EXHIBIT 4.6
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WARRANT AGREEMENT
Dated as of December 29, 2005
between
NATIONAL COAL CORP.
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Warrant Agent
Warrants to Purchase
Shares of Common Stock
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WARRANT AGREEMENT, dated as of December 29, 2005 (this "Agreement"),
between National Coal Corp., a Florida corporation (the "COMPANY"), and ▇▇▇▇▇
Fargo Bank, National Association, a national banking association, as warrant
agent (in such capacity, the "WARRANT AGENT").
WHEREAS, the Company proposes to issue 55,000 common stock purchase
warrants (the "WARRANTS") to initially purchase up to an aggregate of 1,732,632
shares of common stock, par value $0.0001 per share (the "COMMON STOCK"), of the
Company (the Common Stock issuable on exercise of the Warrants being referred to
herein as the "WARRANT SHARES"), each Warrant initially representing the right
to purchase 31.5024 Warrant Shares, in connection with the offering (the
"OFFERING") by the Company of 55,000 units (the "UNITS"), each Unit consisting
of (i) $1,000 principal amount at maturity of the 10.5% Senior Secured Notes due
2010 of the Company (the "Notes") and (ii) one Warrant.
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) and other matters as provided
herein.
WHEREAS, the Company has entered into that certain Equity Registration
Rights Agreement, dated as of the date hereof, between the Company and ▇▇▇▇▇▇▇▇▇
& Company, Inc. for the benefit of holders of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"144A GLOBAL WARRANT" means a Global Warrant substantially in the form
of EXHIBIT A hereto sold in reliance on Rule 144A and bearing the Global Warrant
Legend and the Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Warrant, the rules and procedures
of the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors or
similar governing body of such Person or any duly authorized committee thereof.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CLEARSTREAM" means Clearstream Banking, S.A.
"CLOSING DATE" means the date hereof.
"DEFINITIVE WARRANT" means a Warrant Certificate issued in registered
form as a definitive Warrant Certificate.
"DEPOSITARY" means, with respect to the Warrants issuable or issued in
whole or in part in global form, 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.
"EQUITY REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, between the Company and the Initial
Purchaser relating to the resale of Warrant Shares.
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the amount set forth in the form of Warrant
Certificate attached hereto as EXHIBIT A, as adjusted as herein provided.
"GLOBAL WARRANTS" means, individually and collectively, each of the
Restricted Global Warrants and the Unrestricted Global Warrants, substantially
in the form of EXHIBIT A hereto issued in accordance with SECTION 3.1(B) and 3.5
hereof.
"GLOBAL WARRANT LEGEND" means the legend set forth in SECTION
3.5(F)(II), which is required to be placed on all Global Warrants issued under
this Agreement.
"IAI GLOBAL WARRANT" means a Global Warrant substantially in the form
of EXHIBIT A hereto sold to Institutional Accredited Investors and bearing the
Global Warrant Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee.
"INDENTURE" means the indenture, dated as of the date hereof, among the
Company, the Guarantors set forth therein and ▇▇▇▇▇ Fargo Bank, National
Association, as trustee and collateral agent, relating to the Notes.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Warrant through a Participant.
"INITIAL PURCHASER" means ▇▇▇▇▇▇▇▇▇ & Company, Inc.
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"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, which is not also a QIB.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the corporate trust
office of the Warrant Agent is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"NON-U.S. PERSON" means any Person other than a U.S. Person.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Secretary or the Treasurer of such Person.
"OFFICER'S CERTIFICATE" means a certificate signed on behalf of the
Company by an Officer of the Company, who must be the Chairman of the Board, the
President, the Chief Executive Officer, the Chief Financial Officer, the
Treasurer or the principal accounting officer or a Senior Vice President or Vice
President of the Company.
"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 or any subsidiary of the Company.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in SECTION
3.5(F)(I) to be placed on all Warrants issued under this Warrant Agreement
except where otherwise permitted by the provisions of this Warrant Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REGISTRABLE SECURITY" means, at any time, any of (i) the Warrant
Shares (whether or not the related Warrants have been exercised) and (ii) any
other securities issued or issuable with respect to any Warrant Shares by way of
stock dividends or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
offering of such securities by the holder thereof shall have been declared
effective under the Securities Act and such securities shall have been disposed
of by such holder pursuant to such registration
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statement, (b) such securities may be sold to the public pursuant to Rule 144(k)
(or any similar provisions then in force, but not Rule 144A) promulgated under
the Securities Act, (c) such securities shall have been otherwise transferred by
the holder thereof and new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company or its
transfer agent and subsequent disposition of such securities shall not require
registration or qualification under the Securities Act or (d) such securities
shall have ceased to be outstanding.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL WARRANT" means a Global Warrant in the form of
EXHIBIT A hereto bearing the Global Warrant Legend, the Private Placement Legend
and the Regulation S Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee.
"REGULATION S LEGEND" means the legend set forth in SECTION 3.5(F)(IV)
to be placed on all Regulation S Global Warrants issued pursuant to Regulation
S.
"RESTRICTED DEFINITIVE WARRANT" means a Definitive Warrant bearing the
Private Placement Legend.
"RESTRICTED GLOBAL WARRANT" means a Global Warrant bearing the Private
Placement Legend.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEPARATION DATE" means the earliest to occur of (i) 180 days following
the consummation of the offering of the Units, (ii) the date on which a
registration statement for a registered exchange offer with respect to the Notes
is declared effective under the Securities Act, (iii) the date on which a shelf
registration statement with respect to the Warrant Shares is declared effective,
and (iv) such date as ▇▇▇▇▇▇▇▇▇ & Company, Inc., as the initial purchaser of the
Units, in its sole discretion shall determine.
"TRUSTEE" means the trustee under the Indenture.
"UNRESTRICTED GLOBAL WARRANT" means a Global Warrant that does not bear
the Private Placement Legend.
"UNRESTRICTED DEFINITIVE WARRANT" means one or more Definitive Warrants
that do not bear and are not required to bear the Private Placement Legend.
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"U.S. PERSON" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"WARRANT COUNTERSIGNATURE ORDER" shall have the meaning as set forth in
SECTION 3.2.
Section 2. APPOINTMENT OF WARRANT AGENT.
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth hereinafter in this
Agreement and the Warrant Agent hereby accepts such appointment pursuant to the
terms and conditions of this Agreement.
Section 3. ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.
3.1. FORM AND DATING.
(a) GENERAL. The Warrants shall be substantially in the form of
EXHIBIT A hereto (each a "WARRANT CERTIFICATE"). The Warrants may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Warrant shall be dated the date of its countersignature.
The terms and provisions contained in the Warrants shall constitute,
and are hereby expressly made, a part of this Warrant Agreement. The Company and
the Warrant Agent, by their execution and delivery of this Warrant Agreement,
expressly agree to such terms and provisions and to be bound hereby and thereby.
However, to the extent any provision of any Warrant conflicts with the express
provisions of this Warrant Agreement, the provisions of this Warrant Agreement
shall govern and be controlling.
(b) GLOBAL WARRANTS. Warrants issued in global form shall be
substantially in the form of EXHIBIT A attached hereto (including the Global
Warrant Legend thereon). Warrants issued in definitive form shall be
substantially in the form of EXHIBIT A attached hereto (but without the Global
Warrant Legend thereon). Each Global Warrant shall represent such of the
outstanding Warrants as shall be specified therein and each shall provide that
it shall represent the number of outstanding Warrants from time to time endorsed
thereon and that the number of outstanding Warrants represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the number of outstanding Warrants represented thereby
shall be made by the Warrant Agent in accordance with written instructions given
by the holder thereof as required by SECTION 3.5 hereof.
(c) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Banking" and "Customer Handbook" of Clearstream shall be applicable
to transfers of beneficial interests in the Regulation S Global Warrant that are
held by Participants through Euroclear or Clearstream.
3.2. EXECUTION.
An Officer shall sign the Warrants on behalf of the Company by manual
or facsimile signature.
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If the Officer whose signature is on a Warrant no longer holds that
office at the time a Warrant is countersigned, the Warrant shall nevertheless be
valid.
A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been properly issued under this Warrant Agreement.
The Warrant Agent shall, upon a written order of the Company signed by
an Officer (a "WARRANT COUNTERSIGNATURE ORDER"), countersign Warrants for
original issue up to the number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the Company to
countersign Warrants. Such an agent may countersign Warrants 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 AND DEPOSITARY.
The Company shall maintain an office or agency where Warrants may be
presented for registration of transfer or for exchange ("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
agent 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 or any of its subsidiaries may act as Warrant Registrar.
The Company initially appoints the Warrant Agent to act as the Warrant
Registrar with respect to the Warrants.
The Company initially appoints The Depository Trust Company ("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 record holders of Warrants. 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 as set forth in the Company's books and records.
