thereof, which purchase is subject to Section
13(e) of the Securities Exchange Act of 1934, as amended, or
is made pursuant to an offer made available to all holders of
Common Shares.
(e) "Warrants" shall mean the Class A Warrants to purchase Common
Shares of the Company issued by the Company pursuant to the
Class A Warrant Purchase Agreements and any and all Warrants
which are issued in exchange or substitution
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for any outstanding Class A Warrant pursuant to the terms of
the Class A Warrant.
(f) "Warrant Price" shall mean the price per share at which Common
Shares of the Company are purchasable hereunder, as such price
may be adjusted from time to time hereunder.
(g) "Warrant Shares" shall mean the Common Shares purchasable upon
exercise of Warrants.
(h) "Additional Shares of Capital Stock" shall mean all shares of
Capital Stock issued by the Company, except:
(i) Common Shares issuable upon exercise of the Warrant;
(ii) Common Shares outstanding on the date hereof,
including all Common Shares issued to the Warrant
Holder and certain other investors on the date
hereof;
(iii) Common Shares issued pursuant to the IPO and any
concurrent private placement by the Company and
Common Shares issuable upon the exercise of warrants
issued in such concurrent private placement;
(iv) Common Shares issuable upon the exercise of options
and warrants which are outstanding on the date
hereof; and
(v) Options to purchase Common Shares granted by the
Company as an incentive for performance to the
Company's officers, directors, employees and
consultants after the date hereof, the Common Shares
issuable upon the exercise of such options, and the
Common Shares awarded to such persons as share grants
by the Company as incentive for performance after the
date hereof.
(i) "Registration Rights Agreement" shall mean the agreement so
entitled, dated August 25, 1998, between the Company and the
Warrant Holder and the other holders of Class A Warrants
providing for the registration of the Warrant Shares in
certain events.
(j) "Base Price" shall mean the greater of (x) the Warrant Price,
as adjusted from time to time as provided herein, or (y) the
Market Price as of the trading day last prior to the date on
which the Base Price is determined for purposes of this
Warrant.
2. Exercise of Warrants.
(a) This Warrant may be exercised at any time or from time to time
on or after (i) the first anniversary of the consummation of
the IPO for up to one-third of the
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number of Warrant Shares provided for on page 1 hereof, (ii)
the second anniversary of the consummation of the IPO for up
to an additional one-third of the number of Warrant Shares
provided for on page 1 hereof, and (iii) the third anniversary
of the consummation of the IPO for up to an additional
one-third of the number of Warrant Shares provided for on page
1 hereof, in each case subject to adjustment as provided in
Section 6. Subject to the foregoing, this Warrant may be
exercised at any time or from time to time in whole or in part
(but not as to fractional shares) prior to 5:00 p.m. United
States Eastern Time on September 30, 2008, at which time this
Warrant and all of the Warrant ▇▇▇▇▇▇'s rights hereunder shall
terminate, except as expressly provided herein.
Notwithstanding the foregoing, upon a Change in Control of the
Company (as defined below) this Warrant shall become
immediately exercisable for the full number of Warrant Shares
provided for on page 1 hereof. For purposes of this Section
2(a), a "Change in Control" of the Company shall be deemed to
have occurred if:
(i) Any person, including a group of persons acting in
concert, becomes the beneficial owner of shares of
the Company having 50 percent or more of the total
number of votes that may be cast for the election of
directors of the Company;
(ii) There occurs any cash tender or exchange offer for
shares of the Company, merger or other business
combination, or any combination of the foregoing
transactions, and as a result of or in connection
with any such event, persons who were directors of
the Company before the event shall cease to
constitute a majority of the board of directors of
the Company or any successor to the Company; or
(iii) The sale, conveyance or other disposition (other than
by way of merger or consolidation), in one or a
series of related transactions, of all or
substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred by reason of a change in beneficial ownership occurring in connection
with the IPO.
