Exhibit 4.6
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of August 22, 2001, by and between
Mikohn Gaming Corporation, a Nevada corporation (the "Company"), and Firstar
Bank, N.A., as warrant agent (the "Warrant Agent").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company proposes to issue warrants (the
"Warrants") initially exercisable to purchase up to four shares of common stock,
par value $.10 per share, of the Company (the "Common Stock" and, the Common
Stock issuable upon exercise of the Warrants being referred to herein as the
"Warrant Shares");
WHEREAS, the Warrants are being issued in connection with the
offering (the "Offering") by the Company of 105,000 Units (the "Units"), each
consisting of $1,000 principal amount at maturity of the Company's 11.875%
Senior Secured Notes due 2008, Series A (the "Notes") and one Warrant initially
exercisable to purchase four Warrant Shares at an exercise price of $7.70 per
Warrant Share; and
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.
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 bearing the
Private Placement Legend.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such 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 specified Person, whether through the ownership
of voting securities, by agreement or otherwise; provided that beneficial
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ownership of 10% or more of the voting securities of a Person shall be deemed to
be control.
"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.
"Business Day" means any day other than a Legal Holiday.
"Change of Control" has the meaning set forth in the
Indenture.
"Clearstream" means Clearstream Banking societe anonyme,
Luxembourg.
"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Definitive Warrants" means, individually and collectively,
each of the warrants issued in definitive form in accordance with Sections
3.1(b) and 3.5 hereof, substantially in the form of Exhibit A hereto (but
without the Global Warrant Legend thereon and without the "Schedule of Exchanges
of Interests in the Global Warrant" attached thereto).
"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 the Indenture.
"Event of Default" has the meaning set forth in the Indenture.
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels office, and all successors thereto, as operator of the Euroclear
system.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Date" means the day immediately following the
Separation Date.
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be $7.70 per share, subject to adjustment
from time to time pursuant to Section 8 hereof.
"Global Warrants" means, individually and collectively, each
of the Warrants issued in global form, in accordance with Sections 3.1(b) and
3.5 hereof, substantially in the form of Exhibit A attached hereto (including
the Global Warrant Legend thereon and the "Schedule of Exchanges of Interests in
the Global Warrant" attached thereto), and registered in the name of, the
Depositary or its nominee.
"Global Warrant Legend" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Global Warrants issued under
this Warrant Agreement.
"Holder" means a Person who is listed as the registered or
record holder of Warrants, Warrant Shares and any other securities issued or
issuable with respect to the Warrants or the Warrant Shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Indenture" means the indenture, dated the date hereof, by and
among the Company, the Guarantors (as set forth in the Indenture) and Firstar
Bank, N.A., as trustee relating to the Notes.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Warrant through a Participant.
"Initial Purchasers" means ▇▇▇▇▇▇▇▇▇ & Company, Inc. and CIBC
World Markets Corp.
"Legal Holiday" means a Saturday, a Sunday or any day which is
in the City of New York a legal holiday or a day upon which banking institutions
in the City of New York are required or authorized by law or other governmental
action to close. If a payment date is a Legal Holiday, payment shall be made on
the next
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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 a Person who is not a U.S. Person.
"Offering" means the offering by the Company of the Units.
"Officer" means, with respect to any Person, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Warrant Agent in form and substance reasonably
acceptable to the Warrant Agent. The counsel may be an employee of or counsel to
the Company, any subsidiary of the Company or the Warrant Agent.
"Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"Person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, limited liability
partnership, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.
"Prospectus" means the prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments and all material incorporated by
reference into such Prospectus.
"Private Placement Legend" means the legend set forth in
Section 3.5(g)(i) to be placed on all Warrants issued under this Warrant
Agreement except where otherwise permitted by the provisions of this Warrant
Agreement.
"Purchase Agreement" means that certain purchase agreement,
dated as of August 15, 2001 by and among the Company, the Guarantors (as set
forth in the Purchase Agreement) and the Initial Purchasers pursuant to which
the Company agreed to issue and sell the units, of which the Warrants form a
part, to the Initial Purchasers.
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"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registrable Securities" shall mean the Warrants, the Warrant
Shares and any other securities issued or issuable with respect to the Warrants
or the Warrant Shares by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization that may not be sold without restriction under federal or state
securities law.
"Registration Statement" means "registration statement," as
such term is defined in Section 2(a)(8) of the Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Warrant" means a Global Warrant bearing
the Private Placement Legend and the Regulation S Legend.
"Regulation S Legend" means the legend set forth in Section
3.5(g)(iv) to be placed on all Registrable Securities 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, including, without limitation, the 144A Global Warrant
and the Regulation S Global Warrant.
"Restricted Period" means the one-year "distribution
compliance period" as defined in Rule 902(f) of Regulation S.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the Commission.
"Rule 903" means Rule 903 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
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"Rule 904" means Rule 904 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest of (i) 180 days after the
closing of the Offering, (ii) the date on which a registration statement with
respect to a registered exchange offer for the Notes is declared effective under
the Securities Act, (iii) the date on which a shelf registration statement with
respect to the Notes or the Warrants and Warrant Shares is declared effective
under the Securities Act, (iv) notification of the occurrence of a Change of
Control (as defined in the Indenture) or an Event of Default (as defined in the
Indenture) with respect to the Notes, and (v) such date as the Initial
Purchasers in their sole discretion shall determine (such date being at least
three Business Days after giving written notice to DTC).
"Shelf Registration" means a shelf Registration Statement
filed pursuant to Rule 415 under the Securities Act relating to the Registrable
Securities.
"Trustee" means the trustee under the Indenture.
"Unrestricted Global Warrant" means a Global Warrant
representing a series of Warrants that do 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.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Warrant Registration Rights Agreement" means the Warrant
Registration Rights Agreement, dated as of the date hereof, by and among the
Company and the Initial Purchasers, setting forth certain registration
obligations of the Company with respect to the Warrants and the Warrant Shares.
All definitions herein (whether set forth herein directly or
by reference to definitions in other documents) shall be equally applicable to
both the singular and the plural forms of the terms defined. The words "hereof,"
"herein" or "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Article and section references are to articles and sections of
this Agreement unless otherwise specified. The term "including" shall mean
"including without limitation."
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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.
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
(the "Warrant Certificates"). The Warrants may have additional notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Warrant shall be dated the date of the 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 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 and Definitive Warrants.