3.5. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL WARRANTS. A Global Warrant may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of
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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. All Global Warrants will be exchanged by the Company
for Definitive Warrants if (i) the Company delivers to the Warrant Agent written
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 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Warrants (in
whole but not in part) should be exchanged for Definitive Warrants and delivers
a written notice to such effect to the Warrant Agent. Upon the occurrence of
either of the preceding events in (i) or (ii) above, Definitive Warrants shall
be issued in such names as the Depositary shall instruct the Warrant Agent in
writing. Global Warrants also may be exchanged or replaced, in whole or in part,
as provided in SECTIONS 3.6 and 3.7 hereof. A Global Warrant may not be
exchanged for another Warrant other than as provided in this SECTION 3.5(A),
however, beneficial interests in a Global Warrant may be transferred and
exchanged as provided in SECTION 3.5(B) or (C) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
WARRANTS. The transfer and exchange of beneficial interests in the Global
Warrants shall be effected through the Depositary, in accordance with the
provisions of this Warrant Agreement and the Applicable Procedures. Beneficial
interests in the Restricted Global Warrants shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Warrants also
shall require compliance with either SUBPARAGRAPH (I) or (II) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
WARRANT. Beneficial interests in any Restricted Global Warrant may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Warrant in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Warrant may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Warrant. No written
orders or instructions shall be required to be delivered to the Warrant
Registrar to effect the transfers described in this SECTION 3.5(B)(I).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
INTERESTS IN GLOBAL WARRANTS. In connection with all transfers and
exchanges of beneficial interests that are not subject to SECTION
3.5(B)(I) above, the transferor of such beneficial interest must
deliver to the Warrant Registrar both (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Warrant in an amount equal to the beneficial interest to be transferred
or exchanged and (2) written instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or both (B) (1) a written
order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Warrant in an amount
equal to the beneficial
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interest to be transferred or exchanged and (2) written instructions
given by the Depositary to the Warrant Registrar containing information
regarding the Person in whose name such Definitive Warrant shall be
registered. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Warrants contained in
this Agreement and the Warrants, the Warrant Agent shall adjust the
principal amount of the relevant Global Warrant(s) pursuant to SECTION
3.5(G) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER
RESTRICTED GLOBAL WARRANT. A beneficial interest in any Restricted
Global Warrant may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted
Global Warrant if the transfer complies with the requirements of
SECTION 3.5(B)(II) above and the Warrant Registrar receives the
following:
(A) if the transferee will take delivery in the
form of a beneficial interest in the ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, then the transferor must
deliver a certificate in the form of EXHIBIT
B hereto, including the certifications in
ITEM (1) thereof; and
(B) if the transferee will take delivery in the
form of a beneficial interest in the
Regulation S Global Warrant, then the
transferor must deliver a certificate in the
form of EXHIBIT B hereto, including the
certifications in ITEM (2) thereof, if
(C) if the transferee will take delivery in the
form of a beneficial interest in the IAI
Global Warrant, then the transferor must
deliver a certificate in the form of EXHIBIT
B hereto, including the certifications and
certificates and Opinion of Counsel required
by ITEM (3) thereof, if applicable.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL WARRANT FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
GLOBAL WARRANT. A beneficial interest in any Restricted Global Warrant
may be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Warrant or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Warrant if the exchange or transfer complies with
the requirements of SECTION 3.5(B)(II) above and the Warrant Registrar
receives the following:
(A) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
exchange such beneficial interest for a
beneficial interest in an Unrestricted
Global Warrant, a certificate from such
holder in the form of EXHIBIT C hereto,
including the certifications in ITEM (1)(A)
thereof; or
(B) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
transfer such beneficial interest to a
Person who shall take delivery thereof in
the form of a beneficial interest in an
Unrestricted Global Warrant, a certificate
from such holder in the form of EXHIBIT B
hereto, including the certifications in ITEM
(4) thereof;
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and, in each such case set forth in this SUBPARAGRAPH (IV), if the
Warrant Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Warrant Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
If any such transfer is effected pursuant to SUBPARAGRAPH (IV) above at
a time when an Unrestricted Global Warrant has not yet been issued, the Company
shall issue and, upon receipt of an Warrant Countersignature Order in accordance
with SECTION 3.2 hereof, the Warrant Agent shall countersign one or more
Unrestricted Global Warrants in the number equal to the number of beneficial
interests transferred pursuant to SUBPARAGRAPH (IV) above.
(c) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
WARRANTS.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL WARRANTS TO
RESTRICTED DEFINITIVE WARRANTS. If any holder of a beneficial interest
in a Restricted Global Warrant proposes to exchange such beneficial
interest for a Restricted Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Warrant, then, upon receipt by the Warrant
Registrar of the following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
exchange such beneficial interest for a
Restricted Definitive Warrant, a certificate
from such holder in the form of EXHIBIT C
hereto, including the certifications in ITEM
(2)(A) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A under the Securities Act, a certificate
to the effect set forth in EXHIBIT B hereto,
including the certifications in ITEM (1)
thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in
EXHIBIT B hereto, including the
certifications in ITEM (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from
the registration requirements of the
Securities Act in accordance with Rule 144
under the Securities Act, a certificate to
the effect set forth in EXHIBIT B hereto,
including the certifications in ITEM (3)(A)
thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited
Investor in reliance on an exemption from
the registration requirements of the
Securities Act other than those listed in
SUBPARAGRAPHS (B) through (D) above, a
certificate to the effect set forth in
EXHIBIT B hereto, including the
certifications, certificates and Opinion of
Counsel required by ITEM (3) thereof, if
applicable; or
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(F) if such beneficial interest is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect
set forth in EXHIBIT B hereto, including the
certifications in ITEM (3)(B) thereof;
the Warrant Agent shall cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be reduced by the number of
Warrants to be represented by the Definitive Warrant pursuant to SECTION 3.5(G)
hereof, and the Company shall execute and the Warrant Agent shall countersign
and deliver to the Person designated in the instructions a Definitive Warrant in
the appropriate amount. Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this SECTION
3.5(C) shall be registered in such name or names as the holder of such
beneficial interest shall instruct the Warrant Registrar through written
instructions from the Depositary and the Participant or Indirect Participant.
The Warrant Agent shall deliver such Definitive Warrants to the Persons in whose
names such Warrants are so registered. Any Definitive Warrant issued in exchange
for a beneficial interest in a Restricted Global Warrant pursuant to this
SECTION 3.5(C)(I) shall bear the Private Placement Legend and shall be subject
to all restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL WARRANTS TO
UNRESTRICTED DEFINITIVE WARRANTS. A holder of a beneficial interest in
a Restricted Global Warrant may exchange such beneficial interest for
an Unrestricted Definitive Warrant or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Warrant only if the Warrant Registrar receives
the following:
(A) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
exchange such beneficial interest for an
Unrestricted Definitive Warrant, a
certificate from such holder in the form of
EXHIBIT C hereto, including the
certifications in ITEM (1)(B) thereof; or
(B) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
transfer such beneficial interest to a
Person who shall take delivery thereof in
the form of an Unrestricted Definitive
Warrant, a certificate from such holder in
the form of EXHIBIT B hereto, including the
certifications in ITEM (4) thereof; and, in
each such case set forth in this
SUBPARAGRAPH (II), if the Warrant Registrar
so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form
reasonably acceptable to the Warrant
Registrar to the effect that such exchange
or transfer is in compliance with the
Securities Act and that the restrictions on
transfer contained herein and in the Private
Placement Legend are no longer required in
order to maintain compliance with the
Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL WARRANTS
TO UNRESTRICTED DEFINITIVE WARRANTS. If any holder of a beneficial
interest in an Unrestricted Global Warrant proposes to exchange such
beneficial interest for a Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Warrant, then, upon satisfaction of the conditions set
forth in SECTION 3.5(B)(II) hereof, the Warrant Agent shall cause the
amount of the applicable Global Warrant to be
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reduced accordingly pursuant to SECTION 3.5(G) hereof, and the Company
shall execute and the Warrant Agent shall countersign and deliver to
the Person designated in the instructions a Definitive Warrant in the
appropriate principal amount. Any Definitive Warrant issued in exchange
for a beneficial interest pursuant to this SECTION 3.5(C)(III) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Warrant Registrar through written instructions from the Depositary
and the Participant or Indirect Participant. The Warrant Agent shall
deliver such Definitive Warrants to the Persons in whose names such
Warrants are so registered. Any Definitive Warrant issued in exchange
for a beneficial interest pursuant to this SECTION 3.5(C)(III) shall
not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE WARRANTS TO BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL WARRANTS. If any holder of a Restricted
Definitive Warrant proposes to exchange such Warrant for a beneficial
interest in a Restricted Global Warrant or to transfer such Restricted
Definitive Warrants to a Person who takes delivery thereof in the form
of a beneficial interest in a Restricted Global Warrant, then, upon
receipt by the Warrant Registrar of the following documentation:
(A) if the holder of such Restricted Definitive
Warrant proposes to exchange such Warrant
for a beneficial interest in a Restricted
Global Warrant, a certificate from such
holder in the form of EXHIBIT C hereto,
including the certifications in ITEM (2)(B)
thereof;
(B) if such Restricted Definitive Warrant is
being transferred to a QIB in accordance
with Rule 144A under the Securities Act, a
certificate to the effect set forth in
EXHIBIT B hereto, including the
certifications in ITEM (1) thereof;
(C) if such Restricted Definitive Warrant is
being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in
EXHIBIT B hereto, including the
certifications in ITEM (2) thereof;
(D) if such Restricted Definitive Warrant is
being transferred pursuant to an exemption
from the registration requirements of the
Securities Act in accordance with Rule 144
under the Securities Act, a certificate to
the effect set forth in EXHIBIT B hereto,
including the certifications in ITEM (3)(A)
thereof;
(E) if such Restricted Definitive Warrant is
being transferred to an Institutional
Accredited Investor in reliance on an
exemption from the registration requirements
of the Securities Act other than those
listed in SUBPARAGRAPHS (B) through (D)
above, a certificate to the effect set forth
in EXHIBIT B hereto, including the
certifications, certificates and Opinion of
Counsel required by ITEM (3) thereof, if
applicable; or
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(F) if such Restricted Definitive Warrant is
being transferred to the Company or any of
its Subsidiaries, a certificate to the
effect set forth in EXHIBIT B hereto,
including the certifications in ITEM (3)(B)
thereof;
the Warrant Agent shall cancel the Restricted Definitive Warrant and
increase or cause to be increased the amount of, in the case of CLAUSE
(A) above, the appropriate Restricted Global Warrant, in the case of
CLAUSE (B) above, the ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in the case of CLAUSE (C)
above, the Regulation S Global Warrant, and in all other cases, the IAI
Global Warrant.
(ii) RESTRICTED DEFINITIVE WARRANTS TO BENEFICIAL
INTERESTS IN UNRESTRICTED GLOBAL WARRANTS. A holder of a Restricted
Definitive Warrant may exchange such Warrant for a beneficial interest
in an Unrestricted Global Warrant or transfer such Restricted
Definitive Warrant to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Warrant only if the
Warrant Registrar receives the following:
(A) if the holder of such Definitive Warrants
proposes to exchange such Warrants for a
beneficial interest in the Unrestricted
Global Warrant, a certificate from such
holder in the form of EXHIBIT C hereto,
including the certifications in ITEM (1)(C)
thereof; or
(B) if the holder of such Definitive Warrants
proposes to transfer such Warrants to a
Person who shall take delivery thereof in
the form of a beneficial interest in the
Unrestricted Global Warrant, a certificate
from such holder in the form of EXHIBIT B
hereto, including the certifications in ITEM
(4) thereof;
and, in each such case set forth in this SUBPARAGRAPH (II), if the
Warrant Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Warrant Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this SECTION 3.5(D)(II), the Warrant Agent shall
cancel the Definitive Warrants and increase or cause to be increased
the aggregate principal amount of the Unrestricted Global Warrant.
(iii) UNRESTRICTED DEFINITIVE WARRANTS TO BENEFICIAL
INTERESTS IN UNRESTRICTED GLOBAL WARRANTS. A holder of an Unrestricted
Definitive Warrant may exchange such Warrant for a beneficial interest
in an Unrestricted Global Warrant or transfer such Definitive Warrants
to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Warrant at any time. Upon receipt of
a written request for such an exchange or transfer, the Warrant Agent
shall cancel the applicable Unrestricted Definitive Warrant and
increase or cause to be increased the amount of one of the Unrestricted
Global Warrants.