(b) This Warrant may be exercised at the time(s) or upon the occurrence of
the event(s) specified in Subsection 2(a) hereof by the surrender of
this Warrant, with the Purchase Agreement attached hereto as Rider A
properly completed and duly executed, at the principal office of the
Company at ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ Street, P.O. Box HM1262, ▇▇▇▇▇▇▇▇,
▇▇ FX, Bermuda, or such other location which shall at that time be the
principal office of the Company and of which the Company shall have
notified the Warrant Holder in writing (the "Principal Office"), or at
the office of its stock transfer agent, and upon payment to the Company
of the Warrant Price for the Warrant Shares to be purchased upon such
exercise. The person entitled to the Warrant Shares so purchased shall
be treated for all purposes as the holder of such shares as of the
close of business on the date of exercise and certificates for the
shares so purchased shall be delivered to the
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person so entitled within a reasonable time, not exceeding thirty (30)
days, after such exercise. Certificates representing the Warrant Shares
issued upon exercise of this Warrant shall bear the restrictive legend
set forth in Section 11 referring to the restrictions on transfer set
forth herein. Unless this Warrant has expired, a new Warrant of like
tenor and for such number of Common Shares as the holder of this
Warrant shall direct, representing in the aggregate the right to
purchase the number of Common Shares with respect to which this Warrant
shall not have been exercised, shall also be issued to the holder of
this Warrant within such time.
(c) The Warrant Price shall be payable (i) in cash or its equivalent, (ii)
in Common Shares newly acquired upon exercise of this Warrant, (iii) by
surrendering to the Company the right to purchase a number of Warrant
Shares equal to the product obtained by multiplying the number of
Warrant Shares to be purchased (including the Warrant Shares to be
surrendered) by a fraction, the numerator of which is the Warrant Price
and the denominator of which is the Market Price of the Common Shares,
or (iv) in any combination of (i), (ii) and (iii). In the event the
Warrant Price is paid, in whole or in part, with Common Shares, the
portion of the Warrant Price so paid shall be equal to the Market Price
of the Common Shares.
3. Exchange. This Warrant is exchangeable, upon its surrender by the
Warrant Holder to the Company at its Principal Office, or to the Company's stock
transfer agent at its office, for new Warrants of like tenor registered in the
Warrant Holder's name and representing in the aggregate the right to purchase
the same number of Common Shares purchasable hereunder, each of such new
Warrants to represent the right to subscribe for and purchase such number of
Common Shares as shall be designated by the Warrant Holder at the time of such
surrender.
4. Transfer. This Warrant is transferable, in whole or in part, by the
holder thereof at the Principal Office of the Company or at the office of its
stock transfer agent, in person or by duly authorized attorney, upon
presentation of this Warrant properly endorsed for transfer, the Assignment
attached hereto as Rider A duly executed, funds sufficient to pay any transfer
tax and an opinion of counsel satisfactory to the Company or no-action letters
from the Securities and Exchange Commission and any appropriate state regulatory
agencies prior to such transfer to the effect that registration under the 1933
Act and any applicable state securities law is not required in connection with
the transaction resulting in such transfer (the "Transfer Documents"); provided,
however, that no such opinion of counsel or no action letter shall be necessary
in order to effectuate a transfer in accordance with the provisions of Rule
144(k) promulgated under the 1933 Act. Each Warrant issued upon any transfer as
above provided shall bear the restrictive legend set forth in Section 11, except
that such restrictive legend shall not be required if the opinion of counsel
satisfactory to the Company or the no-action letters referred to above are to
the further effect that such legend is not required in order to establish
compliance with the provisions of the 1933 Act and any applicable state
securities law, or if the transfer is made in accordance with the provisions of
Rule 144(k) under the 1933 Act. The cost of obtaining any legal opinion or no
action letter required under this Section shall be borne by the Warrant Holder.
Within a reasonable time after receiving the Transfer Documents, not
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exceeding thirty (30) days, the Company shall execute and deliver a new Warrant
in the name of the assignee named in the Assignment and this Warrant shall be
cancelled.
5. Certain Covenants of the Company. The Company covenants and agrees
that all Common Shares which may be issued upon the exercise of this Warrant,
will, upon issuance, be duly and validly issued, fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of issue upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of Common
Shares to provide for the exercise of the rights represented by this Warrant.
The Company will, at the time of each exercise of this Warrant, upon request of
the holder thereof, acknowledge in writing its continuing obligation to afford
such holder of all rights (including, without limitation, any rights to
registration under the Registration Rights Agreement) to which such holder shall
be entitled after the exercise hereof in accordance with the terms hereof, but
the failure to make any such request, or the failure of the Company to give such
acknowledgement, shall not affect the continuing obligations of the Company in
respect of such rights.
