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EXHIBIT 10(I)
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STOCK DISPOSITION AGREEMENT
among
American Standard Companies Inc.,
▇▇▇▇▇ & Company, L.P.
and
▇▇▇▇▇ ASI Partners, L.P.
Dated as of December 16, 1996
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Specific Definitions................................................................ 2
Section 1.2 Other Terms......................................................................... 3
ARTICLE II
PURCHASE SHARES
Section 2.1 Purchase and Sale of Purchase Shares................................................ 4
Section 2.2 Closing; Delivery and Payment....................................................... 4
ARTICLE III
OTHER AGREEMENTS
Section 3.1 Registered Underwritten Secondary Sale.............................................. 5
Section 3.2 Transaction Payment................................................................. 7
Section 3.3 Warrants............................................................................ 9
Section 3.4 Modification of Agreements.......................................................... 12
Section 3.5 Confidentiality..................................................................... 12
Section 3.6 Indemnity........................................................................... 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES............................................... 17
ARTICLE V
CONDITIONS TO CLOSING.................................................... 18
ARTICLE VI
TERMINATION
Section 6.1 Termination......................................................................... 19
Section 6.2 Effect of Termination............................................................... 20
ARTICLE VII
MISCELLANEOUS
Section 7.1 Notices............................................................................. 20
Section 7.2 Amendment; Waiver................................................................... 21
Section 7.3 Assignment.......................................................................... 22
Section 7.4 Entire Agreement.................................................................... 23
Section 7.5 Parties in Interest................................................................. 24
Section 7.6 Public Disclosure................................................................... 24
Section 7.7 Expenses............................................................................ 25
Section 7.8 Governing Law; Submission to Jurisdic-
tion; Selection of Forum.......................................................... 25
Section 7.9 Counterparts........................................................................ ▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ AGREEMENT, dated as of December 16, 1996,
among American Standard Companies, Inc., a Delaware corporation ("ASCI" or the
"Company"), on the one hand, and ▇▇▇▇▇ & Company, L.P., a Delaware limited
partnership ("▇▇▇▇▇"), and ▇▇▇▇▇ ASI Partners, L.P., a Delaware limited
partnership ("ASI Partners"), on the other hand.
W I T N E S S E T H :
WHEREAS, ▇▇▇▇▇, ASI Partners and their Affiliates (as defined
in Section 1.1), including certain funds managed by ▇▇▇▇▇ (together, the "▇▇▇▇▇
Group") own 21,659,377 shares (the "▇▇▇▇▇ Shares") of common stock, par value
$.01 per share, of ASCI ("ASCI Common Stock");
WHEREAS, ASI Partners desires to sell and transfer to ASCI,
and ASCI desires to purchase from ASI Partners certain of the ▇▇▇▇▇ Shares;
WHEREAS, ASCI has agreed to issue to ASI Partners certain
warrants to buy 3,000,000 shares of ASCI Common Stock in connection with such
purchase by ASCI of certain of the ▇▇▇▇▇ Shares; and
WHEREAS, ▇▇▇▇▇ and ASI Partners desire that ASCI facilitate
the sale to the public through a secondary offering of certain of the ▇▇▇▇▇
Shares;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and on the terms and subject to the conditions
set forth herein, the parties
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hereto, each representing to the others that its execution, delivery and
performance of this Agreement has been fully and duly authorized, agree as
follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Specific Definitions. As used in this
Agreement, the following terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any person, any person
directly or indirectly controlling, controlled by, or under common
control with, such other Person at any time during the period for which
the determination of affiliation is being made.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day on
which banks in New York City are authorized or obligated by law or
executive order to close.
"Closing" shall mean the closing of the Offering described in Section 3.1 and of
the other transactions contemplated by this Agreement to close
simultaneously therewith.
"Closing Date" shall mean the date on which the Closing occurs.
"Closing Price" of ASCI Common Stock on any day shall mean the last reported
sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices
regular way of the Common Stock, in each case on the New York Stock
Exchange, or, if the Common Stock is not listed or admitted to trading
on such Exchange, on the principal national securities exchange or
quotation system on which the Common Stock is listed or admitted to
trading or quoted, or, if not listed or admitted to trading or quoted
on any national securities exchange or quotation system, the average of
the closing bid and asked prices of the Common Stock in the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similarly generally
accepted reporting service, or, if not so available in such manner, as
furnished by any New York Stock Exchange
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member firm selected from time to time by the board of directors of the
Company for the purpose. When reference is made in this Agreement to
the closing price of ASCI Common Stock on the New York Stock Exchange,
such price shall mean the closing price reported in the New York Stock
Exchange, Inc. composite transactions reporting system (as reported in
the New York City edition of The Wall Street Journal or, if not so
reported, another authoritative source).