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If any such exchange or transfer from a Definitive Warrant to a
beneficial interest is effected pursuant to SUBPARAGRAPHS (II)(B) or
(III) above at a time when an Unrestricted Global Warrant has not yet
been issued, the Company shall issue and, upon receipt of a Warrant
Countersignature Order in accordance with SECTION 3.2 hereof, the
Warrant Agent shall countersign one or more Unrestricted Global
Warrants in the number equal to the number of beneficial interests of
Definitive Warrants so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS FOR DEFINITIVE
WARRANTS. Upon written request by a holder of Definitive Warrants and such
holder's compliance with the provisions of this SECTION 3.5(E), the Warrant
Registrar shall register the transfer or exchange of Definitive Warrants. Prior
to such registration of 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. In addition, the requesting holder shall
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this SECTION 3.5(E).
(i) RESTRICTED DEFINITIVE WARRANTS TO RESTRICTED
DEFINITIVE WARRANTS. Any Restricted Definitive Warrant may be
transferred to and registered in the name of Persons who take delivery
thereof in the form of a Restricted Definitive Warrant if the Warrant
Registrar receives the following:
(A) if the transfer will be made pursuant to
Rule 144A, then the transferor must deliver
a certificate in the form of EXHIBIT B
hereto, including the certifications in ITEM
(1) thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor
must deliver a certificate in the form of
EXHIBIT B hereto, including the
certifications in ITEM (2) thereof; or
(C) if the transfer will be made pursuant to any
other exemption from the registration
requirements of the Securities Act, then the
transferor must deliver a certificate in the
form of EXHIBIT B hereto, including the
certifications, certificates and Opinion of
Counsel required by ITEM (3) thereof, if
applicable.
(ii) RESTRICTED DEFINITIVE WARRANTS TO UNRESTRICTED
DEFINITIVE WARRANTS. Any Restricted Definitive Warrant may be exchanged
by the holder thereof for an Unrestricted Definitive Warrant or
transferred to a Person or Persons who take delivery thereof in the
form of an Unrestricted Definitive Warrant if the Warrant Registrar
receives the following:
(A) if the holder of such Restricted Definitive
Warrants proposes to exchange such Warrants
for an Unrestricted Definitive Warrant, a
certificate from such holder in the form of
EXHIBIT C hereto, including the
certifications in ITEM (1)(D) thereof; or
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(B) if the holder of such Restricted Definitive
Warrants proposes to transfer such Warrants
to a Person who shall take delivery thereof
in the form of an Unrestricted Definitive
Warrant, a certificate from such holder in
the form of EXHIBIT B hereto, including the
certifications in ITEM (4) thereof;
and, in each such case set forth in this SUBPARAGRAPH (II), if the
Warrant Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Warrant Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) UNRESTRICTED DEFINITIVE WARRANTS TO UNRESTRICTED
DEFINITIVE WARRANTS. A holder of Unrestricted Definitive Warrants may
transfer such Warrants to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Warrant. Upon receipt of a written
request to register such a transfer, the Warrant Registrar shall
register the Unrestricted Definitive Warrants pursuant to the
instructions from the holder thereof.
(f) LEGENDS. The following legends shall appear on the face of all
Global Warrants and Definitive Warrants issued under this Warrant Agreement
unless specifically stated otherwise in the applicable provisions of this
Warrant Agreement.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by SUBPARAGRAPH (B)
below, each Global Warrant and each
Definitive Warrant (and all Warrants issued
in exchange therefor or substitution
thereof) shall bear the legend in
substantially the following form:
"THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE WARRANT SHARES
TO BE ISSUED UPON ITS EXERCISE NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO REGISTRATION.
THE HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON
ITS EXERCISE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")), (B) IT IS A NON-U.S. PURCHASER AND IS
ACQUIRING THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (C)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
14
ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY
AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, PRIOR TO THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY
RULE 144(K) (OR ANY SUCCESSOR PROVISION THEREOF) UNDER THE SECURITIES
ACT) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY
PREDECESSOR OF THIS SECURITY) AND THE LAST DATE ON WHICH THE COMPANY OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT
TO RULE 904 OF REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY AND
THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY OTHER
JURISDICTION, INCLUDING ANY STATE OF THE UNITED STATES, SUBJECT TO THE
COMPANY'S AND THE WARRANT AGENT'S, OR TRANSFER AGENT'S, AS APPLICABLE,
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE WARRANT AGENT OR TRANSFER AGENT.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON
ITS EXERCISE, BY ITS ACCEPTANCE HEREOF, AGREES NOT TO ENGAGE IN ANY
HEDGING TRANSACTION UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE, BY ITS
15
ACCEPTANCE HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY OR ANY INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THESE LEGENDS."
(B) Notwithstanding the foregoing, any Global
Warrant or Definitive Warrant issued
pursuant to SUBPARAGRAPHS (B)(IV), (C)(II),
(C)(III), (D)(II), (D)(III), (E)(II) or
(E)(III) to this SECTION 3.5 (and all
Warrants issued in exchange therefor or
substitution thereof) shall not bear the
Private Placement Legend.
(ii) GLOBAL WARRANT LEGEND. Each Global Warrant shall bear
a legend in substantially the following form:
"THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT
MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
3.5 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE WARRANT
AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE WARRANT
AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT AGREEMENT
AND (IV) THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) UNIT LEGEND. Each Warrant issued prior to the
Separation Date shall bear a legend in substantially the following
form:
"THIS SECURITY WAS INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS
(THE "UNITS"), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT OF THE
COMPANY'S 10.5% SENIOR SECURED NOTES DUE 2010 (THE "NOTES") AND ONE
WARRANT TO PURCHASE 31.5024 SHARES OF THE COMPANY'S COMMON STOCK (THE
"WARRANTS").
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE
OFFERING OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT
FOR A REGISTERED EXCHANGE OFFER WITH RESPECT TO THE NOTES IS DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (III) THE DATE ON WHICH A SHELF
REGISTRATION STATEMENT WITH RESPECT TO THE WARRANT SHARES IS DECLARED
EFFECTIVE UNDER THE SECURITIES ACT AND (IV) SUCH DATE AS ▇▇▇▇▇▇▇▇▇ &
COMPANY, INC. IN ITS SOLE DISCRETION SHALL DETERMINE, THE SECURITY
EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY AS, A UNIT."
16
(iii) REGULATION S LEGEND. Each Warrant that is a
Registrable Security and issued pursuant to Regulation S shall bear the
following legend on the face thereof:
"THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND THE WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. IN ORDER TO EXERCISE
THIS WARRANT, THE HOLDER MUST FURNISH TO THE COMPANY AND THE WARRANT
AGENT EITHER (A) A WRITTEN CERTIFICATION THAT IT IS NOT A U.S. PERSON
AND THE WARRANT IS NOT BEING EXERCISED ON BEHALF OF A U.S. PERSON OR
(B) A WRITTEN OPINION OF COUNSEL TO THE EFFECT THAT THE SECURITIES
DELIVERED UPON EXERCISE OF THE WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OR THAT THE DELIVERY OF SUCH SECURITIES IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. TERMS IN THIS
LEGEND HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT."
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL WARRANTS. At such
time as all beneficial interests in a particular Global Warrant have been
exercised or exchanged for Definitive Warrants or a particular Global Warrant
has been exercised, redeemed, repurchased or canceled in whole and not in part,
each such Global Warrant shall be returned to or retained and canceled by the
Warrant Agent in accordance with SECTION 3.8 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Warrant is exercised or
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Warrant or for Definitive
Warrants, the amount of Warrants represented by such Global Warrant shall be
reduced accordingly and an endorsement shall be made on such Global Warrant by
the Warrant Agent or by the Depositary at the direction of the Warrant Agent to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Warrant, such other Global Warrant shall
be increased accordingly and an endorsement shall be made on such Global Warrant
by the Warrant Agent or by the Depositary at the direction of the Warrant Agent
to reflect such increase.
(h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Warrant Agent shall countersign
Global Warrants and Definitive Warrants upon the Company's Warrant
Countersignature Order or at the Warrant Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Warrant or to a holder of a Definitive
Warrant for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.
17
(iii) All Global Warrants and Definitive Warrants issued
upon any registration of transfer or exchange of Global Warrants or
Definitive Warrants shall be the duly authorized, executed and issued
warrants for Common Stock of the Company, not subject to any preemptive
rights, and entitled to the same benefits under this Warrant Agreement,
as the Global Warrants or Definitive Warrants surrendered upon such
registration of transfer or exchange.
(iv) Prior to the due presentment for the registration of
a transfer of any Warrant, the Warrant Agent and the Company may deem
and treat the Person in whose name any Warrant is registered as the
absolute owner of such Warrant for all purposes and neither the Warrant
Agent nor the Company shall be affected by notice to the contrary.
(v) The Warrant Agent shall countersign Global Warrants
and Definitive Warrants in accordance with the provisions of SECTION
3.2 hereof.
(i) FACSIMILE SUBMISSIONS TO WARRANT AGENT. All certifications,
certificates and Opinions of Counsel required to be submitted to the Warrant
Registrar pursuant to this SECTION 3.5 to effect a registration of transfer or
exchange may be submitted by facsimile, so long as an executed original will be
subsequently delivered if requested by the Warrant Registrar.
Notwithstanding anything herein to the contrary, as to any certificates
and/or certifications delivered to the Warrant Registrar pursuant to this
SECTION 3.5, the Warrant Registrar's duties shall be limited to confirming that
any such certifications and certificates delivered to it are in the form of
EXHIBITS B and C attached hereto. The Warrant Registrar shall not be responsible
for confirming the truth or accuracy of representations made in any such
certifications or certificates. As to any Opinions of Counsel delivered pursuant
to this SECTION 3.5, the Warrant Registrar may rely upon, and be fully protected
in relying upon, such opinions.
3.6. REPLACEMENT WARRANTS.
If any mutilated Warrant is surrendered to the Warrant Agent or the
Company and the Warrant Agent receives evidence to its satisfaction of the
destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent and any agent for
purposes of the countersignature from any loss that any of them may suffer if a
Warrant is replaced. The Company may charge for its expenses in replacing a
Warrant.
Every replacement Warrant is an additional warrant of the Company and
shall be entitled to all of the benefits of this Warrant Agreement equally and
proportionately with all other Warrants duly issued hereunder.
18
3.7. TEMPORARY WARRANTS.
Until certificates representing Warrants are ready for delivery, the
Company may prepare and issue and the Warrant Agent, upon receipt of a Warrant
Countersignature Order, shall countersign temporary Warrants. Temporary Warrants
shall be substantially in the form of certificated Warrants but may have
variations that the Company considers appropriate for temporary Warrants and
that shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent shall countersign
definitive Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the benefits
of this Warrant Agreement.