Global Warrants shall be substantially in the form of Exhibit A
attached hereto (including the Global Warrant Legend thereon and the "Schedule
of Exchanges of Interests in the Global Warrant" attached thereto). Definitive
Warrants shall be substantially in the form of Exhibit A attached hereto (but
without the Global Warrant Legend thereon and without the "Schedule of Exchanges
of Interests in the Global Warrant" attached thereto).
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
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accordance with written instructions given by the Holder thereof as required by
Section 3.5 hereof.
(c) Euroclear and Clearstream Procedures Applicable, if Necessary.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests, if any, in any Global Warrant that are held
by Participants through Euroclear or Clearstream.
3.2 Execution.
An Officer shall sign the Warrants for the Company by manual or
facsimile signature.
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 recitals 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.
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
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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 Depository Trust Company
("DTC") to act as Depositary with respect to the Global Warrants.
The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Global Warrants.
3.4 Holder Lists.
The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing, a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.
3.5 Transfer and Exchange.
(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 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, (ii) the Company in
its sole discretion determines that the Global Warrants (in whole but not in
part) should be exchanged for Definitive Warrants which the Company will provide
to the Warrant Agent and delivers a written notice to such effect to the Warrant
Agent or (iii) an Event of Default under the Indenture of which an officer of
the Warrant Agent has actual notice has occurred and is continuing and the
Warrant Registrar has received a request from DTC to issue Definitive Warrants.
Upon the occurrence of any of the events in clauses (i), (ii) or (iii) above of
this Section 3.5(a), Definitive Warrants shall be issued in such names
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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); provided, however, that
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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.
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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 delivered 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
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in Global Warrants. In connection with all transfers and exchanges of
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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 either (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) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance
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with the Applicable Procedures directing the Depositary to cause to be
issued a Definitive Warrant representing the number of Warrants equal
to the number of Warrants represented by the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary
to the Warrant Registrar containing information regarding the Person
in whose name such Definitive Warrant shall be registered. Upon
effectiveness of the Registration Statement by the Company in
accordance with Section 3.5(f) hereof, the requirements of this
Section 3.5(b)(ii) shall be deemed to have been satisfied upon receipt
by the Warrant Registrar of a certification required by the Company in
connection with such Registration Statement delivered by the Holder of
such beneficial interests in the Restricted Global Warrants. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Warrants contained in this Agreement
and the Warrants or otherwise applicable under the Securities Act, the
Warrant Agent shall adjust the principal amount of the relevant Global
Warrant(s) pursuant to Section 3.5(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
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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) hereof
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.
(iv) Transfer and Exchange of Beneficial Interests in a
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Restricted Global Warrant for Beneficial Interests in the Unrestricted
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Global Warrant. A beneficial interest in any Restricted Global Warrant may
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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) hereof and:
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(A) such transfer is effected pursuant to a Registration
Statement in accordance with this Agreement; or
(B) the Warrant Registrar receives the following:
(1) 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
(2) 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;
and, in each such case set forth in this subparagraph (B), 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 or exchange is effected pursuant to subparagraph
(B) above of this Section 3.5(b)(iv) 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
representing the aggregate number of Warrants equal to the aggregate number
Warrants represented by the beneficial interests transferred or exchanged
pursuant to such subparagraph (B) above.
(c) Transfer and Exchange of Beneficial Interests for Definitive
Warrants.
(i) Beneficial Interests in Restricted Global Warrants to
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Restricted Definitive Warrants. If any holder of a beneficial interest in a
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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, following satisfaction of the
conditions set forth in Section 3.5(b)(ii) hereof, and 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, a certificate from the
transferor in the form of 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, a certificate from the transferor in the
form of 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, a certificate from the
transferor in the form of Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate from the
transferor in the form of Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(F) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate from the transferor in the form of
Exhibit B hereto, including the certifications in item (3)(c)
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 Restricted Global Warrant to be
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reduced pursuant to Section 3.5(h) hereof by the number of Warrants to be
represented by the Restricted Definitive Warrant, and the Company shall execute,
and the Warrant Agent pursuant to Section 3.2 hereof shall countersign and
deliver to the Person designated in the instructions, one or more Restricted
Definitive Warrants representing the aggregate number of Warrants exchanged or
transferred. Any Restricted Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c)(i) 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 Restricted Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Restricted 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
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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 exchange or transfer complies with the requirements of
Section 3.5(b)(ii) hereof and:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant Registration Rights
Agreement; or
(B) the Warrant Registrar receives the following:
(1) 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
(2) 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
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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 (B), 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 set forth above in this paragraph
3.5(c)(ii), 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 Restricted Global Warrant to be
reduced pursuant to Section 3.5(h) hereof by the number of Warrants to be
represented by the Unrestricted Definitive Warrant, and the Company shall
execute, and the Warrant Agent pursuant to Section 3.2 hereof shall countersign
and deliver to the Person designated in the instructions, one or more
Unrestricted Definitive Warrants representing the aggregate number of Warrants
exchanged or transferred. Any Unrestricted Definitive Warrant issued in exchange
for a beneficial interest in a Restricted Global Warrant pursuant to this
Section 3.5(c)(ii) 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 Unrestricted Definitive Warrants to the Persons in whose
names such Warrants are so registered. Any Unrestricted Definitive Warrant
issued in exchange for a beneficial interest in a Restricted Global Warrant
pursuant to this Section 3.5(c)(i) shall not bear the Private Placement Legend.
(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 an Unrestricted Definitive Warrant, then, upon
satisfaction of the conditions set forth in Section 3.5(b)(ii) hereof, the
Warrant Agent shall cause the number of Warrants represented by the Unrestricted
Global Warrant to be reduced pursuant to Section 3.5(h) hereof by the number of
Warrants to be represented by the Unrestricted Definitive Warrant, and the
Company shall execute, and the Warrant Agent shall
15
countersign and deliver to the Person designated in the instructions, one
or more Unrestricted Definitive Warrants representing the aggregate number
of Warrants exchanged or transferred. Any Unrestricted Definitive Warrant
issued in exchange for a beneficial interest in an Unrestricted Global
Warrant 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 Unrestricted
Definitive Warrants to the Persons in whose names such Warrants are so
registered. Any Unrestricted Definitive Warrant issued in exchange for a
beneficial interest in an Unrestricted Global Warrant 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 Restricted Definitive Warrant for a
beneficial interest in a Restricted Global Warrant or to transfer such
Restricted Definitive Warrant 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, a certificate
from the transferor in the form of 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, a certificate from the
transferor in the form of Exhibit B hereto, including the
certifications in item (2) thereof;
16
(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, a
certificate from the transferor in the form of Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Warrant is being
transferred to the Company or any of its Subsidiaries, a
certificate from the transferor in the form of Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Warrant is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate from the transferor in the form
of Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Warrant Agent shall cancel the Restricted Definitive Warrant, and shall
cause the number of Warrants represented by the appropriate Restricted
Global Warrant to be increased pursuant to Section 3.5(h) hereof by an
amount equal to the aggregate number of Warrants represented by the
Restricted Definitive Warrant.