"Governmental Entity" shall mean any supranational, national, federal, state or
local judicial, legislative, executive or regulatory authority.
"Transaction" shall mean the sale of all or substantially all of the shares of
capital stock or of all or substantially all of the assets of the
Company, including by merger, consolidation, tender offer, sale of
assets or any similar transaction, to any person, or the acquisition of
control of 50% or more of the combined voting power of all capital
stock or 50% or more (or the right to designate 50% or more) of the
seats on the board of directors, of the Company by any person or group
by tender offer, proxy solicitation or exchange offer or in a
transaction to which the Company is a party.
"Transaction Value" shall mean the sum of the cash and the fair value of any
securities, rights or other assets received per share by holders of
ASCI Common Stock in a Transaction, with the fair value of any non-cash
assets received being determined by an investment banking firm of
recognized stature designated in good faith by ASCI's board of
directors or, if ASI Partners does not agree with such determination,
as determined by agreement by such firm and another investment banking
firm of recognized stature designated in good faith by ASI Partners, or
failing such agreement, by a third investment banking firm of
recognized stature designated by such two firms.
Section 1.2 Other Terms. Other terms are defined elsewhere in
this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
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ARTICLE II
PURCHASE SHARES
Section 2.1 Purchase and Sale of Purchase Shares. On the terms
and subject to the conditions set forth herein, at the Closing, ASI Partners
agrees to sell and transfer to ASCI, and ASCI agrees to purchase from ASI
Partners, at the Offering Price (as hereafter defined), that number of ▇▇▇▇▇
Shares (the "Purchase Shares") equal to $300,000,000 divided by the Offering
Price, rounded to the nearest whole share, and reduced by the number of such
shares included in and purchased by the underwriters pursuant to an option (the
"Option") to be granted to the underwriters of the Offering to purchase up to
15% of the Registered Shares (as hereafter defined) in order to cover
over-allotments, ASI Partners hereby agreeing to provide such option to such
underwriters for thirty days following the date of the prospectus for such
Offering. The Purchase Shares shall be free of any liens, charges or
encumbrances. The Purchase Shares shall not be purchased or sold pursuant to
this Agreement unless the Registered Shares are sold at the Closing.
Section 2.2 Closing; Delivery and Payment.
(a) The closing shall take place at such time and
place in New York City simultaneously with the Closing of the Offering (as
hereafter defined) as ASI Partners and ASCI shall agree.
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(b) On the Closing Date, ASI Partners shall deliver to ASCI
certificates representing the Purchase Shares (less any shares subject to the
Option) duly endorsed and in form for transfer to ASCI, and ASCI shall pay to
ASI Partners the Offering Price for the Purchase Shares in immediately available
funds to an account designated by ASI Partners not less than two Business Days
prior to the Closing; any Purchase Shares which are subject to the Option but
are not purchased by the underwriters shall be purchased and paid for by ASCI in
such manner on or before the second Business Day following the day on which the
Option expires or is relinquished by the underwriters.
ARTICLE III
OTHER AGREEMENTS
Section 3.1 Registered Underwritten Secondary Sale.
(a) The Company will use its best efforts (i) to
file a registration statement for an underwritten secondary offering of all of
the ▇▇▇▇▇ Shares other than (A) the Purchase Shares and (B) up to 3,000,000 of
the ▇▇▇▇▇ Shares (in addition to the ▇▇▇▇▇ Shares currently held by Affiliates
of ▇▇▇▇▇ and ASI Partners) which the ▇▇▇▇▇ Group elects to retain (the
"Registered Shares") with the Securities and Exchange Commission by December 31,
1996 and (ii) prior to February 15, 1997 to effect the registration of the
Registered
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Shares under the Securities Act of 1933, as amended, for sale in an underwritten
public offering (the "Offering").