3.8. CANCELLATION.
Subject to SECTION 3.5(G) hereof, the Company at any time may deliver
Warrants to the Warrant Agent for cancellation. The Warrant Registrar shall
forward to the Warrant Agent any Warrants surrendered to them for registration
of transfer, exchange or exercise. The Warrant Agent and no one else shall
cancel all Warrants surrendered for registration of transfer, exchange,
exercise, replacement or cancellation and shall destroy canceled Warrants
(subject to the record retention requirements of the Exchange Act).
Certification of the destruction of all canceled Warrants shall be delivered to
the Company. The Company may not issue new Warrants to replace Warrants that
have been exercised or that have been delivered to the Warrant Agent for
cancellation.
Section 4. SEPARATION OF WARRANTS; EXERCISE OF WARRANTS; TERMS OF
WARRANTS.
(a) The Notes and Warrants will not be separately transferable
until the Separation Date. Subject to the terms of this Agreement, each Warrant
holder shall have the right, which may be exercised at any time during the
period commencing on the opening of business on the first anniversary of the
Closing Date until 5:00 p.m., New York City time on December 15, 2010 (the
"EXERCISE PERIOD"), to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the holder may at the time be entitled to
receive on exercise of such Warrants upon payment of the aggregate Exercise
Price for all Warrant Shares being purchased by such holder (i) in cash, by wire
transfer or by certified or official bank check payable to the order of the
Company, (ii) by tendering Notes having a principal amount at the time of tender
equal to the aggregate Exercise Price then in effect for all Warrant Shares
being purchased by such holder, (iii) by tendering Warrants as set forth below
or (iv) any combination of cash, Notes or Warrants. Each holder may elect, upon
exercise of its Warrants during the Exercise Period, to receive Warrant Shares
on a net basis, such that, without the exchange of any funds, the holder will
receive such number of Warrant Shares as shall equal the product of (A) the
number of Warrant Shares for which such Warrant is exercisable as of the date of
exercise (if the Exercise Price were being paid in cash) and (B) the Cashless
Exercise Ratio. The "CASHLESS EXERCISE RATIO" shall equal a fraction, the
numerator of which is the Market Value (as defined below) per share of Common
Stock on the date of exercise minus the Exercise Price per share as of the date
of exercise and the denominator of which is the Market Value per share on the
date of exercise. Each Warrant not exercised prior to 5:00 p.m., New York City
time, on December 15,
19
2010 (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. The
Warrant Agent shall have no obligation to calculate the Cashless Exercise Ratio.
The "MARKET VALUE" per share of Common Stock as of any date shall equal
(i) if Common Stock is primarily traded on a securities exchange, the last sale
price of such Common Stock on such securities exchange on the trading day
immediately prior to the date of determination, or if no sale occurred on such
day, the mean among the closing "bid" and "asked" prices on such day, (ii) if
the principal market for Common Stock is in the over-the-counter market, the
closing sale price of such Common Stock on the trading day immediately prior to
the date of the determination, as published by the National Association of
Securities Dealers Automated Quotation System or similar organization, or if
such price is not so published on such day, the mean among the closing "bid" and
"asked" prices, if available, on such day, which prices may be obtained from any
reputable pricing service, broker or dealer reasonably satisfactory to the
Company, and (iii) if neither CLAUSE (I) nor CLAUSE (II) is applicable, the fair
market value on the date of determination of Common Stock as determined in good
faith by the Board of Directors of the Company.
(b) In the event that the closing sale price of the Common Stock
on a securities exchange or in the over-the-counter market exceeds 150% of the
Exercise Price for a period of at least twenty (20) trading days out of any
consecutive thirty (30) day trading period at any time during the Exercise
Period, all Warrants shall be required to be, and shall be deemed, without any
further action by the Company or any holder of a Warrant, exercised (the
"MANDATORY CONVERSION"). In the event of a Mandatory Conversion, the Company
will deliver an Officer's Certificate certifying as to the date of such
Mandatory Conversion, the conversion rate and the number of Warrant Shares to be
issued, and the Warrant Agent will effect such exercise (with or without
compliance by the holders with CLAUSE (C) below) by delivering Warrant Shares to
holders of record on a net basis, such that, without the exchange of any funds,
each holder will receive such number of Warrant Shares as shall equal the
product of (A) the number of Warrant Shares for which such Warrant held by the
holder is exercisable as of the date of the Mandatory Conversion (if the
Exercise Price were being paid in cash) and (B) the Cashless Exercise Ratio
(which shall be determined in good faith by the Company). If any fraction of a
Warrant Share would be issuable in the event of a Mandatory Conversion, pursuant
to SECTION 9 hereof, the Company shall calculate the amount in cash equal to the
Fair Market Value per Warrant Share and pay such amount, as determined on the
day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction, computed to the nearest whole U.S. cent.
Immediately following a Mandatory Conversion, all Warrant Certificate and Global
Warrants shall be automatically cancelled. (c) In order to exercise all or any
of the Warrants represented by a Warrant Certificate pursuant to SECTION 4(A)
hereof, (i) in the case of a Definitive Warrant, the holder thereof must
surrender upon exercise the Warrant Certificate to the Company at the corporate
trust office of the Warrant Agent set forth in SECTION 17 hereof, (ii) in the
case of a book-entry interest in a Global Warrant, the exercising Participant
whose name appears on a securities position listing of the Depositary as the
holder of such book-entry interest must comply with the Depositary's procedures
relating to the exercise of such book-entry interest in such Global
20
Warrant and (iii) in the case of interests in both Global Warrants and
Definitive Warrants, the holder thereof or the Participant, as applicable, shall
deliver to the Company at the corporate trust office of the Warrant Agent the
form of election to purchase on the reverse thereof 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 shall provide payment to the Warrant Agent for the account of the
Company of the Exercise Price, for the number of Warrant Shares in respect of
which such Warrants are then exercised. Payment of the aggregate Exercise Price
shall be made in accordance with SECTION 4(A) hereof.
(d) Subject to the provisions of SECTION 5 hereof, upon compliance
with CLAUSES (B) and (C) above, the Company shall deliver or cause to be
delivered with all reasonable dispatch, to or to the written order of the holder
and in such name or names as the holder may designate, a certificate or
certificates for the number of whole Warrant Shares issuable upon the exercise
of such Warrants or other securities or property to which such holder is
entitled hereunder, together with cash as provided in SECTION 9 hereof; PROVIDED
that if any consolidation, merger or lease or sale of assets is proposed to be
effected by the Company or its subsidiaries as described in SECTION 8(K) hereof,
or a tender offer or an exchange offer for shares of Common Stock shall be made,
upon such surrender of Warrants and payment of the aggregate Exercise Price in
accordance with SECTION 4(B) above, the Company shall, as soon as possible, but
in any event not later than two business days thereafter, deliver or cause to be
delivered the full number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence or other securities or
property to which such holder is entitled hereunder, together with cash as
provided in SECTION 9 hereof. All certificates in this SECTION 4(D) shall be
deemed to have been issued and any Person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the applicable
Exercise Price.
(e) The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part. If less than all
the Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate 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 Warrant Certificate, registered in such name or names as may
be directed in writing by the holder, and shall deliver or cause to be delivered
the new Warrant Certificate to the Person or Persons entitled to receive the
same. Each Global Warrant will represent such of the outstanding Warrants as
will be specified therein and each shall provide that it represents the
aggregate number of outstanding Warrants from time to time endorsed thereon and
that the aggregate number of outstanding Warrants represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
exercises. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the aggregate number of outstanding Warrants represented
thereby will be made by the Warrant Agent, in accordance with instructions given
by the holder or Participant thereof as required by SECTION 3.5 hereof.
(f) All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent. All cancelled Warrant Certificates
shall then be cancelled as provided in SECTION 3.8. The Warrant Agent shall
report promptly but, in no event later than two Business
21
Days, 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.
(g) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders of
Warrants during normal business hours at its office. The Company shall supply
the Warrant Agent from time to time with such numbers of copies of this
Agreement as the Warrant Agent may request.
Section 5. PAYMENT OF TAXES.
The Company shall pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; PROVIDED that
the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer involved in the issue of any Warrant Certificates or
any certificates for Warrant Shares in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Warrant Certificates
unless or until the Person or Persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
Section 6. RESERVATION OF WARRANT SHARES; REGISTRATION OF WARRANT SHARES.
(a) The Company shall at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock and/or the 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.
(b) The Company or, if appointed, the transfer agent for the
Common Stock (the "TRANSFER AGENT") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company shall keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will promptly notify the Warrant Agent
of every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from
time to time from such Transfer Agent the stock certificates required to honor
outstanding Warrants upon exercise thereof in accordance with the terms of this
Agreement. The Company shall supply such Transfer Agent with duly executed
certificates for such purposes and shall provide or otherwise make available any
cash which may be payable as provided in SECTION 9 hereof. The Company shall
furnish such Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each holder pursuant to SECTION 11
hereof.
(c) Before or concurrently with taking any action which would
cause an adjustment pursuant to SECTION 8 hereof to reduce the Exercise Price
below the then par value (if any) of the
22
Warrant Shares, the Company shall 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 validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
(d) The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants shall, upon issue, be fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issuance thereof.
Section 7. OBTAINING STOCK EXCHANGE LISTINGS.
The Company shall from time to time take all action which may be
reasonably necessary so that the Warrant Shares, immediately upon their issuance
upon the exercise of Warrants, will be listed on a principal securities
exchange, automated quotation system or other market within the United States of
America, if any, on which other shares of Common Stock are then listed, if any.
Section 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE.
The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant shall be subject to adjustment from time to time upon
the occurrence of the events enumerated in this SECTION 8. Notwithstanding
anything to the contrary in this Agreement, in no event shall the Exercise Price
be less than the lower of the par value of the Common Stock or $0.01 per share
of Common Stock. For purposes of this SECTION 8, "COMMON STOCK" means shares now
or hereafter authorized of any class of common shares of the Company however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
In addition to the adjustments required under this SECTION 8, the
Company may, at any time reduce the Exercise Price to any amount greater than or
equal to $0.01 per share for any period of time (but not less than 20 Business
Days) deemed appropriate by the Board of Directors of the Company.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company (i)
pays a dividend or makes a distribution on its Common Stock payable in shares of
its Common Stock, (ii) subdivides its outstanding shares of Common Stock into a
greater number of shares, (iii) combines its outstanding shares of Common Stock
into a smaller number of shares, (iv) makes a distribution on its Common Stock
in shares of its capital stock other than Common Stock or (v) issues by
reclassification of its Common Stock any shares of its capital stock, then the
Exercise Price in effect immediately prior to such action shall, subject to the
second sentence of the first paragraph of this SECTION 8, be proportionately
adjusted so that the holder of any then outstanding Warrant exercised after such
action may receive the aggregate number and kind of shares of capital stock of
the Company which such holder would have owned immediately following such action
assuming the exercise of such Warrant immediately prior to such action.