(ii) Restricted Definitive Warrants to Beneficial Interests in
---------------------------------------------------------
Unrestricted Global Warrants. A Holder of a Restricted Definitive Warrant
----------------------------
may exchange such Restricted Definitive 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:
(A) such transfer is effected pursuant to a Registration
Statement in accordance with this Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Warrant 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
(2) if the Holder of such Restricted Definitive
Warrant proposes to transfer such Warrants to a
17
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 (B), 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 Restricted
Definitive Warrant, and shall cause the number of Warrants represented by
the appropriate Unrestricted Global Warrant to be increased pursuant to
Section 3.5(h) hereof by an amount equal to the aggregate number of
Warrants represented by the Restricted Definitive Warrant.
(iii) Unrestricted Definitive Warrants to Beneficial Interests
--------------------------------------------------------
in Unrestricted Global Warrants. A Holder of an Unrestricted Definitive
-------------------------------
Warrant may exchange such Unrestricted Definitive Warrant for a beneficial
interest in an Unrestricted Global Warrant or transfer such Unrestricted
Definitive Warrant 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 from the
Holder, the Warrant Agent shall cancel the Unrestricted Definitive Warrant,
and shall cause the number of Warrants represented by the appropriate
Unrestricted Global Warrant to be increased pursuant to Section 3.5(h)
hereof by an amount equal to the aggregate number of Warrants represented
by the Unrestricted Definitive Warrant.
(iv) If any such exchange or transfer from a Definitive
Warrant to a beneficial interest in an Unrestricted Global Warrant is
effected pursuant to subparagraphs (ii)(B) or (iii) above of this Section
3.5(d) 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
representing the aggregate number of Warrants equal to the aggregate number
of Warrants represented by the Definitive Warrants so exchanged or
transferred.
18
(e) Transfer and Exchange of Definitive Warrants for
Definitive Warrants.
(i) 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).
(ii) Restricted Definitive Warrants to Restricted
--------------------------------------------
Definitive Warrants. Any Restricted Definitive Warrant may be
-------------------
transferred to and registered in the name of a Person who takes
delivery thereof in the form of a Restricted Definitive Warrant if the
transfer complies with the requirements of Section 3.5(b)(ii) hereof
and the Warrant Registrar receives the following:
(A) if the transfer will be made pursuant to
Rule 144A, a certificate from the transferor 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, a certificate from the transferor 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, a certificate from the transferor in the form
of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(iii) 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 who takes delivery thereof in the form of an
Unrestricted Definitive Warrant if the transfer complies with the
requirements of Section 3.5(b)(ii) hereof and:
19
(A) any such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant Registration
Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Warrants proposes to exchange such Restricted Definitive Warrant
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
(2) if the Holder of such Restricted Definitive
Warrants proposes to transfer such Restricted Definitive Warrant
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 (B), if the
Warrant Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company 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.
(iv) Unrestricted Definitive Warrants to Unrestricted
------------------------------------------------
Definitive Warrants. A Holder of an Unrestricted Definitive Warrant may
-------------------
transfer such Unrestricted Definitive Warrant 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 Warrant pursuant to
the instructions from the Holder thereof.
(f) Registration Statement.
Upon the effectiveness of a Registration Statement and sales of
Warrants in connection therewith, the Company shall issue and, upon receipt of a
Warrant Countersignature Order in accordance with Section 3.2, the Warrant Agent
shall countersign (i) one or more Unrestricted Global Warrants representing the
number of Warrants equal to the number of Warrants represented by the beneficial
interests in the Restricted Global Warrants sold under such Registration
Statement and (ii) the number of Unrestricted Definitive Warrants equal to the
number of
20
Restricted Definitive Warrants sold under such Registration Statement.
Concurrently with the issuance of such Warrants, the Warrant Agent shall cause
the number of Warrants represented by the applicable Restricted Global Warrants
to be reduced accordingly pursuant to Section 3.5(h) hereof, and the Company
shall execute and the Warrant Agent shall countersign and deliver to the Persons
designated by the Holders of Definitive Warrants so accepted Definitive Warrants
in the appropriate amount.
(g) Legends.
The following legends shall appear on the reverse of all
Global Warrants and all 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)
of this Section 3.5(g), each Global Warrant and each
Definitive Warrant (and all Warrants issued in exchange
therefor or substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY 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 BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR
TO THE DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY
HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE SECURITIES
ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF 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) (THE "RESALE
RESTRICTION TERMINATION DATE") EXCEPT (A) TO THE COMPANY, (B)
21
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 UNDER
THE SECURITIES ACT, 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 FOREIGN PERSONS THAT OCCUR IN OFFSHORE
TRANSACTIONS AND WITHOUT DIRECTED SELLING EFFORTS WITHIN THE
MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT THAT IS PURCHASING THE SECURITY 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 OF 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, SUBJECT TO THE COMPANY'S
AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS 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 THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE WARRANT AGENT AND IN
EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY
U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER OF
THIS SECURITY AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
(B) Notwithstanding the foregoing, any
Global Warrant or Definitive Warrant issued pursuant to
subparagraphs
22
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) of 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:
"THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY
ISSUED AS PART OF AN ISSUANCE OF 105,000 UNITS (THE "UNITS"), EACH OF
WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 11.875%
SENIOR SECURED NOTES DUE 2008, SERIES A, OF THE COMPANY (THE "NOTES") AND
ONE WARRANT INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE FOUR
SHARES OF COMMON STOCK, PAR VALUE $.10 PER SHARE, OF THE COMPANY.