(b) ▇▇▇▇▇ and ASI Partners agree that they and the other
members of the ▇▇▇▇▇ Group will sell the Registered Shares to the underwriters
in the Offering so long as (1) the per share purchase price at which the
Registered Shares are initially offered to the public (the "Offering Price")
less underwriting commissions or discounts (the "Net Offering Price") is to the
satisfaction of ASI Partners in its sole discretion, (2) the terms and
conditions of the underwriting (including indemnities and sharing of expenses,
but excluding underwriters' commissions and discounts) are not less favorable to
ASI Partners than those in the underwriting agreements relating to the secondary
offering of ASCI Common Stock pursuant to the ASCI prospectus dated September
21, 1995, with such changes to which ASI Partners does not reasonably object,
(3) the Closing of the offering occurs on or before February 28, 1997, and (4)
the underwriters of the Offering will be such investment banking firms as ASI
Partners and ASCI shall agree upon.
(c) ▇▇▇▇▇ and ASI Partners (without limiting ASI Partners'
rights under Section 3.1(b)), for themselves and any other members of the ▇▇▇▇▇
Group, and ASCI agree to cooperate with one another and to use all reasonable
efforts to cause the Offering to occur and to close as contemplated by this
Section 3.1.
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(d) The parties agree that the indemnity provisions contained
in Section 8 of the Stockholders Agreement (as hereinafter defined) shall be
applicable to the Offering.
Section 3.2 Transaction Payment. If at any time after the
Closing and prior to January 31, 1998 (or prior to October 1, 1998 in the case
of a Transaction proposed prior to January 31, 1998 either non-publicly in
writing to ASCI or orally to ASCI and discussed by the Board of Directors of
ASCI, or publicly, and not consummated or withdrawn as of January 31, 1998, it
being agreed that a proposal shall be considered withdrawn if the proposer has
not contacted the Company or made a public statement concerning the proposal for
a period of more than 3 months as of January 31, 1998), ASCI consummates a
Transaction which has not directly or indirectly been actively encouraged or
supported by ▇▇▇▇▇, ASI Partners or their Affiliates after the date hereof, ASCI
shall make a cash payment to ASI Partners equal to (i) the number of Purchase
Shares sold pursuant to this Agreement multiplied by the excess, if any, of (A)
the Transaction Value over (B) the Offering Price plus (ii) the number of
Registered Shares sold by ASI Partners pursuant to this Agreement multiplied by
the excess, if any, of (A) the Transaction Value over (B) the Net Offering
Price. In the event that subsequent to the Closing there is a change in the
number of shares of ASCI Common Stock issued and outstanding as a result of a
reclassification, stock split (including a reverse split), stock dividend or
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distribution or other similar transaction or any other transaction that would
cause an adjustment under Section 10 of the Warrant Agreement (as defined in
Section 3.3(a)), the number of Purchase Shares and of Registered Shares used in
the foregoing determination of the cash payment to ASI Partners shall be
equitably adjusted to eliminate any dilutive or accretive effects of such event
or transaction. Such payment shall be made in immediately available funds at the
time of consummation of such Transaction or such later date as the value of any
non-cash assets is determined for purposes of establishing the Transaction
Value. ASCI shall also pay interest on any part of such payment made after
consummation of such Transaction from the date of such consummation to the date
of payment at an annual rate equal to the prime lending rate of Citibank, N.A.
in effect at the time of consummation of such Transaction. Any action by any
director of ASCI designated by ASI Partners taken in such director's capacity as
a director in meetings of or discussions with other directors or with senior
officers of ASCI, or any action by any direct or indirect partner of ASI
Partners or limited partner of ▇▇▇▇▇ (other than an Affiliate of either of them
with respect to any action other than the voting or tendering of any of their
shares of ASCI Common Stock or the granting or withholding of proxies or
consents relating thereto) taken in such partner's individual capacity as a
shareholder of ASCI or otherwise, shall not be deemed to be direct or indirect
active
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encouragement or support of any Transaction by any of ASI Partners, ▇▇▇▇▇ or
their Affiliates. Without limiting the foregoing, should any person initiate any
discussion with ASI Partners, ▇▇▇▇▇ or any of their Affiliates concerning a
Transaction, such discussion shall not be deemed to be direct or indirect
encouragement or support of any Transaction if ASI Partners, ▇▇▇▇▇ or any of
their Affiliates, as the case may be, requests the other party to such
discussion to refer inquiries to ASCI. The Company agrees that it will not
intentionally delay the consummation of any Transaction for the purpose of
avoiding a payment under this Section 3.2.
Section 3.3 Warrants.