6. Adjustment of Purchase Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Reclassification, Consolidation or Merger. At any time while
this Warrant remains outstanding and unexpired, in case of any
reclassification or change of outstanding securities of the
class issuable upon exercise of this Warrant (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 or combination of outstanding securities issuable
upon the exercise of this Warrant) or in case of any
consolidation or merger of the Company with or into another
corporation (other than a merger with another corporation in
which the Company is a continuing corporation and which does
not result in any reclassification or change, 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 or combination of outstanding securities issuable
upon the exercise of this Warrant), the Company, or such
successor corporation, as the case may be, shall, without
payment of any additional consideration therefor, execute a
new Warrant providing that the Warrant Holder shall have the
right to exercise such new Warrant (upon terms not less
favorable to the Warrant Holder than those then applicable to
this Warrant) and to receive upon such exercise, in lieu of
each Common Share theretofore issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other
securities, money or property receivable upon such
reclassification, change, consolidation or merger, by the
holder of one Common Share issuable upon exercise of this
Warrant had it been exercised immediately prior to such
reclassification, change, consolidation or merger. Such new
Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided
for in this Section 6. Notwithstanding the foregoing, in the
case of any transaction
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which pursuant to this Section 6(a) would result in the
execution and delivery by the Company of a new Warrant to the
Warrant Holder, and in which the holders of Common Shares are
entitled only to receive money or other property exclusive of
securities, then in lieu of such new Warrant being exercisable
as provided above, the Warrant Holder shall have the right, at
its sole option, to require the Company to purchase this
Warrant (without prior exercise by the Warrant Holder) at its
fair value as of the day before such transaction became
publicly known, as determined by an unaffiliated
internationally recognized accounting firm or investment bank
selected by the Warrant Holder and reasonably acceptable to
the Company. Any purchase and sale of the Warrant pursuant to
the immediately preceding sentence shall be consummated as
provided in Section 2(b), mutatis mutandis. The provisions of
this Subsection 6(a) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales and
transfers.
(b) Subdivision or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired
shall subdivide or combine its Capital Stock, the Warrant
Price shall be proportionately reduced, in case of subdivision
of such shares, as of the effective date of such subdivision,
or, if the Company shall take a record of holders of its
Capital Stock for the purpose of so subdividing, as of such
record date, whichever is earlier, or shall be proportionately
increased, in the case of combination of such shares, as of
the effective date of such combination, or, if the Company
shall take a record of holders of its Capital Stock for the
purpose of so combining, as of such record date, whichever is
earlier.
(c) Certain Dividends, Distributions and Repurchases. If the
Company at any time while this Warrant remains outstanding and
unexpired shall:
(i) Stock Dividends. Pay a dividend in shares of, or make
other distribution of shares of, its Capital Stock,
then the Warrant Price shall be adjusted, as of the
date the Company shall take a record of the holders
of its Capital Stock for the purpose of receiving
such dividend or other distribution (or if no such
record is taken, as of the date of such payment or
other distribution), to that price determined by
multiplying the Warrant Price in effect immediately
prior to such payment or other distribution by a
fraction (A) the numerator of which shall be the
total number of shares of Capital Stock outstanding
immediately prior to such dividend or distribution,
and (B) the denominator of which shall be the total
number of shares of Capital Stock outstanding
immediately after such dividend or distribution; or
(ii) Liquidating Dividends, Etc. Pay or make an
Extraordinary Cash Dividend or make a distribution of
its assets to the holders of its Capital Stock as a
dividend in liquidation or by way of return of
capital or other than as a dividend payable out of
earnings or surplus legally available for dividends
under applicable law, the Warrant Holder shall be
entitled to receive upon
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the exercise hereof, in addition to the number of
Common Shares receivable thereupon, and without
payment of any additional consideration therefor, a
sum equal to the amount of such assets or cash as
would have been payable to him as owner of that
number of Common Shares receivable by exercise of the
Warrant had he been the holder of record of such
Common Shares on the record date for such dividend or
distribution, or if no such record is taken, as of
the date of such dividend or distribution, and an
appropriate provision therefor shall be made a part
of any such dividend or distribution; or
(iii) Pro Rata Repurchases. In case the Company or any
subsidiary thereof shall, make a Pro Rata Repurchase,
the Warrant Price shall be adjusted by dividing the
Warrant Price in effect immediately prior to such
action by a fraction (which in no event shall be less
than one), the numerator of which shall be the
product of (A) the number of Common Shares
outstanding immediately before such Pro Rata
Repurchase minus the number of Common Shares
repurchased in such Pro Rata Repurchase and (B) the
Market Price as of the day immediately preceding the
first public announcement by the Company of the
intent to effect such Pro Rata Repurchase, and the
denominator of which shall be (A) the product of (x)
the number of Common Shares outstanding immediately
before such Pro Rata Repurchase and (y) the Market
Price as of the day immediately preceding the first
public announcement by the Company of the intent to
effect such Pro Rata Repurchase minus (B) the
aggregate purchase price of the Pro Rata Repurchase.