PRIOR TO THE EARLIEST OF (I) 180 DAYS AFTER THE CLOSING OF THE
OFFERING OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT
WITH RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED
EFFECTIVE UNDER THE ACT, (III) THE DATE ON WHICH A SHELF REGISTRATION
STATEMENT WITH RESPECT TO THE NOTES OR THE WARRANTS AND WARRANT SHARES IS
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) NOTIFICATION OF
23
THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF DEFAULT (AS DEFINED
IN THE INDENTURE GOVERNING THE NOTES (THE "INDENTURE")), WITH RESPECT TO
THE NOTES, AND (V) SUCH DATE AS THE INITIAL PURCHASERS (AS DEFINED IN THE
INDENTURE) (OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS) IN THEIR SOLE
DISCRETION SHALL DETERMINE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES."
(iv) Regulation S Legend. Each Warrant that is a Registrable
Security and issued pursuant to Regulation S shall bear the following
legend on the reverse thereof:
"THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") AND THE SECURITIES EVIDENCED BY THIS
CERTIFICATE MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON
UNLESS REGISTERED UNDER THE SECURITIES ACT, OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. IN ORDER TO EXERCISE THE SECURITIES EVIDENCED
BY THIS CERTIFICATE, 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 THIS SECURITY 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."
(h) 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 one or more 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 exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial
24
interest in another Global Warrant or a Definitive Warrant, the number 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 written direction of the Depositary 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 or a Definitive Warrant is being exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
a Global Warrant, the number of Warrants represented by the Global Warrant in
which such beneficial interest is received shall be increased accordingly and an
endorsement shall be made on such Global Warrant by the Warrant Agent or by the
Depositary at the written direction of the Depositary to reflect such increase.
(i) 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
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.
(iii) All Global Warrants and Definitive Warrants
issued upon any registration of transfer or exchange of beneficial
interests in Global Warrants or of 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 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.
25
(j) 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
with the original to follow immediately thereafter.
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 of their
respective agents 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
to the same extent as the Warrant surrendered to the Warrant Agent for such
replacement Warrant.
3.7 Temporary Warrants.
Until certificates representing Warrants are ready for
delivery, the Company may prepare and the Warrant Agent, upon receipt of a
Warrant Countersignature Order, shall issue 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 as 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 equally and proportionately with all other
Warrants duly issued hereunder.
26
3.8 Cancellation.
Subject to Section 3.5(h) 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 requirement 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; TERMS OF WARRANTS; EXERCISE OF WARRANTS.
(a) The Notes and Warrants will not be separately transferable
until the Separation Date. Subject to the terms of this Agreement, each Holder
shall have the right, which may be exercised during the period commencing at the
opening of business on the Exercise Date and until 5:00 p.m., New York City
time, on the Expiration Date (as defined below) (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 and payment of the Exercise Price (i) through a "cashless"
exercise in accordance with Section 4(g) hereof; (ii) in cash, by wire transfer
or by certified or official bank check payable to the order of the Company; or
(iii) by a combination thereof, in each case, equal to the Exercise Price then
in effect for such Warrant Shares; provided that Holders shall be able to
--------
exercise their Warrants only if a Registration Statement relating to the Warrant
Shares is then in effect, or the exercise of such Warrants is exempt from the
registration requirements of the Securities Act, and such securities are
qualified for sale or exempt from qualification under the applicable securities
laws of the states in which the various Holders of the Warrants or other Persons
to whom it is proposed that the Warrant Shares be issued on exercise of the
Warrants reside. Each Warrant not exercised prior to 5:00 p.m., New York City
time, on August 15, 2008 (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. No adjustments as to dividends will be made upon exercise
of the Warrants.
(b) In order to exercise all or any of the Warrants
represented by a Warrant Certificate, the holder thereof must deliver to the
Warrant Agent at its corporate trust office set forth in Section 15 hereof the
Warrant Certificate and the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a
27
Securities Transfer Association recognized signature guarantee program, and upon
payment to the Warrant Agent for the account of the Company of the Exercise
Price, which is set forth in the form of Warrant Certificate attached hereto as
Exhibit A, as adjusted as herein provided, for the number of Warrant Shares in
respect of which such Warrants are then exercised. Payment of the aggregate
Exercise Price shall be made (i) in cash, by wire transfer or by certified or
official bank check payable to the order of the Company, (ii) through a
"cashless" exercise in accordance with Section 4(g) hereof, or (iii) by a
combination thereof.
(c) Subject to the provisions of Section 5 hereof, upon
compliance with Sections 4(a) and (b) above, the Warrant Agent shall deliver or
cause to be delivered with all reasonable dispatch, to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of whole Warrant Shares issuable upon
the exercise of such Warrants, together with cash delivered by the Company in
lieu of fractional shares 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 as described in Section 8(m) 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 Exercise Price as aforesaid, the Warrant Agent
shall, as soon as possible, but in any event not later than three 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. Such certificate
or certificates shall be deemed to have been issued, and any Person so
designated to be named therein shall be deemed to have become a Holder of record
of such Warrant Shares, as of the date of the surrender of such Warrants and
payment of the Exercise Price.
(d) The Warrants shall be exercisable, at the election of the
Holders thereof, either in full or from time to time in part, at any time during
the Exercise Period. If less than all the Warrants represented by a Definitive
Warrant are exercised, such Definitive Warrant shall be surrendered and a new
Definitive Warrant of the same tenor and for the number of Warrants which were
not exercised shall be executed by the Company and delivered to the Warrant
Agent and the Warrant Agent shall countersign the new Definitive Warrant,
registered in such name or names as may be directed in writing by the Holder,
and shall deliver the new Definitive Warrant to the Person or Persons entitled
to receive the same. The Warrant Agent shall make such notations on the Schedule
of Exchange of Interests of Global Warrants to each Global Warrant as are
required to reflect any change in the number of Warrants represented by such
Global Warrant resulting from any exercise in accordance with the terms hereof.
28
(e) All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled by the Warrant Agent in accordance with Section 3.8
hereof. Such cancelled Warrant Certificates shall then be disposed of by the
Warrant Agent in a manner satisfactory to the Company in accordance with
Section 3.8 hereof. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and
any notices given or received hereunder available for inspection by the Holders
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.
(g) A Holder shall have the right to exercise the Warrants
through a "cashless" exercise, subject to compliance with this Section 4,
without any payment in cash or by certified or official bank check, in which
event the Company shall issue to such Holder a number of Warrant Shares
computed using the formula:
N x (M - E)
X = --------------
M
where:
X = the number of Warrant Shares to be issued to such
Holder.
N = the number of Warrant Shares issuable upon exercise of
the Warrants being exercised by such Holder.
M = the Current Market Price (as defined herein) per share
of Common Stock on the exercise date.
E = the Exercise Price.
SECTION 5. PAYMENT OF TAXES.