(a) At the Closing, the Company shall issue unregistered
warrants (the "Warrants") to ASI Partners or their designated direct or indirect
partners, permitting ASI Partners or such designees, subject to Section 3.3(b)
below, to purchase 3,000,000 shares of ASCI Common Stock at a price per share
equal to the Offering Price plus $10.00 (the "Warrant Exercise Price") or, at
the election of an original holder of the Warrants (including direct or indirect
partners to whom ASI Partners distributes the Warrants) to receive by
surrendering the Warrants without further payment a number of shares of ASCI
Common Stock equal to (i) the amount, if positive, equal to the then per share
Market Value (as defined in the Warrant Agreement) of ASCI Common Stock less the
Warrant Exercise Price, (ii) divided by such per share Market
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Value and (iii) multiplied by the number of shares for which the surrendered
Warrants could be exercised. Such Warrants shall be exercisable prior to the
fifth anniversary of the Closing Date at the times and upon the terms and
conditions set forth in the Warrant Agreement attached hereto as Annex A (the
"Warrant Agreement").
(b) The Warrants shall not be exercisable until the
possibility of a payment becoming due to ASI Partners pursuant to Section 3.2 of
this Agreement no longer exists, and if any Transaction occurs which would
entitle ASI Partners to such a payment, the Warrants shall expire at the time
such Transaction occurs, provided that payment is made as required by Section
3.2 hereof.
(c) The Warrants need not be registered by ASCI under the
Securities Act of 1933, as amended (the "Act"). ▇▇▇▇▇ and ASI Partners agree
that they and their distributees will not sell, transfer, or otherwise dispose
of Warrants in any manner that would cause a violation of the registration
requirements of the Act, and that the Company may place an appropriate legend on
the Warrant certificates, and institute stop transfer procedures, designed to
assure that no such violations occur. The Company will not, however, require
▇▇▇▇▇ or ASI Partners to provide it with a legal opinion as to the compliance
with the Act of the distribution of Warrants to direct or indirect partners in
ASI Partners or the sale by ASI
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Partners or any direct or indirect partners in ASI Partners of Warrants to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
(d) The Company agrees that it will take all action necessary
in a timely manner, including any required registration under the Act of any
shares of ASCI Common Stock issued by it upon exercise of Warrants and the
subsequent sale of such shares without further such registration, in order that
the issuance by it of ASCI Common Stock on exercise of Warrants will not violate
the registration requirements of the Act and that the shares of such ASCI Common
Stock acquired by persons exercising Warrants can be freely resold by them
without registration under the Act other than such registration as may
previously have been effected, provided that Affiliates of the Company may be
required to comply with Rule 144 under the Act or any successor provision. The
Company shall bear all expenses (including, without limitation, all filing fees)
incurred by it in connection with its performance of this Section 3.3(d). The
holders of a Warrant or shares issued upon exercise of Warrants shall not be
required to make any representations (other than as to the ownership of such
Warrants or shares) or provide any indemnity in connection with any registration
effected as contemplated by this Section 3.3. If ASI Partners reasonably
believes that further assurance is needed at a time when the Warrants have
become exercisable, the Company will at the request of ASI Partners provide ASI
Partners with either an opinion of
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counsel of recognized stature (who may be the general counsel of or other
counsel regularly engaged by the Company) or a no-action letter from the
Securities and Exchange Commission's staff to the effect that shares of ASCI
Common Stock acquired upon the exercise of Warrants may be freely resold by the
Warrant holder without registration under the Act other than such registration
as may previously have been effected and, in the case of an Affiliate of the
Company, provided such resale is in accordance with the requirements of Rule 144
under the Act or a successor rule or regulation. If the Company does not provide
such an opinion or no-action letter in a timely manner, it shall use its best
efforts, at its expense, promptly to effect the registration under the Act of
the shares of ASCI Common Stock issued or issuable upon the exercise of Warrants
to the extent necessary to permit the resale thereof in compliance with the Act.
Section 3.4 Modification of Agreements. The terms and
provisions of the Stockholders Agreement and the agreement between American
Standard Inc., ASCI and ▇▇▇▇▇ dated as of December 2, 1994 (the "▇▇▇▇▇
Agreement") are hereby modified and amended to provide for and permit the
transactions contemplated by this Agreement.