(d) Issuance of Additional Shares of Capital Stock. If the Company
at any time while the Warrant remains outstanding and
unexpired shall issue any Additional Shares of Capital Stock
(otherwise than as provided in the foregoing subsections (a)
through (c) above) at a price per share less, or for other
consideration lower, than the Base Price, or without
consideration, then upon such issuance the Warrant Price shall
be adjusted to that price determined by multiplying the
Warrant Price by a fraction (i) the numerator of which shall
be the number of shares of Capital Stock outstanding
immediately prior to the issuance of such Additional Shares of
Capital Stock plus the number of shares of Capital Stock which
the aggregate consideration for the total number of such
Additional Shares of Capital Stock so issued would purchase at
the Base Price, and (ii) the denominator of which shall be the
number of shares of Capital Stock outstanding immediately
prior to the issuance of such Additional Shares of Capital
Stock plus the number of such Additional Shares of Capital
Stock so issued. The provisions of this subsection 6(d) shall
not apply under any of the circumstances for which an
adjustment is provided in subsections 6(a), 6(b), or 6(c). No
adjustment of the Warrant Price shall be made under this
subsection 6(d) upon the issuance of any Additional Shares of
Capital Stock which are issued pursuant to the exercise of any
warrants, options or other subscription or purchase rights or
pursuant to the exercise of any conversion or exchange rights
in any convertible securities if any such
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adjustments shall previously have been made upon the issuance
of any such warrants, options or other rights or upon the
issuance of any convertible securities (or upon the issuance
of any warrants, options or any rights therefor) pursuant to
subsections 6(e) or 6(f) hereof.
(e) Issuance of Warrants, Options or Other Rights. In case the
Company shall issue any warrants, options or other rights to
subscribe for or purchase any Additional Shares of Capital
Stock and the price per share for which Additional Shares of
Capital Stock may at any time thereafter be issuable pursuant
to such warrants, options or other rights shall be less than
the Base Price, then upon such issuance the Warrant Price
shall be adjusted as provided in subsection 6(d) hereof on the
basis that the aggregate consideration for the Additional
Shares of Capital Stock issuable pursuant to such warrants,
options or other rights, shall be deemed to be the
consideration received by the Company for the issuance of such
warrants, options, or other rights plus the minimum
consideration to be received by the Company for the issuance
of Additional Shares of Capital Stock pursuant to such
warrants, options, or other rights.
(f) Issuance of Convertible Securities. In case the Company shall
issue any convertible securities and the consideration per
share for which Additional Shares of Capital Stock may at any
time thereafter be issuable pursuant to the terms of such
convertible securities shall be less than the Base Price, then
upon such issuance the Warrant Price shall be adjusted as
provided in subsection 6(d) hereof on the basis that (i) the
maximum number of Additional Shares of Capital Stock necessary
to effect the conversion or exchange of all such convertible
securities shall be deemed to have been issued as of the date
of issuance of such convertible securities, and (ii) the
aggregate consideration for such maximum number of Additional
Shares of Capital Stock shall be deemed to be the minimum
consideration received by the Company for the issuance of such
Additional Shares of Capital Stock pursuant to the terms of
such convertible securities. No adjustment of the Warrant
Price shall be made under this subsection upon the issuance of
any convertible securities which are issued pursuant to the
exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have
been made upon the issuance of such warrants or other rights
pursuant to subsection 6(e) hereof.
(g) Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price pursuant to any provision of this Section 6, the
number of Common Shares purchasable hereunder at the Warrant
Price shall be adjusted, to the nearest one hundredth of a
whole share, to the product obtained by multiplying such
number of Common Shares purchasable immediately prior to such
adjustment in the Warrant Price by a fraction, the numerator
of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant
Price immediately thereafter.
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(h) Other Provisions Applicable to Adjustments Under this Section.