The Company will 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 Holder of a Warrant
29
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.
(a) The Company will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued Common Stock or its authorized and issued Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise of all outstanding
Warrants.
(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 represented by the Warrants 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 will 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 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
will supply such Transfer Agent with duly executed certificates for such
purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 9 hereof. The Company will furnish such Transfer
Agent a copy of all notices of adjustments, and certificates related thereto,
transmitted to each Holder pursuant to Section 10 hereof.
(c) Before 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 Warrant Shares, the Company will take any and all
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 will, 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, and issued
in compliance with all applicable federal and state securities laws and all
applicable gaming laws.
30
SECTION 7. OBTAINING STOCK EXCHANGE LISTINGS.
The Company will from time to time take all action which may
be necessary so that the Warrant Shares, immediately upon their issuance upon
the exercise of Warrants, will be listed on the principal securities exchanges,
automated quotation systems or other markets 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 are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 8. For purposes of
Section 8 and Section 10, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any other stock 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.
(a) Adjustment for Change in Capital Stock.
If the Company (i) pays a dividend or makes a distribution on
its Common Stock 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 be proportionately adjusted so that the Holder of any Warrant
thereafter exercised 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 if such Warrant had been exercised immediately prior to
such action.
The adjustment pursuant to this Section 8(a) 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, 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 such classes of capital stock
and shall notify the Warrant Agent of such determination. After such
allocation, the Exercise Price with respect to, and the number of underlying
shares of, each class of capital stock shall thereafter be subject
31
to adjustment on terms comparable to those applicable to Common Stock in this
Section 8. The adjustment pursuant to this Section 8(a) 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 mentioned below to purchase shares of Common Stock
at a price per share less than the Current Market Price per share on that
record date, the Exercise Price shall be adjusted in accordance with the
formula:
N x P
O+ -------
M
E' = E x -------
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
issuable pursuant to such rights, options or warrants.
P = the price per share of the additional shares.
M = the Current Market Price per share of Common Stock on
the record date.
The adjustment pursuant to this Section 8(b) 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.
32
If the Company distributes to all holders of its Common Stock
any of its assets or debt securities or any rights or warrants to purchase debt
securities of the Company, the Exercise Price shall be adjusted in accordance
with the formula:
M - F
E'= E x -------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Current Market Price per share of Common Stock on
the record date mentioned below.
F = the fair market value on the record date of the
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 "Board of Directors").
The adjustment pursuant to this Section 8(c) 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) does not apply to cash 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. Also, this Section 8(c) does not apply to rights,
options or warrants referred to in Section 8(b) hereof.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a
consideration per share less than the Current Market Price 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
O+ ---
M
E'= E x --------
A
33
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.
M = the Current Market Price per share of Common Stock 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 pursuant to this Section 8(d) shall be made
successively whenever any such issuance is made, and shall become effective
immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in
subsections (a), (b) and (c) of this Section 8,
(2) the exercise of Warrants, or the
conversion or exchange of other securities convertible or
exchangeable for Common Stock, the issuance of which
caused an adjustment to be made under Section 8(e),
(3) Common Stock issued to the Company's
employees, directors or consultants (or employees,
directors or consultants of its Affiliates) under bona
fide employee benefit plans adopted by the Board of
Directors and approved by the holders of Common Stock when
required by law, if such Common Stock would otherwise be
covered by this subsection (d) (but only to the extent
that the aggregate number of shares excluded hereby and
issued after the date of this Warrant Agreement, together
with the number of shares issuable upon conversion of the
securities described in clause (e)(2) below, shall not
exceed 10% of the Common Stock
34
outstanding at the time of the adoption of each such plan,
exclusive of anti-dilution adjustments thereunder),
(4) Common Stock issued to stockholders of
any Person which merges with the Company, or with a
subsidiary of the Company (in proportion to such
stockholders' stock holdings of such Person immediately
prior to such merger, upon such merger), provided that if
such Person is an Affiliate of the Company, the Board of
Directors shall have obtained a fairness opinion from a
nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company,
stating that the consideration received in such merger is
fair to the Company from a financial point of view,
(5) 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,
(6) shares of Common Stock issued upon
exercise of any option granted or warrant issued prior to
the date of this Warrant Agreement and, with respect to
any option granted or warrant issued after the date of
this Warrant Agreement at an exercise price not less than
Current Market Price per share on the date of such grant
or issuance, shares of Common Stock issued upon exercise
thereof, or
(7) shares of Common Stock issued in a bona
fide public offering pursuant to a firm commitment
underwriting; provided that the issue price of such shares
--------
is at least equal to 80% of the then Current Market Price
per share of Common Stock.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities (i) convertible into
Common Stock or (ii) exercisable or exchangeable for Common Stock (other than
securities issued in transactions described in subsections (b) and (c) of this
Section 8) for a consideration per share of Common Stock initially deliverable
upon conversion, exercise or exchange of such securities less than the Current
Market Price per share of such Common Stock on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
35
P
O+ ---
M
E'= E x -------
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 Current Market Price per share of Common Stock 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 or exchange rate.
The adjustment pursuant to this Section 8(e) 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,
exercise or exchange of such securities has 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 or exchange of
such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to
stockholders of any Person which merges with the Company,
or with a subsidiary of the Company (in proportion to such
stockholders' stock holdings of such Person immediately
prior to such merger), upon such merger, provided that if
such Person is an Affiliate of the Company, the Board of
Directors shall have obtained a fairness opinion from a
nationally
36
recognized investment banking, appraisal or valuation
firm, which is not an Affiliate of the Company, stating
that the consideration received in such merger is fair to
the Company from a financial point of view,
(2) securities convertible into, exercisable
or exchangeable for shares of Common Stock issued to
employees, directors or consultants of the Company or its
Affiliates under bona fide employee benefit plans adopted
by the Board of Directors and approved by the holders of
Common Stock, when required by law (but only to the extent
the aggregate number of shares of Common Stock to be
issued upon the conversion, exercise or exchange of such
securities, together with the number of shares issued as
described in clause (d)(3) above, shall not exceed 10% of
the Common Stock outstanding at the time of adoption of
each such plan, exclusive of anti-dilution adjustments
thereunder),
(3) any of the transactions described in
subsections (a), (b) and (c) of this Section 8, or
(4) shares of Common Stock issued in a bona
fide public offering pursuant to a firm commitment
underwriting; provided that the issue price of such shares
--------
is at least equal to 80% of the then Current Market Price
per share of Common Stock.