23
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If, after an adjustment pursuant to CLAUSE (V) above, a holder of a
Warrant upon exercise of it may receive shares of two or more classes of capital
stock of the Company, the Company shall determine, in good faith, the allocation
of the adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall after such action be subject to adjustment on terms
comparable to those applicable to Common Stock in this SECTION 8. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any
rights, options or warrants to all holders of its Common Stock entitling them
for a period expiring within 45 days after the record date set forth below to
subscribe for shares of Common Stock or securities convertible into, or
exchangeable or exercisable for, shares of Common Stock, in either case, at a
price per share less than the Fair Market Value (as defined in SUBSECTION (G) of
this SECTION 8) per share on that record date, the Exercise Price shall be
adjusted in accordance with the formula:
O + N X P
-----
E' = E x M
------------------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock
outstanding on the record date.
N = the number of additional shares of Common Stock
issued pursuant to such rights, options or
warrants.
P = the price per share of the additional shares.
M = the Fair Market Value per share of Common Stock on
the record date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes
to all holders of its Common Stock any of its assets (including cash), debt
securities, preferred stock or any rights
24
or warrants to purchase assets (including cash), debt securities, preferred
stock or other securities of the Company, the Exercise Price shall be adjusted
in accordance with the formula:
E' = E x M - F
----------------------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Market Value per share of Common
Stock on the record date mentioned below.
F = the fair market value on the record date
of the debt securities, preferred stock,
assets, securities, rights or warrants to be
distributed in respect of one share of
Common Stock as determined in good faith by
the Board of Directors of the Company.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This SECTION 8(C) shall not apply to cash dividends or other cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. In addition, this SECTION 8(C) shall not apply to rights,
options or warrants referred to in SECTION 8(B) hereof.
(d) ADJUSTMENT FOR COMMON STOCK ISSUE.
(i) If the Company issues shares of Common Stock for a
consideration per share less than the Fair Market Value per share on
the date the Company fixes the offering price of such additional
shares, the Exercise Price shall be adjusted in accordance with the
formula:
P
---
E' = E x O + M
-------------------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately
prior to the issuance of such additional shares.
P = the aggregate consideration received for the
issuance of such additional shares.
25
M = the Fair Market Value per share on the date of
issuance of such additional shares.
A = the number of shares outstanding immediately
after the issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
(ii) This SECTION 8(D) shall not apply to:
(1) any of the transactions described in SUBSECTIONS (A),
(B) and (C) of this SECTION 8,
(2) the exercise of Warrants,
(3) the conversion, exchange or exercise of securities
outstanding as of the date hereof and convertible into or exchangeable
or exercisable for Common Stock or other securities and the issuance of
any securities which requires an adjustment to be made under SECTION
8(E) or does not require an adjustment pursuant to the last two
paragraphs of SECTION 8(E),
(4) the issuance of Common Stock (and warrants or options
exercisable therefore) to employees, officers, consultants or directors
of the Company or its subsidiaries under bona fide employee benefit
plans or otherwise by written agreement adopted by the Board of
Directors and approved when required by law by the holders of Common
Stock, if such Common Stock would otherwise be covered by this SECTION
8(D) (but only to the extent that the aggregate number of shares
excluded hereby and issued after the date of this Warrant Agreement
shall not exceed 25% of the Common Stock outstanding at the time of the
adoption of any such plan or written agreement),
(5) the issuance of Common Stock to shareholders or
equity holders of any Person that merges with or into the Company, or
with or into any subsidiary of the Company, in proportion to such
shareholders' or equity holders' stock or equity holdings of such
Person immediately prior to such merger, in connection with such
merger; PROVIDED that if such Person is an Affiliate of the Company and
any such transaction or series of transactions has an aggregate value
of $1,000,000 or more, the Board of Directors, including a majority of
the independent directors, shall have determined that the consideration
received by the Company in such merger is fair to the Company from a
financial point of view; provided further that if the Board of
Directors shall not include at least one independent director who was
appointed, nominated or designated to the Board of Directors other than
through any right of appointment, nomination or designation by an
Affiliate of the Company, the Company shall have obtained a fairness
opinion from a nationally recognized investment banking, appraisal or
valuation firm which is not an Affiliate of the Company to the effect
that the consideration received by the Company in such merger is fair
to the Company from a financial point of view,
26
(6) the issuance of securities upon the conversion,
exchange or exercise of other securities, warrants, options or similar
rights if the effective conversion, exchange or exercise price is not
less than the Fair Market Value per share of such security at the time
the security, warrant, option or right so converted, exchanged or
exercised was issued or granted, or
(7) the issuance of shares of Common Stock pursuant to
rights, options or warrants which were originally issued in a
Non-Affiliate Sale (as defined below) together with one or more other
securities as part of a unit at a price per unit.
(e) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the Company
issues any securities convertible into or exchangeable or exercisable for Common
Stock (other than securities issued in transactions described in SUBSECTIONS
(A), (B) and (C) of this SECTION 8 or excluded from the application of Section
8(d) pursuant to clause (ii) of Section 8(d)) for a consideration per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the Fair Market Value per share on the date of issuance of
such securities, the Exercise Price shall be adjusted in accordance with the
formula:
P
---
E' = E x O + M
--------------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately
prior to the issuance of such securities.
P = the aggregate consideration received for the
issuance of such securities.
M = the Fair Market Value per share on the date of
issuance of such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities at
the initial conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion, exchange or exercise of such
securities.
This SUBSECTION (E) shall not apply to warrants or other convertible
securities issued to shareholders, debt holders or equity holders of any Person
that merges with or into the Company,
27
or with or into any subsidiary of the Company, in proportion to such
shareholders', debt holders' or equity holders' stock, debt or equity holdings
of such Person immediately prior to such merger, in connection with such merger,
PROVIDED that if such Person is an Affiliate of the Company, the Board of
Directors, including a majority of the independent directors, shall have
determined that the consideration received by the Company in such merger is fair
to the Company from a financial point of view; PROVIDED further that if the
Board of Directors shall not include at least one Disinterested Director (as
defined in SECTION 8(G) below), the Company shall have obtained a fairness
opinion from a nationally recognized investment banking, appraisal or valuation
firm which is not an Affiliate of the Company to the effect that the
consideration received by the Company in such merger is fair to the Company from
a financial point of view.
(f) CONSIDERATION RECEIVED. For purposes of any computation
respecting consideration received pursuant to SUBSECTIONS (D) and (E) of this
SECTION 8, the following shall apply:
(1) in the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, PROVIDED
that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive and non-appealable, and described in a resolution
of the Board of Directors which shall be filed with the Warrant Agent;
(3) in the case of the issuance of securities convertible
into or exchangeable or exercisable for shares, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities plus the
additional minimum consideration, if any, to be received by the Company
upon the conversion, exchange or exercise thereof (the consideration in
each case to be determined in the same manner as provided in CLAUSES
(1) and (2) of this SUBSECTION (F)); and
(4) in the case of the issuance of shares of Common Stock
pursuant to rights, options or warrants which rights, options or
warrants were originally issued together with one or more other
securities as part of a unit at a price per unit, the consideration
shall be deemed to be the fair value of such rights, options or
warrants at the time of issuance thereof as determined in good faith by
the Board of Directors whose determination shall be conclusive and
non-appealable and described in a resolution of the Board of Directors
which shall be filed with the Warrant Agent plus the additional
consideration, if any, to be received by the Company upon the exercise,
conversion or exchange thereof (as determined in the same manner as
provided in CLAUSES (1) and (2) of this SUBSECTION (F)).
(g) FAIR MARKET VALUE. For purposes of SECTIONS 8 (B), (C), (D)
and (E) hereof, the "FAIR MARKET VALUE" per share of Common Stock at any date of
determination shall be (1) in connection with a sale by the Company to a party
that is not an Affiliate of the Company in an
28
arm's-length transaction (a "NON-AFFILIATE SALE"), the price per security at
which such security is sold and (2) in connection with any sale by the Company
to an Affiliate of the Company, (A) the last price per security at which such
security was sold in a Non-Affiliate Sale within the three-month period
preceding such date of determination and (B), if CLAUSE (A) is not applicable,
the fair market value of such security determined in good faith by (i) a
majority of the Board of Directors of the Company, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
For purposes of this SECTION 8(G), "DISINTERESTED DIRECTOR" means, in
connection with any issuance of securities that gives rise to a determination of
the Fair Market Value thereof, each member of the Board of Directors who is not
an officer, employee, director or other Affiliate of the party to whom the
Company is proposing to issue the securities giving rise to such determination.
For purposes of this SECTION 8(G), "AFFILIATE" of any specified Person
means (A) any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified Person and (B)
any director or officer of such specified Person. For purposes of this
definition "CONTROL" (including, with correlative meanings, the terms
"CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
(h) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. No adjustment in
the Exercise Price need be made unless the adjustment would require an increase
or decrease of at least 1% in the Exercise Price. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this SECTION 8 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be, it being
understood that no such rounding shall be made under SECTION 8(P).
(i) WHEN NO ADJUSTMENT REQUIRED. With respect to Warrants of any
holder, no adjustment need be made for a transaction referred to SECTION 8(A),
(B), (C), (D), (E) or (F) hereof, if such holder is to participate (without
being required to exercise its Warrants) in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction. No adjustment need be made for (i) rights to purchase Common
Stock pursuant to a Company plan for reinvestment of dividends or interest, (ii)
a change in the par value or no par value of the Common Stock or (iii) that
would result in the Exercise Price being less than the par value of the Common
Stock. To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(j) NOTICE OF ADJUSTMENT. Whenever the Exercise Price is adjusted,
the Company shall provide the notices required by SECTION 11 hereof.
29
(k) REORGANIZATION OF COMPANY. Immediately after the date hereof,
if the Company consolidates or merges with or into, or transfers or leases all
or substantially all its assets to, any Person, upon consummation of such
transaction the Warrants shall automatically become exercisable for the kind and
amount of securities, cash or other assets which the holder of a Warrant would
have owned immediately after the consolidation, merger, transfer or lease if the
holder had exercised the Warrant immediately prior to the consummation of the
transaction. Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the Person to which such sale or conveyance shall have been
made, shall enter into (i) a supplemental Warrant Agreement so providing and
further providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this SECTION 8(K) and (ii) a
supplement to the Equity Registration Rights Agreement providing for the
assumption of the Company's obligations thereunder. The successor Company shall
mail to Warrant holders a notice describing the supplemental Warrant Agreement
and Equity Registration Rights Agreement. If the issuer of securities
deliverable upon exercise of Warrants under the supplemental Warrant Agreement
is an Affiliate of the formed, surviving, transferee or lessee corporation, such
issuer shall join in the supplemental Warrant Agreement and Equity Registration
Rights Agreement. If this SECTION 8(K) shall be applicable, SECTIONS 8(A), (B),
(C), (D), (e) and (F) hereof shall not be applicable.