The following provisions will be applicable to the making of
adjustments in the Warrant Price hereinabove provided in this
Section 6:
(i) Computation of Consideration. To the extent that any
Additional Shares of Capital Stock or any convertible
securities or any warrants, options or other rights
to subscribe for or purchase any Additional Shares of
Capital Stock or any convertible securities shall be
issued for a cash consideration, the consideration
received by the Company therefor shall be deemed to
be the amount of the cash received by the Company
therefor, or, if such Additional Shares of Capital
Stock or convertible securities are offered by the
Company for subscription, the subscription price, or,
if such Additional Shares of Capital Stock or
convertible securities are sold to underwriters or
dealers for public offering without a subscription
offering, or through underwriters or dealers for
public offering without a subscription offering, the
initial public offering price, in any such case
disregarding any amounts paid or incurred by the
Company for and in the underwriting of, or otherwise
in connection with the issue thereof. To the extent
that such issuance shall be for a consideration other
than cash, then, except as herein otherwise expressly
provided, the amount of such consideration shall be
deemed to be the fair value of such consideration at
the time of such issuance as determined in good faith
by the Company's Board of Directors. The
consideration for any Additional Shares of Capital
Stock issuable pursuant to any warrants, options or
other rights to subscribe for or purchase the same
shall be the consideration received by the Company
for issuing such warrants, options or other rights,
plus the additional consideration payable to the
Company upon the exercise of such warrants, options
or other rights. The consideration for any Additional
Shares of Capital Stock issuable pursuant to the
terms of any convertible securities shall be the
consideration paid or payable to the Company in
respect of the subscription for or purchase of such
convertible securities, plus the additional
consideration, if any, payable to the Company upon
the exercise of the right of conversion or exchange
in such convertible securities. In case of the
issuance at any time of any Additional Shares of
Capital Stock or convertible securities in payment or
satisfaction of any dividends in a fixed amount, the
Company shall be deemed to have received for such
Additional Shares of Capital Stock or convertible
securities a consideration equal to the amount of
such dividend so paid or satisfied.
(ii) Readjustment of Warrant Price. Upon the expiration of
the right to convert or exchange any convertible
securities, or upon the expiration of any rights,
options or warrants, the issuance of which
convertible securities, rights, options or warrants
effected an adjustment in the Warrant Price, if any
such convertible securities shall not have been
converted or exchanged, or if any such rights,
options or warrants shall not
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have been exercised, the number of shares of Capital
Stock deemed to be issued and outstanding by reason
of the fact that they were issuable upon conversion
or exchange of any such convertible securities or
upon exercise of any such rights, options, or
warrants shall no longer be computed as set forth
above, and the Warrant Price shall forthwith be
readjusted and thereafter be the price which it would
have been (but reflecting any other adjustments in
the Warrant Price made pursuant to the provisions of
this Section 6 after the issuance of such convertible
securities, rights, options or warrants) had the
adjustment of the Warrant Price made upon the
issuance or sale of such convertible securities or
issuance of rights, options or warrants been made on
the basis of the issuance only of the number of
Additional Shares of Capital Stock actually issued
upon conversion or exchange of such convertible
securities, or upon the exercise of such rights,
options or warrants, and thereupon only the number of
Additional Shares of Capital Stock actually so issued
shall be deemed to have been issued and only the
consideration actually received by the Company
(computed as in subsection (h)(i) hereof) shall be
deemed to have been received by the Company.
(iii) Treasury Shares. The number of shares of Capital
Stock at any time outstanding shall not include any
shares thereof then directly or indirectly owned or
held by or for the account of the Company or any
subsidiary of the Company.
(iv) Other Action Affecting Capital Stock. In case after
the date hereof the Company shall take any action
affecting the Capital Stock, other than an action
described in any of the foregoing subsection (a) to
(f) hereof, inclusive, which in the opinion of the
Company's Board of Directors would have a materially
adverse effect upon the rights of the holders of the
Warrant, the Warrant Price shall be adjusted in such
manner and at such time as the Board of Directors on
the advice of the Company's independent public
accountants may in good faith determine to be
equitable in the circumstances.
(v) Limitation or Adjustment of Warrant Price.
Notwithstanding any other provision of this Warrant,
no adjustment of the Warrant Price shall be made
which would reduce such Warrant Price below the par
value of the Warrant Shares.