(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:
(i) 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;
(ii) 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 for all purposes, and described in a Board
resolution which shall be filed with the Warrant Agent;
37
(iii) in the case of the issuance of securities
convertible into or exercisable or exchangeable 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, exercise or exchange
thereof (the consideration in each case to be determined in the same
manner as provided in clauses (i) and (ii) of this subsection (f)); and
(iv) 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
described in a Board resolution which shall be filed with the Warrant
Agent plus the additional minimum 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 (i) and (ii) of
this subsection (f)).
(g) Current Market Price.
The "Current Market Price" per security at any date of
determination shall be the average daily Market Price during the period of the
most recent 20 days, ending on such date, on which the national securities
exchanges were open for trading, except that if such security is not then
listed or admitted to trading on any national securities exchange or quoted on
a national quotation system or in the over-the-counter market, the Current
Market Price shall be the Market Price on such date as set forth in paragraph
(iii) of the definition thereof below.
"Market Price" per security at any date of determination shall
be the amount per security, equal to:
(i) the last sale price of such security on such date
or, if no such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each case as
officially reported on the principal national securities exchange on
which such security is then listed or admitted to trading, or
(ii) if such security is not then listed or admitted
to trading on any national securities exchange but is quoted on a
national quotation system or in the over-the-counter market, the
average of the closing bid and
38
asked prices of such security on such date as shown by such quotation
system, or
(iii) if such security is not then listed or admitted
to trading on any national securities exchange or quoted on a national
quotation system or in the over-the-counter market, the Fair Value (as
defined below) per security at such date of determination.
In Sections 8(d) and (e) hereof, "Fair Value" per security at
any date of determination shall be (i) in connection with an issuance and sale
by the Company to a party that is not an Affiliate of the Company in an arm's-
length transaction (a "Non-Affiliate Sale"), the price per security at which
such security is sold and (ii) in connection with any issuance and sale by the
Company to an Affiliate of the Company, (A) the last price per security at
which such security was issued or sold in a Non-Affiliate Sale within the
three-month period preceding such date of determination or (B) if clause (A) is
not applicable, the fair market value of such security determined in good faith
by (1) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent, or (2) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account all factors deemed relevant by the Board of Directors or such
investment banking, appraisal or valuation firm. Notwithstanding the foregoing,
any sale to the Initial Purchasers (or any successors thereto) pursuant to an
underwritten public offering registered under the Securities Act shall be
deemed to be and treated as a Non-Affiliate Sale.
In Sections 8(b) and (c) hereof, the "Fair Value" per security
at any date of determination shall be (A) the last price per security at which
such security was issued and sold by the Company in a Non-Affiliate Sale within
the three-month period preceding such date of determination or (B) if clause
(A) is not applicable, the fair market value of such security determined in
good faith by (1) a majority of the Board of Directors, including a majority of
the Disinterested Directors, and approved in a Board resolution delivered to
the Warrant Agent, or (2) a nationally recognized investment banking, appraisal
or valuation firm, which is not an Affiliate of the Company, in each case,
taking into account all factors deemed relevant by the Board of Directors or
such investment banking, appraisal or valuation firm.
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 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.
39
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, officer or employee 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.
No adjustment need be made for a transaction referred to in
Section 8(a), (b), (c), (d) or (e) hereof, if Warrant Holders are to
participate (without being required to exercise their Warrants) in the
transaction on a basis and with written 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) the adoption of a plan commonly referred to
as a "Stockholders' Rights Plan" which provides for the issuance of rights to
acquire shares of capital stock upon the occurrence of some event that is not
within the control of the rights holders, or the issuance of rights under such
plan; provided that the issuance of capital stock pursuant to such rights shall
require adjustment to the Exercise Price and number of shares of Common Stock
purchasable upon the exercise of each Warrant as set forth in this Agreement.
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 10 hereof.
(k) Voluntary Reduction.
40
The Company from time to time may reduce the Exercise Price by
any amount for any period of time, if the period is at least 20 days and if the
reduction is irrevocable during the period; provided that in no event may the
Exercise Price be less than the par value of a share of Common Stock. Whenever
the Exercise Price is reduced, the Company shall mail to Warrant Holders and the
Warrant Agent a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period in which it will be
in effect. A reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of Sections 8(a), (b), (c), (d)
and (e) hereof.
(l) Notice of Certain Transactions.
If (i) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to Section 8(a), (b), (c), (d) or (e)
hereof and if the Company does not arrange for Warrant Holders to participate
pursuant to Section 8(i) hereof, (ii) the Company takes any action that would
require a supplemental Warrant Agreement pursuant to Section 8(m) hereof or
(iii) there is a liquidation or dissolution of the Company, then the Company
shall mail to Warrant Holders a notice stating the proposed record date for a
dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 15 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
(m) Reorganization of Company.
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
before the effective date of the transaction with notice thereof to the Warrant
Agent. 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 transfer or lease shall have been made,
shall enter into 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(m). The successor
Company shall mail to Warrant Holders and the Warrant Agent a written notice
describing the supplemental Warrant 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,
that issuer shall
41
join in the supplemental Warrant Agreement. If this Section 8(m) applies,
Sections 8(a), (b), (c), (d) and (e) hereof do not apply.
(n) Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to Section 8(a), (b), (c), (d), (e), (f), (g), (h) or (i)
hereof is conclusive.
(o) Warrant Agent's Disclaimer.
The Warrant Agent has 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 has no duty to determine whether any provisions of a
supplemental Warrant Agreement under Section 8(m) hereof are correct. The
Warrant Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for the Company's failure to comply with this Section 8.
(p) 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, with notice thereof to the Warrant Agent,
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 based on the
Exercise Price prior to such adjustment over and above the Warrant Shares and
other capital stock of the Company, if any, issuable upon such exercise on the
basis of the adjusted Exercise Price and (ii) paying to such Holder any amount
in cash in lieu of a fractional share pursuant to Section 9 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.
(q) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 8 (other than pursuant to Sections 8(a)(iv) and (v) and Section 8(c)),
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:
42
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 of 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.
Upon each adjustment of the Exercise Price pursuant to Sections
8(a)(iv) and (v) and Section 8(c), 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, the amount and kind of
securities which such Holder would have owned immediately following such
dividend, distribution or issuance if such Warrant had been exercised
immediately prior to such action.