(l) COMPANY DETERMINATION FINAL. Any determination that the
Company or the Board of Directors must make pursuant to SECTION 8(A), (C), (D),
(E), (F), (G), (H) or (I) hereof is conclusive and non-appealable.
(m) WARRANT AGENT'S DISCLAIMERS. The Warrant Agent shall have no
duty to determine when an adjustment under this SECTION 8 should be made, how it
should be made or what it should be. The Warrant Agent shall have no duty to
determine whether a supplemental warrant agreement under SECTION 8(K) need be
entered into or whether any provisions of a supplemental warrant agreement under
SECTION 8(K) hereof are correct. The Warrant Agent shall not be responsible for
the Company's failure to comply with SECTION 8.
(n) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED. In any case in which
this SECTION 8 shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to SECTION 11 hereof;
PROVIDED that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
Warrant Shares, other capital stock and cash upon the occurrence of the event
requiring such adjustment.
(o) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to this SECTION 8, each Warrant outstanding prior to the
making of the adjustment in the Exercise Price shall thereafter evidence the
right to receive upon payment of the adjusted Exercise Price that number of
shares of Common Stock (calculated to the nearest hundredth) obtained from the
following formula:
30
N' = N x E
--
E'
where:
N' = the adjusted number of Warrant Shares issuable
upon exercise of a Warrant by payment of the
adjusted Exercise Price.
N = the number or Warrant Shares previously issuable
upon exercise of a Warrant by payment of the
Exercise Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(p) FORM OF WARRANTS. Irrespective of any adjustments in the
Exercise Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
Section 9. FRACTIONAL INTERESTS.
The Company shall not be required to issue fractional Warrant Shares on
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 Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except for
the provisions of this SECTION 9, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall calculate the amount in cash
equal to the Fair Market Value per Warrant Share and pay such amount, as
determined on the day immediately preceding the date the Warrant is presented
for exercise, multiplied by such fraction, computed to the nearest whole U.S.
cent.
Section 10. LIQUIDATED DAMAGEs.
(a) The Company acknowledges and agree that the holders of the
Warrants will suffer damages if the Company fails to fulfill its obligations
under the Equity Registration Rights Agreement and that it would not be feasible
to ascertain the extent of such damages with precision. Accordingly, the Company
agrees that if:
(i) the registration statement required to be filed by
the Equity Registration Rights Agreement is not declared effective on
or prior to the 240th day following the issue date of the Warrants or,
if that day is not a Business Day, the next day that is a Business Day;
or
(ii) the registration statement required to by filed by
the Equity Registration Rights Agreement does not remain continuously
effective for the Effectiveness Period (subject to any Delay Periods),
in each case as defined in the Equity Registration Rights Agreement,
31
(each such event referred to in clauses (i) and (ii) a "REGISTRATION DEFAULT"),
liquidated damages in the form of cash payments ("LIQUIDATED DAMAGES") will be
due and payable on the affected Warrants. The rate of Liquidated Damages will be
$0.63 per Warrant for the first 90-day period immediately following the
occurrence of a Registration Default, increasing by an additional $0.63 per
Warrant with respect to each subsequent 90-day period up to a maximum amount of
additional interest of $2.52 per Warrant, from and including the date on which
any such Registration Default shall occur to, but excluding, the earlier of (1)
the date on which all Registration Defaults have been cured or (2) the date on
which all the Warrants otherwise become freely transferable by Holders other
than affiliates of the Issuer without further registration under the Securities
Act.
Notwithstanding the foregoing, (1) the amount of Liquidated Damages
payable shall not increase by more than the foregoing rates if more than one
Registration Default has occurred and is pending and (2) a holder of Warrants
who is not entitled to the benefits of such registration statement (I.E., such
holder has not elected to include information) shall not be entitled to
Liquidated Damages with respect to a Registration Default.
(b) So long as Warrants remain outstanding, the Company shall
notify the Warrant Agent and DTC within five Business Days after each and every
date on which an event occurs in respect of which Liquidated Damages is required
to be paid. Any amounts of Liquidated Damages due with respect to the Warrants
pursuant to clauses (a)(i) or (a)(ii) of this SECTION 10 will be payable to
Persons who are registered holders of Warrants at the close of business on each
June 1 and December 1, in cash semi-annually on each June 15 and December 15
(each a "DAMAGES PAYMENT DATE"), commencing with the first such date occurring
after any such Liquidated Damages commence to accrue. If the Company is required
make a payment of Liquidated Damages in accordance with the preceding sentence,
the Company shall deposit such amounts of Liquidated Damages with the Warrant
Agent, as paying agent with respect to the Warrants, and payment of Liquidated
Damages may be made by check mailed to the holders of Warrants at their
addresses set forth in the register of holders; PROVIDED that payment by wire
transfer of immediately available funds will be required with respect to
Liquidated Damages on all Global Warrants and any other Warrants the holders of
which will have provided wire transfer instructions to the Warrant Agent at
least two Business Days prior to the payment date.
Section 11. NOTICES TO WARRANT HOLDERS.
(a) Upon any adjustment of the Exercise Price pursuant to SECTION
8 hereof, the Company shall promptly thereafter (i) cause to be filed with the
Warrant Agent a certificate of a firm of independent public accountants selected
by the Board of Directors of the Company (who may be the regular auditors of the
Company) setting forth the 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 in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause, at the Company's expense, to be given to each of
the registered holders of Warrants at the address appearing on the Warrant
register for each such registered holder written notice of such adjustments by
first-class mail, postage
32
prepaid. Where appropriate, such notice may be given in advance and included as
a part of the notice required to be mailed under the other provisions of this
SECTION 11.
(b) In the event:
(i) that 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 of any other
subscription rights or warrants;
(ii) that the Company shall authorize the distribution to
all holders of shares of Common Stock of evidences of its indebtedness
or assets (other than dividends or cash distributions paid out of
consolidated current or retained earnings as shown on the books of the
Company prepared in accordance with generally accepted accounting
principles or dividends payable in shares of Common Stock or
distributions);
(iii) 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 conveyance or transfer of the properties and assets
of the Company 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 as a result of a subdivision or
combination), or a tender offer or exchange offer by the Company for
shares of Common Stock;
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(v) that the Company proposes to take any action (other
than actions of the character described in SECTION 8(A) hereof) which
would require an adjustment of the Exercise Price pursuant to SECTION 8
hereof;
then the Company shall cause to be filed with the Warrant Agent and shall, at
the Company's expense, cause to be given to each registered holder of Warrants
at the address appearing on the Warrant register, at least 10 days prior to the
applicable record date hereinafter specified, or promptly in the case of events
for which there is no record date, by first-class mail, postage prepaid, a
written notice stating (x) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such rights, options, warrants or
distribution are to be determined, (y) the initial expiration date set forth in
any tender offer or exchange offer for shares of Common Stock, or (z) the date
on which any such consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective or consummated, and
the date as of which it is expected that holders of record 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,
conveyance, transfer, dissolution, liquidation or winding up. The failure to
give the notice required by this SECTION 11 or any defect therein shall not
affect the legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up, or the vote upon any action.
33
(c) Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders of Warrants the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
Section 12. MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
(a) Any corporation into which the Warrant Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto. 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.
(b) 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 13. 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 or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise specifically provided.
(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.
34
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (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 Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel. The Warrant Agent shall not be liable for any error of judgment
made in good faith by any officer within its corporate trust department or a
person performing similar functions, unless it is proved that the Warrant Agent
was grossly negligent in ascertaining the pertinent facts. The Warrant Agent
shall not be liable with respect to any action it takes or omits to take in good
faith in accordance with a written direction received by it pursuant to this
Agreement or which it reasonably believes to be authorized or within its rights
or powers under this Agreement. The Warrant Agent may act through its attorneys
and agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care. The duties of the Warrant Agent shall be
determined solely by the express provisions of this Agreement and the Warrant
Agent need perform only those duties as are specifically set forth in this
Agreement and no covenants or obligations shall be implied in or read into this
Agreement against the Warrant Agent. The permissive right of the Warrant Agent
to take any action under this Agreement shall not be construed as a duty to so
act.
(d) The Warrant Agent shall incur no liability or responsibility
to the Company or to any holder of any Warrant Certificate for any action taken
or not taken in reliance on any Warrant Certificate, notice, resolution, waiver,
statement, instrument, opinion, report, request, direction, consent, order,
certificate, or other paper, document or instrument believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties. The
Warrant Agent shall not be bound to make any investigation into the facts or
matters stated in any such Warrant Certificate, certificate of shares or other
evidence of indebtedness, notice, resolution, waiver, statement, instrument,
opinion, report, request, direction, consent, order, certificate or other paper
or document.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement (including reasonable fees and
expenses of counsel). The Company shall indemnify the Warrant Agent against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Warrant Agreement, including the costs and expenses of enforcing this Agreement
against the Company and defending itself against any claim (whether asserted by
the Company or any holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its gross
negligence or bad faith. The Warrant Agent shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Warrant Agent to so
notify the Company shall not relieve the Company of its obligations hereunder.
The Company shall defend the claim and the Warrant Agent shall cooperate in the
defense; PROVIDED that any settlement of a claim shall be approved in writing by
the Warrant Agent, which
35
approval shall not be unreasonably withheld, conditional or delayed. The Warrant
Agent may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld,
conditioned or delayed. 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, including the Warrant Agent's officers,
directors, agents and employees, and each agent, custodian and other person
employed to act hereunder.
(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 registered holders of Warrants
shall furnish the Warrant Agent with reasonable security and indemnity for any
costs and expenses which may be incurred, but this provision shall not affect
the power of the Warrant Agent to take such action as it may consider proper,
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 registered holders of the Warrants, as their respective
rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(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 gross negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent makes no
representation as to, and shall not be accountable with respect to, the validity
or value or the kind or amount of any Warrant Shares or of any securities or
property which may at any time be issued or delivered upon the exercise of any
Warrant or with respect to whether any such Warrant Shares or other securities
36
will when issued be validly issued and fully paid and nonassessable, and makes
no representation with respect thereto.
(j) The Warrant Agent shall not be required to risk or expend its
own funds or otherwise incur any liability (financial or otherwise) on the
performance of its obligations and duties hereunder. The Warrant Agent shall not
be required to give any bond or surety in respect of the performance or exercise
of its powers or duties hereunder.