(vi) No Impairment. The Company will not, by amendment of
its constitutive documents or through any
consolidation, merger, reorganization, transfer of
assets, dissolution, securities issuance or any other
action, avoid or seek to avoid the observance or
performance of the terms of this Warrant, or to
deprive the holder hereof of the intended benefits
hereof, and will at all times in good faith take such
actions (or refrain therefrom) as shall be necessary
or appropriate to effect the intended purposes and
benefits of
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13
this Warrant. Without limiting the generality of the
foregoing, the Company will not permit the par value
of the Warrant Shares to exceed the Warrant Price.
The Company will not amend any material term of any
outstanding security convertible into, or exercisable
or exchangeable for, Common Shares unless it also
offers to make substantially the same amendment to
the terms hereof.
7. Notice of Adjustments. Whenever the Warrant Price or the number of
Common Shares purchasable under the terms of this Warrant at that Warrant Price
shall be adjusted pursuant to Section 6 hereof, the Company shall prepare a
certificate signed by its President or a Vice President and by its Treasurer or
Assistant Treasurer or its Secretary or Assistant Secretary, setting forth in
reasonable detail the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Company's Board of Directors made any
determination hereunder), and the Warrant Price and number of Common Shares
purchasable at that Warrant Price after giving effect to such adjustment, and
shall promptly cause copies of such certificate to be mailed (by first class and
postage prepaid) to the registered holder of this Warrant.
In the event the Company shall, at a time when this Warrant is
exercisable, take any action which pursuant to Section 6 may result in an
adjustment of any of the Warrant Price or the number of Common Shares
purchasable at that Warrant Price upon exercise of this Warrant, the Company
will give to the registered holder of this Warrant at such holder's last address
known to the Company written notice of such action ten (10) days in advance of
its effective date in order to afford to such holder of this Warrant an
opportunity to exercise this Warrant and to purchase Common Shares prior to such
action becoming effective.
8. Payment of Taxes. All Common Shares issued upon the exercise of this
Warrant shall be validly issued, fully paid and nonassessable, and the Company
shall pay all taxes and other governmental charges that may be imposed in
respect of the issue or delivery thereof. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for Common Shares in any name other
than that of the registered holder of the Warrant surrendered in connection with
the purchase of such shares, and in such case the Company shall not be required
to issue or deliver any share certificate until such tax or other charge has
been paid or it has been established to the Company's satisfaction that no tax
or other charge is due.
9. Fractional Shares. No fractional Common Shares will be issued in
connection with any purchase hereunder but in lieu of such fractional shares,
the Company shall make a cash refund therefor equal in amount to the product of
the applicable fraction multiplied by the Market Price as of the date of such
exercise.
10. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
of evidence reasonably satisfactory to it that this Warrant has been mutilated,
destroyed, lost or stolen, and in the case of a destroyed, lost or stolen
Warrant, a bond of indemnity reasonably satisfactory to the Company, or in the
case of a mutilated Warrant, upon surrender and cancellation of this Warrant,
the Company will execute and deliver in the Warrant ▇▇▇▇▇▇'s
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14
name, in exchange and substitution for the Warrant so mutilated, destroyed, lost
or stolen, a new Warrant of like tenor substantially in the form hereof with
appropriate insertions and variations.
- 13 -
15
11. Legend. The certificate representing any Warrant Shares acquired
upon exercise of this Warrant, and any Common Shares or other securities issued
in respect of such Warrant Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall be stamped or
otherwise imprinted with the following legend (unless such a legend is no longer
required under the 1933 Act):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS. IN ADDITION, THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER AS SET FORTH IN A WARRANT OF THE COMPANY DATED AUGUST 25,
1998."
12. Headings. The descriptive headings of the several sections of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on the date of this Warrant.
GCA LTD.
By:_______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer
Attest:__________________________________________
ACCEPTED, ACKNOWLEDGED
AND AGREED
By: ________________________________
[Name of Warrant Holder]
Attest: ____________________________
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16
Rider A
PURCHASE AGREEMENT
Date: __________________________
TO:
The undersigned, pursuant to the provisions set forth in the
attached Warrant, hereby agrees to purchase _________________ Common Shares
covered by such Warrant, and makes payment herewith in full therefor at the
price per share provided by this Warrant.
Signature: ____________________
Address: _______________________
* * * *
ASSIGNMENT
For Value Received, ________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of Common Shares covered by such
Warrant, to:
NAME OF ▇▇▇▇▇▇▇▇ ADDRESS NO. OF SHARES
Dated: _________________________ Signature: ______________________________
Address: ________________________________