(r) 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 issued prior to or after such adjustment 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 pay an amount in cash
equal to (i) the Market Price per Warrant Share, as determined on the day
immediately preceding the date the Warrant is
43
presented for exercise, multiplied by (ii) such fraction of a Warrant Share,
computed to the nearest whole U.S. cent.
SECTION 10. 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 of
recognized standing selected by the Board of Directors of the Company (who may
be the regular auditors of the Company) setting forth the Exercise Price 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 to be given to each
of the Holders of Warrants at the address appearing on the Warrant register for
each such Holder written notice of such adjustment by first-class mail, postage
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 10.
(b) In case:
(i) 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) 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 referred to in Section 8(a) hereof);
(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, lease or other 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 for shares of Common Stock;
44
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(v) 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 cause
to be given to each of the Holders of Warrants at such Holder's address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) 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, lease, 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,
lease, transfer, dissolution, liquidation or winding up. The failure to give the
notice required by this Section 10 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant, consolidation,
merger, conveyance, lease, transfer, dissolution, liquidation or winding up, or
the vote upon any action.
(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 11. MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
(a) Any Person into which the Warrant Agent may be merged or
with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any Person
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, provided that such Person
would be eligible for appointment as a successor warrant agent under the
provisions of Section 13 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency
45
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 12. 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 otherwise provided herein.
(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.
(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.
(d) The Warrant Agent shall incur no responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, adjustments,
determination, notice,
46
resolution, waiver, 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.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation (which shall include the reasonable fees and expenses of its
counsel) for all services rendered by the Warrant Agent in the execution,
administration, preparation, delivery and amendment of this Agreement, and 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, administration, preparation, delivery and amendment of this
Agreement. 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 Warrant 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 wilful misconduct. The indemnity provided in this Agreement shall
survive the termination of this Agreement and the resignation or removal of the
Warrant Agent. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. 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. 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.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more Holders of Warrants
shall furnish the Warrant Agent with 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 Holders of the Warrants, as their respective rights
or interests may appear.
47
(g) Except as otherwise prohibited by law, 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 Person.
(h) The Warrant Agent shall act under this Agreement solely as
agent for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence 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 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 will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
(j) The Warrant Agent, in its capacity as Warrant Registrar,
shall have all the rights, powers, privileges, exculpation, protections, and
indemnities as are provided to the Warrant Agent under this Agreement.
SECTION 13. CHANGE OF WARRANT AGENT.
The Warrant Agent may resign as Warrant Agent at any time
following 30 days written notice thereof to the Company. If the Warrant Agent
shall 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 incapacity by the Warrant Agent or by any Holder of a Warrant, then the
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 Company. The Holders of
a majority of the unexercised Warrants shall be entitled at any time to remove
the Warrant Agent and
48
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. Failure to give
any notice provided for in this Section 13, however, or any defect therein,
shall not affect the legality or validity of the appointment of a successor to
the Warrant Agent.
SECTION 14. REPORTS.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Warrants are outstanding, the Company shall
furnish to the Warrant Agent and the Holders of Warrants (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company were required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual information
only, a report thereon by the Company's certified independent and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the Commission, the Company shall
file a copy of all such information and reports with the Commission for public
availability (unless the Commission shall not accept such a filing) and make
such information available to securities analysts and prospective investors upon
request.
(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 14.
SECTION 15. NOTICES TO COMPANY AND WARRANT AGENT.
All notices, demands and other communications provided for or
permitted under this Agreement to be given or made by the Warrant Agent or by
the Holder of any Warrant to or on the Company shall be made in writing by hand-
delivery, certified first-class mail, return receipt requested, next-day air
courier or facsimile as follows (until another address is filed in writing by
the Company with the Warrant Agent):
Mikohn Gaming Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
49
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
All notices, demands and other communications provided for or
permitted under this Agreement to be given or made by the Company or by the
Holder(s) of any Warrant to the Warrant Agent shall be made in writing by
hand-delivery, certified first-class mail, return receipt requested, next-day
air courier or facsimile as follows (until another address is filed in writing
by the Warrant Agent with the Company):
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; one Business Day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
SECTION 16. 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 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 adversely affect the interests of the Holders
50
of Warrants. Any amendment or supplement to this Agreement that has an 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 (as such term is defined
in Rule 405 under the Securities Act). 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). Upon receipt of a certificate from the appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 16, and such supplement or
amendment does not change the Warrant Agent's duties, liabilities or
obligations, the Warrant Agent shall execute such supplement or amendment.
SECTION 17. 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 including, without
limitation and without the need for an express assignment, subsequent Holders.
SECTION 18. TERMINATION.
This Agreement shall terminate at 5:00 p.m., New York City time on
the Expiration Date. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 12 shall survive such termination.
SECTION 19. GOVERNING LAW.
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 GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN NEW YORK.
SECTION 20. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Warrant Agent and the Holders of Warrants any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the
51
Holders of Warrants. The Company agrees that the Holders of the Warrants shall
be third-party beneficiaries to the agreements made hereunder by the Company and
each Holder shall have the right to enforce such agreements directly to the
extent it deems enforcement necessary or advisable to protect its rights
hereunder.
SECTION 21. 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 this page]
52
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
MIKOHN GAMING CORPORATION
By:_________________________________
Name:
Title:
FIRSTAR BANK, N.A., as Warrant Agent
By:_________________________________
Name:
Title:
Warrant Agreement
EXHIBIT A
[Form of Warrant Certificate]
105,000 Warrants
▇▇. ▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇
Warrant Certificate
MIKOHN GAMING CORPORATION
This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of Warrants, expiring August 15,
2008 (the "Warrants"), to purchase common stock, par value $.10 per share (the
"Common Stock"), of Mikohn Gaming Corporation, a Nevada corporation (the
"Company"). Each Warrant initially entitles the registered holder upon exercise
at any time from 9:00 a.m., New York City time, on the date immediately
following the Separation Date (as defined in the Warrant Agreement) (the
"Exercise Date") until 5:00 p.m., New York City time, on August 15, 2008, the
Expiration Date, to receive from the Company four fully paid and nonassessable
shares of Common Stock (the "Warrant Shares") at the initial exercise price (the
"Exercise Price") of $7.70 per share payable upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, subject to the conditions set forth herein and in the Warrant
Agreement 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 the Expiration Date, and to the extent not exercised by such time
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed by and construed in
with the laws of the State of New York applicable to contracts made
and to be performed in New York.
A-1
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed below.