(k) The obligations of the Company under this Section 13 shall
survive the exercise and the expiration of the Warrant Certificates or the
resignation and removal of the Warrant Agent.
(l) The Warrant Agent shall not be under any liability for
interest on, and shall not be required to invest, any monies at any time
received by it pursuant to any of the provisions of this Agreement or of the
Warrant Certificates. Money and assets held by the Warrant Agent need not be
segregated from other funds or assets held by the Warrant Agent except to the
extent required by law.
(m) No Warrant Agent under this Agreement shall be personally
liable for any action or omission of any predecessor or successor Warrant Agent.
(n) As a condition to taking any action requested by the Company
under this Agreement, the Warrant Agent may request an Opinion of Counsel and a
certificate of an Officer of the Company to the effect that the requested action
complies with the applicable provisions of this Agreement.
(o) The Warrant Agent and the Warrant Registrar shall not be
responsible for the computation of any amounts under this Agreement, including,
without limitation, any adjustment to the Exercise Price or any amount to be
paid in respect of any fractional share. The Warrant Agent and the Warrant
Registrar shall not be responsible for determining whether any Liquidated
Damages are due or calculating the amount of any Liquidated Damages.
(p) Whether or not therein expressly so provided, every provision
of this Agreement that in any way relates to the Warrant Agent is subject to the
provisions of this SECTION 13.
Section 14. CHANGE OF WARRANT AGENT.
If the Warrant Agent shall resign or become incapable of acting as
Warrant Agent, the Company shall appoint a successor to such Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation or incapacity by the Warrant
Agent or by the registered holder of a Warrant Certificate, then the resigning
or incapable Warrant Agent or the registered holder of any Warrant may apply to
any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor to such Warrant Agent, either
by the Company or by such a court, the duties of the Warrant Agent shall be
carried out by the
37
Company. The holders of a majority of the unexercised Warrants, by written
notice to the Warrant Agent and the Company, shall be entitled at any time to
remove the Warrant Agent and appoint a successor to such Warrant Agent. Such
successor to the Warrant Agent need not be approved by the Company or the former
Warrant Agent. After appointment the successor to the Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; PROVIDED
that the former Warrant Agent shall deliver and transfer to the successor to the
Warrant Agent any property at the time held by it hereunder and execute and
deliver any further assurance, conveyance, act or deed necessary for the purpose
upon written request therefor. Failure to give any notice provided for in this
SECTION 14, however, or any defect therein, shall not affect the legality or
validity of the appointment of a successor to the Warrant Agent.
Section 15. REPORTS.
(a) The Company agrees with each holder, for so long as any
Warrants remain outstanding and during any period in which the Company (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any holder, to such holder or beneficial owner of Warrants in
connection with any sale thereof and any prospective purchaser of such Warrants
designated by such holder or beneficial owner, the information required by Rule
144(A)(d)(4) under the Act in order to permit resales of such Warrants pursuant
to Rule 144A, and (ii) is subject to Section 13 or 15(d) of the Exchange Act, to
make all filings required thereby in a timely manner in order to permit resales
of such Warrants pursuant to Rule 144A.
(b) The Company shall provide the Warrant Agent with a sufficient
number of copies of all such reports that the Warrant Agent may be required to
deliver to the holders of the Warrants under this SECTION 15. Any such delivery
shall be on the instructions of and at the expense of the Company.
Section 16. CUSIP NUMBERS.
A "CUSIP" number shall be printed on the Warrants, and the Warrant
Agent shall use the CUSIP number in notices purchase or exercise as a
convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Warrants and that reliance may be placed only on
the other identification numbers printed on the Warrants. The Company shall
promptly notify the Warrant Agent of any change in the CUSIP number.
Section 17. NOTICES TO COMPANY AND WARRANT AGENT.
Any notice or demand authorized by this Agreement to be given or made
by the Warrant Agent or by the registered holder of any Warrant to or on the
Company shall be sufficiently given or made when received 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:
38
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to:
Mayer, Brown, ▇▇▇▇ & Maw LLP
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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
corporate trust office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder(s) of any Warrant to the Warrant Agent shall be
sufficiently given when received if deposited in 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 at its
corporate trust office as follows:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Any notice or communication to a registered holder of Warrants will be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address
appearing on the Warrant register. Failure to mail a notice or communication to
such a holder or any defect in it will not affect its sufficiency with respect
to other such holders.
Section 18. SUPPLEMENTS AND AMENDMENTS.
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement without the approval of any holders of Warrants in order to
cure any ambiguity or to correct or supplement any provision contained herein
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 the
holders of Warrants. In formulating its opinion on such matters, the Warrant
Agent shall be entitled to request, and shall be justified in relying on, an
Opinion of Counsel or such other evidence as it deems appropriate. Any amendment
or supplement to this Agreement that has a materially
39
adverse effect on the interests of the holders of Warrants shall require the
written consent of the holders of a majority of the then outstanding Warrants
(excluding Warrants held by the Company or any of its Affiliates). The consent
of each holder of Warrants affected shall be required for any amendment pursuant
to which the Exercise Price would be increased or the number of Warrant Shares
purchasable upon exercise of Warrants would be decreased (other than pursuant to
adjustments provided in this Agreement).
Section 19. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 20. TERMINATION.
This Agreement shall terminate at 5:00 p.m., New York City time on
December 15, 2010. Notwithstanding the foregoing, this Agreement will terminate
on any earlier date if all Warrants have been exercised. The provisions of
SECTION 13 shall survive such termination.
Section 21. GOVERNING LAW.
(a) This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of New York
and for all purposes shall be construed in accordance with the internal laws of
said State.
(b) Each of the parties hereto irrevocably consents to the
non-exclusive jurisdiction of Supreme Court of New York, New York county and the
United States District Court for the Southern District of New York, New York
county and waives trial by jury in any action or proceeding with respect to this
Agreement.
Section 22. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the registered 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 registered holders of Warrants.
Section 23. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
[Signature Page Follows]
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NATIONAL COAL CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇
------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇
Title: CEO
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Warrant Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
41
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY, THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO REGISTRATION.
THE HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE
144A")), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY AND THE
WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE IN AN OFFSHORE TRANSACTION WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF
REGULATION S, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY AND THE
WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, PRIOR TO THE DATE WHICH IS TWO
YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE 144(K) (OR ANY
SUCCESSOR PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS SECURITY) AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY AND THE
WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE FOR ITS OWN
A-1
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND THE SECURITIES LAWS OF ANY OTHER JURISDICTION, INCLUDING ANY STATE OF
THE UNITED STATES, SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S, OR TRANSFER
AGENT'S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
WARRANT AGENT OR TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS SECURITY WAS INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE
"UNITS"), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT OF THE COMPANY'S
10.5% SENIOR SECURED NOTES DUE 2010 (THE "NOTES") AND ONE WARRANT TO PURCHASE
31.5024 SHARES OF THE COMPANY'S COMMON STOCK (THE "WARRANTS").
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING
OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT FOR A REGISTERED
EXCHANGE OFFER WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (III) THE DATE ON WHICH A SHELF REGISTRATION STATEMENT WITH
RESPECT TO THE WARRANT SHARES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND
(IV) SUCH DATE AS ▇▇▇▇▇▇▇▇▇ & COMPANY, INC. IN ITS SOLE DISCRETION SHALL
DETERMINE, THE SECURITY EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY AS, A UNIT.
THE HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE, BY ITS ACCEPTANCE HEREOF, AGREES NOT TO ENGAGE IN ANY HEDGING
TRANSACTION UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. THE HOLDER OF THIS
SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, BY ITS
ACCEPTANCE HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR ANY INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THESE LEGENDS.
THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE WARRANT
AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT
A-2
THAT (I) THE WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 3.5 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE WARRANT
AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE WARRANT AGENT FOR
CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT AGREEMENT AND (IV) THIS
GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
A-3
NATIONAL COAL CORP.
WARRANT CERTIFICATE
CUSIP No.
No. Warrants
This Warrant Certificate certifies that Cede & Co., or its registered
assigns, is the registered holder of [ _____ ] Warrants expiring December 15,
2010 (the "WARRANTS") to purchase shares of common stock, par value $0.0001 (the
"COMMON STOCK"), of National Coal Corp., a Florida corporation (the "COMPANY").
Each Warrant entitles the registered holder upon exercise at any time until 5:00
p.m. New York City Time on December 15, 2010 to receive from the Company [ ___ ]
fully paid and nonassessable shares of Common Stock (the "WARRANT SHARES") at
the initial exercise price (the "EXERCISE PRICE") of $8.50 per share payable
upon surrender of this Warrant Certificate and payment of the Exercise Price at
the office or agency of the Warrant Agent (as hereinafter defined), but only
subject to the conditions set forth herein and in the Warrant Agreement (as
hereinafter defined) referred to on the reverse hereof. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
No Warrant may be exercised after 5:00 p.m., New York City Time on
December 15, 2010. To the extent not exercised by such time, any such Warrant
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, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
* * * * * * * * *
A-4
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed below.
DATED:
NATIONAL COAL CORP.
By:
---------------------------------------------
Name:
Title:
Countersigned:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Warrant Agent
By:_____________________________________
Authorized Signature
A-5
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring at 5:00 p.m. New York City time on
December 15, 2010 entitling the holder on exercise to receive shares of Common
Stock, and are issued or to be issued pursuant to a Warrant Agreement dated as
of December 29, 2005 (the "WARRANT AGREEMENT"), duly executed and delivered by
the Company to ▇▇▇▇▇ Fargo Bank, National Association, as the initial warrant
agent (the "WARRANT AGENT"), which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument 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 (the
words "holders" or "holder" meaning the registered holders or registered holder)
of the Warrants. Capitalized terms used but not defined herein have the meaning
ascribed to such terms in the Warrant Agreement. A copy of the Warrant Agreement
may be obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or before 5:00 p.m. New York
City time on December 15, 2010. In order to exercise all or any of the Warrants
represented by this Warrant Certificate, the holder must deliver to the Warrant
Agent at its corporate trust office set forth in Section 17 of the Warrant
Agreement this Warrant Certificate and the form of election to purchase on the
reverse hereof 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 upon payment to the
Warrant Agent for the account of the Company of the Exercise Price, for the
number of Warrant Shares in respect of which such Warrants are then exercised.
No adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant. In addition, if certain events set forth in the
Warrant Agreement occur, this Warrant will be exercised without any further
action on the part of the holder.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted; provided that no adjustment may be made that reduces
the Exercise Price below the par value of the Common Stock. If the Exercise
Price is adjusted, the Warrant Agreement provides that the number of shares of
Common Stock issuable upon the exercise of each Warrant shall be adjusted. 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.
The Company has agreed pursuant to an Equity Registration Rights
Agreement dated as of December 29, 2005 between the Company and the Initial
Purchaser (the "EQUITY REGISTRATION RIGHTS AGREEMENT") to file a shelf
registration statement covering resales of the Warrants and Warrant Shares and
to use commercially reasonable efforts to have that resale registration
statement declared effective within 240 days of the issue date, and to keep the
resale registration statement effective for two years following the effective
date of the registration statement (unless the securities are sold earlier or
cease to be restricted securities).
Warrant Certificates, when surrendered at the corporate trust office of
the Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized
A-6
in writing, may be exchanged, in the manner and subject to the limitations
provided in the Warrant Agreement, but without payment of any service charge,
for another Warrant Certificate or Warrant Certificates of like tenor evidencing
in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the corporate trust office of the Warrant Agent a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
Each holder, by its acceptance of this Warrant, agrees to be bound by
the terms of the Warrant Agreement and the Equity Registration Rights Agreement,
and all such replacements thereof, and each holder hereby authorizes the Warrant
Agent to bind the holders to the extent provided in the Warrant Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-7
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and herewith tenders payment for such shares to the order of NATIONAL COAL
CORP., [cash] [Warrants] [Notes] equal [in fair market value] [in principal
amount] to $__________ 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 purchasable
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 Agent, 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 Agent in
addition to, or in substitution for, Stamp, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-8
NATIONAL COAL CORP.
COUNTERSIGNATURE ORDER
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 55,000 WARRANTS TO PURCHASE COMMON STOCK
Ladies and Gentlemen:
Pursuant to Section 3.2 of the Warrant Agreement dated as the
date hereof (the "Warrant Agreement"), among National Coal Corp., a Florida
corporation (the "Company"), and ▇▇▇▇▇ Fargo Bank, National Association, as
warrant agent (the "Warrant Agent"), relating to the Company's 55,000 Warrants
(as defined in the Warrant Agreement) to purchase its Common Stock (as defined
in the Warrant Agreement), you are hereby directed (i) to countersign on
December 29, 2005, in the manner provided in the Warrant Agreement, the
Warrants, heretofore duly executed by a proper officer of the Company and
delivered to you as provided in the Warrant Agreement, (ii) to deliver such
countersigned Warrants in the denominations and registered in the names
heretofore requested by ▇▇▇▇▇▇▇▇▇ & Company, Inc. and (iii) to hold the
certificates representing the Warrants, as custodian for The Depository Trust
Company.
Very truly yours,
NATIONAL COAL CORP.
By: ______________________________________
Name:
Title:
A-9
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of December
29, 2005 (the "WARRANT Agreement"), between National Coal Corp., as issuer (the
"COMPANY"), and ▇▇▇▇▇ Fargo Bank, National Association, as warrant agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
___________________, (the "TRANSFEROR") owns and proposes to transfer
the ___________ Warrant[s] or interest in such Warrant[s] specified in Annex A
hereto (the "TRANSFER"), to ________________________ (the "TRANSFEREE"), as
further specified in ANNEX A hereto. In connection with the Transfer, the
Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL WARRANT OR A DEFINITIVE WARRANT PURSUANT TO RULE
144A. The Transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the "SECURITIES
ACT"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Warrant is being transferred to a Person that
the Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Warrant for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Warrant Agreement, the transferred beneficial
interest or Definitive Warrant will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Warrant
and/or the Definitive Warrant and in the Warrant Agreement and the Securities
Act.
2. |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL WARRANT OR A DEFINITIVE WARRANT PURSUANT TO
REGULATION S.
B-1
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Warrant Agreement, the transferred beneficial interest or
Definitive Warrant will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Warrant and/or
the Definitive Warrant and in the Warrant Agreement and the Securities Act.
3. |_| CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL WARRANT OR A DEFINITIVE WARRANT PURSUANT
TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Warrants and Restricted
Definitive Warrants and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United States,
and accordingly the Transferor hereby further certifies that (check one):
(a) |_| such Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act; or
(b) |_| such Transfer is being effected to the Company or
a subsidiary thereof or
(c) |_| such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that
it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a
Restricted Global Warrant or Restricted Definitive Warrants and the
requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of EXHIBIT
D to the Warrant Agreement and (2) if the Company requests, an Opinion
of Counsel provided by the Transferor or the Transferee (a copy of
which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of
the Warrant Agreement, the transferred beneficial interest or
Definitive Warrant will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI
B-2
Global Warrant and/or the Definitive Warrants and in the Warrant
Agreement and the Securities Act.
4. |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL WARRANT OR OF AN UNRESTRICTED DEFINITIVE
WARRANT.
(a) |_| CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i)
The Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act and in compliance with the transfer
restrictions contained in the Warrant Agreement and any applicable blue
sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Warrant Agreement and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrants, on
Restricted Definitive Warrants and in the Warrant Agreement.
(b) |_| CHECK IF TRANSFER IS PURSUANT TO REGULATION S.
(i) The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and in compliance with
the transfer restrictions contained in the Warrant Agreement and any
applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Warrant
Agreement, the transferred beneficial interest or Definitive Warrant
will no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Warrants,
on Restricted Definitive Warrants and in the Warrant Agreement.
(c) |_| CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with
an exemption from the registration requirements of the Securities Act
other than Rule 144, Rule 903 or Rule 904 and in compliance with the
transfer restrictions contained in the Warrant Agreement and any
applicable blue sky securities laws of any State of the United States
and (ii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Warrant
Agreement, the transferred beneficial interest or Definitive Warrant
will not be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Warrants or
Restricted Definitive Warrants and in the Warrant Agreement.
B-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
---------------------------------
Name:
Title:
Dated: _____________________
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
5. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in the:
(i) |_| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or
(ii) |_| Regulation S Global Warrant, or
(iii) |_| IAI Global Warrant, or
(b) |_| a Restricted Definitive Warrant.
6. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in the:
(i) |_| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or
(ii) |_| Regulation S Global Warrant, or
(iii) |_| Unrestricted Global Warrant; or
(iv) |_| Regulation S Global Warrant; or
(b) |_| a Restricted Definitive Warrant; or
(c) |_| an Unrestricted Definitive Warrant,
in accordance with the terms of the Warrant Agreement.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Warrants
(CUSIP ____________)
Reference is hereby made to the Warrant Agreement, dated as of December
29, 2005 (the "WARRANT Agreement"), between National Coal Corp., as issuer (the
"COMPANY"), and ▇▇▇▇▇ Fargo Bank, National Association, as warrant agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
__________________________, (the "OWNER") owns and proposes to exchange
________________ Warrant[s] or interest in such Warrant[s] specified herein (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE WARRANTS OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL WARRANT FOR UNRESTRICTED DEFINITIVE WARRANTS OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL WARRANT.
(a) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL WARRANT TO BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL WARRANT. In connection with the Exchange of the Owner's
beneficial interest in a Restricted Global Warrant for a beneficial
interest in an Unrestricted Global Warrant in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Warrants and pursuant to and in accordance
with the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), (iii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Warrant is being acquired
in compliance with any applicable blue sky securities laws of any state
of the United States.
(b) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL WARRANT TO UNRESTRICTED DEFINITIVE
C-1
WARRANT. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Warrant for an Unrestricted Definitive
Warrant, the Owner hereby certifies (i) the Definitive Warrant is being
acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Warrants and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Warrant Agreement and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act
and (iv) the Definitive Warrant is being acquired in compliance with
any applicable blue sky securities laws of any state of the United
States.
(c) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
WARRANT TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL WARRANT. In
connection with the Owner's Exchange of a Restricted Definitive Warrant
for a beneficial interest in an Unrestricted Global Warrant, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
Restricted Definitive Warrants and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(d) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
WARRANT TO UNRESTRICTED DEFINITIVE WARRANT. In connection with the
Owner's Exchange of a Restricted Definitive Warrant for an Unrestricted
Definitive Warrant, the Owner hereby certifies (i) the Unrestricted
Definitive Warrant is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive
Warrants and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Warrant Agreement
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive
Warrant is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE WARRANTS OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL WARRANTS FOR RESTRICTED DEFINITIVE WARRANTS OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL WARRANTS.
(a) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
ARESTRICTED GLOBAL WARRANT TO RESTRICTED DEFINITIVE WARRANT. In
connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Warrant for a Restricted Definitive Warrant in a
number equal to the number of beneficial interests exchanged, the Owner
hereby certifies that the Restricted Definitive Warrant is being
acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of
the Warrant Agreement, the Restricted Definitive Warrant issued will
continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive
Warrant and in the Warrant Agreement and the Securities Act.
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(b) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
WARRANT TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL WARRANT. In
connection with the Exchange of the Owner's Restricted Definitive
Warrant for a beneficial interest in the [CHECK ONE] |_| ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, |_| Regulation S Global Warrant, |_| IAI Global Warrant in a
number equal to the number of beneficial interests exchanged, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Warrants and pursuant to and in accordance with the
Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Warrant
Agreement, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Warrant and in the Warrant
Agreement and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Date: _______________________
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EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
National Coal Corp.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of December
29, 2005 (the "WARRANT Agreement"), between National Coal Corp., as issuer (the
"COMPANY"), and ▇▇▇▇▇ Fargo Bank, National Association, as warrant agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
In connection with our proposed purchase of:
(a) |_| a beneficial interest in a Global Warrant
representing the right to acquire __________ Warrant Shares, or
(b) |_| a Definitive Warrant representing the right to
acquire __________ Warrant Shares,
we confirm that:
3. We understand that any subsequent transfer of the Warrants,
Warrant Shares or any interest therein is subject to certain restrictions and
conditions set forth in the Warrant Agreement and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Warrants, Warrant
Shares or any interest therein except in compliance with, such restrictions and
conditions and the United States Securities Act of 1933, as amended (the
"SECURITIES ACT").
4. We understand that the offer and sale of the Warrants and
Warrant Shares have not been registered under the Securities Act, and that the
Warrants, Warrant Shares and any interest therein may not be offered or sold
except as permitted in the following sentence. We agree, on our own behalf and
on behalf of any accounts for which we are acting as hereinafter stated, that if
we should sell the Warrants, the Warrant Shares or any interest therein, we will
do so only (A) to the Company or any subsidiary thereof, (B) in accordance with
Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished
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on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if requested by the Company, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Warrant
or beneficial interest in a Global Warrant from us in a transaction meeting the
requirements of CLAUSES (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
5. We understand that, on any proposed resale of the Warrants or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Warrants purchased by
us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
7. We are acquiring the Warrants or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
We agree not to engage in any hedging transactions with regard to the
Warrants unless such hedging transactions are in compliance with the Securities
Act.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Transferor]
By:
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Name:
Title:
Dated: _______________________
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