Dated: August 22, 2001
MIKOHN GAMING CORPORATION
By:________________________________
Name:
Title:
Countersigned:
FIRSTAR BANK, N.A.
as Warrant Agent
By:______________________________
Authorized Signature
A-2
[Reverse of Warrant Certificate]
[Unit Legend. Each Warrant issued prior to the Separation Date
shall bear the following legend on the reverse thereof:]
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART
OF AN ISSUANCE OF 105,000 UNITS (THE "UNITS"), EACH OF WHICH CONSISTS
-----
OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 11.875% SENIOR SECURED
NOTES DUE 2008, SERIES A, OF THE COMPANY (THE "NOTES") AND ONE WARRANT
-----
INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE FOUR SHARES OF
COMMON STOCK, PAR VALUE $.10 PER SHARE, OF THE COMPANY.
PRIOR TO THE EARLIEST OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING
OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH
RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED
EFFECTIVE UNDER THE ACT, (III) THE DATE ON WHICH A SHELF REGISTRATION
STATEMENT WITH RESPECT TO THE NOTES OR THE WARRANTS AND WARRANT SHARES
IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) NOTIFICATION OF
THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF DEFAULT (AS
DEFINED IN THE INDENTURE GOVERNING THE NOTES (THE "INDENTURE")), WITH
---------
RESPECT TO THE NOTES, AND (V) SUCH DATE AS THE INITIAL PURCHASERS (AS
DEFINED IN THE INDENTURE) (OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS)
IN THEIR SOLE DISCRETION SHALL DETERMINE, THE WARRANTS EVIDENCED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM,
BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.
[Global Warrant Legend. Each Global Warrant shall bear the
following legend on the reverse thereof.]
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
A-3
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.
[Private Placement Legend: Each Warrant issued pursuant to an
exemption from the registration requirements of the Securities Act shall bear
the following legend on the reverse thereof:]
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY 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 BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE THAT IS TWO
YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE
144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES
OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF 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) (THE "RESALE RESTRICTION TERMINATION
DATE") EXCEPT (A) TO THE COMPANY, (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 UNDER THE SECURITIES ACT, 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
FOREIGN PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND WITHOUT
DIRECTED SELLING EFFORTS
A-4
WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS PURCHASING THE SECURITY 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 OF 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, SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS 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 THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE WARRANT AGENT AND IN
EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S.
STATE OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
[Regulation S Legend. Each Warrant that is a Registrable
Security and issued pursuant to Regulation S shall bear the following legend on
the reverse thereof:]
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SECURITIES EVIDENCED BY THIS
CERTIFICATE MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON
UNLESS REGISTERED UNDER THE SECURITIES ACT, OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. IN ORDER TO EXERCISE THE SECURITIES
EVIDENCED BY THIS CERTIFICATE, 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
A-5
THAT THE SECURITIES DELIVERED UPON EXERCISE OF THIS SECURITY 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.
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 the Expiration Date, 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 August 22, 2001 (the "Warrant Agreement"), duly executed and
delivered by the Company to Firstar Bank, N.A., as 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. 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 after 9:00 a.m.,
New York City time, on the Exercise Date and on or before 5:00 p.m., New York
City time, on the Expiration Date, provided that holders shall be able to
exercise their Warrants only if a Registration Statement relating to the
exercise of the Warrants is then in effect, or the exercise of such Warrants is
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and such securities are qualified for sale or
exempt from qualification under the applicable securities laws of the states in
which the various holders of the Warrants or other Persons to whom it is
proposed that the Warrant Shares be issued on exercise of the Warrants reside.
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 New York
corporate trust office set forth in Section 15 of the Warrant Agreement this
Warrant Certificate and the form of election to purchase included in this
Warrant Certificate duly filled in and signed, which signature shall be
medallion guaranteed by an institution which is a member of one of the
following recognized signature guarantee programs: (i) The Securities Transfer
Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion
Program (MNSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such
other guarantee program acceptable to the Warrant Agent, and payment to the
Warrant Agent for the account of the Company of the Exercise Price, as adjusted
as provided in the Warrant Agreement, for the number of Warrant Shares in
respect of which such Warrant is then exercised.
A-6
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. 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. No
adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized 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 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.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof 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, or 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 Mikohn
Gaming Corporation, in the amount of $__________ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _______________, whose address is __________________
and that such shares be delivered to ___________, whose address is
____________________________. If said number of shares is less than all of the
shares of Common Stock purchasable upon exercise of the Warrant(s) represented
by this Warrant Certificate, the undersigned requests that a new Warrant
Certificate representing the number of Warrants exercisable for 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*
*NOTICE: The Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) such other guarantee program acceptable to the Trustee.
A-8
[To Be Included Only On Global Warrants]
SCHEDULE OF EXCHANGES OF INTERESTS
OF GLOBAL WARRANTS
The following exchanges of a part of this Global Warrant have been made:
Amount of Number of
Decrease in Warrants in this
Number of Amount of Global Warrant Signature of
Warrants in Increase in Number Following Such Authorized
Date of this Global of Warrants in this Decrease or Officer of
Exchange Warrant Global Warrant Increase Warrant Agent
---------------------------------------------------------------------------------------
A-9
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Mikohn Gaming Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
August 22, 2001 (the "Warrant Agreement"), between Mikohn Gaming Corporation, as
issuer (the "Company"), and Firstar Bank N.A., 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, in the amount of $__________ in such Warrant[s] or interests (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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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
B-1
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. 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 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-2
(b) [_] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of 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
B-3
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.
[Signature page follows this page]
B-4
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-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a)OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Warrant, or
(ii) [_] Regulation S Global Warrant; or
(b) [_] a Restricted Definitive Warrant.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Warrant, or
(ii) [_] Regulation S Global Warrant, or
(ii) [_] Unrestricted Global Warrant; or
(b) [_] a Restricted Definitive Warrant; or
(c) [_] an Unrestricted Definitive Warrant,
in accordance with the terms of the Warrant Agreement.
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Gaming Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Re: Warrants
(CUSIP ____________)
Reference is hereby made to the Warrant Agreement, dated as of
August 22, 2001 (the "Warrant Agreement"), between Mikohn Gaming Corporation, as
issuer (the "Company"), and Firstar Bank, N.A., 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 the Warrant[s] or interest in such Warrant[s] specified herein, in the
amount of $____________ in such Warrant[s] or interests (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
C-1
"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 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
C-2
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 a
Restricted 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.
(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] [_] 144A Global Warrant, [_]
Regulation S 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.
[Signature page follows this page]
C-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: _________________
C-4