Section 3.5 Confidentiality. ▇▇▇▇▇ and ASI Partners agree that
they shall keep (and shall use their best efforts to cause their general
partners, officers, employees, representatives, outside advisors and Affiliates
to keep) all
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non-public information relating to the Company (including any such information
received prior to the date hereof) confidential except information which (i)
becomes known to such party from a source, other than the Company, its
directors, officers, employees, representatives or outside advisors, which is
not known by ▇▇▇▇▇ or ASI Partners to be obligated to the Company to keep such
information confidential or (ii) becomes generally available to the public
through no breach of this Agreement. Notwithstanding the foregoing, ▇▇▇▇▇ and
ASI Partners may disclose non-public information if required to do so by a court
of competent jurisdiction or by any Governmental Entity; provided, however, that
prompt notice of such required disclosure be given to the Company prior to the
making of such disclosure so that the Company may seek a protective order or
other appropriate remedy. In the event that such protective order or other
remedy is not obtained, the party hereto required to disclose the non-public
information will disclose only that portion which such party is advised by
opinion of counsel is legally required to be disclosed and will request that
confidential treatment be accorded such portion of the non-public information.
Section 3.6 Indemnity.
(a) The Company shall indemnify and hold harmless each of
▇▇▇▇▇, ASI Partners and their partners, officers, employees, representatives,
outside advisors, agents and Affiliates from and against any and all losses,
claims,
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damages or liabilities (or actions or proceedings in respect thereof), including
reasonable fees and expenses of counsel incurred in investigation or defense of
any of the same or in successfully asserting any of their respective rights
hereunder, which are not the subject of the indemnification provisions of the
underwriting agreements relating to the Offering or of Section 8 of the
Stockholders Agreement and which arise, directly or indirectly, out of claims or
charges against any of them resulting from the entering into or performance by
▇▇▇▇▇ or ASI Partners of this Agreement or the transactions contemplated hereby
or from any action or inaction as a stockholder of the Company other than claims
or charges (1) by direct or indirect partners of ASI Partners or members of the
▇▇▇▇▇ Group by reason of ▇▇▇▇▇ or ASI Partners having agreed to sell, or
selling, ASCI Common Stock pursuant to this Agreement, having agreed to any of
the restrictions or commitments in this Agreement with respect to ASCI Common
Stock, or for any alleged breach of fiduciary duty as general partners of ▇▇▇▇▇
or ASI Partners or any investment partnerships that are direct or indirect
partners in ▇▇▇▇▇ or ASI Partners or for breach of any organizational or
investment agreement of ▇▇▇▇▇, ASI Partners or any such investment partnership
or (2) by ASCI for breach of any representation and warranty by ▇▇▇▇▇ or ASI
Partners contained in Article IV of this Agreement. This indemnity shall not
apply, however, to amounts paid in settlement of any such loss, claim, damage,
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liability, action or proceeding if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld).
(b) Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim referred to in
the preceding paragraph, such indemnified party will, if a claim in respect
thereof is to be made against the Company, give written notice to the latter of
the commencement of such action or proceeding, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
Company of its obligations under the preceding paragraph except to the extent
that the Company is materially prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, the Company will
be entitled to participate therein and to assume the defense thereof, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the Company to such indemnified party
of its election so to assume the defense thereof, the Company will not be liable
to such indemnified party for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof except for the reasonable
fees and expenses of any counsel retained by such indemnified party to monitor
such action or proceeding. Notwithstanding the foregoing, if such indemnified
party and the Company reasonably determine, based upon advice of their
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respective independent counsel, that a conflict of interest may exist between
the indemnified party and the Company with respect to such action and that it is
advisable for such indemnified party to be represented by separate counsel, such
indemnified party may retain other counsel, reasonably satisfactory to the
Company, to represent such indemnified party, and the Company shall pay all
reasonable fees and expenses of such counsel. The Company, in the defense of any
such claim or litigation, shall not, except with the consent of such indemnified
party, which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
(c) Any indemnification required to be made by the Company
pursuant hereto shall be made by periodic payments to the indemnified party
during the course of the action or proceeding, as and when bills are received by
the Company with respect to an indemnifiable loss, claim, damage, liability or
expense incurred by such indemnified party, provided that the Company receives
an undertaking by or on behalf of such indemnified party to repay amounts so
advanced if it shall ultimately be determined that such indemnified party is not
entitled to be indemnified hereunder.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
ASCI represents and warrants as to itself to ▇▇▇▇▇
and ASI Partners, and ▇▇▇▇▇ and ASI Partners each represents and warrants as to
itself to ASCI, as follows:
(a) It has duly obtained all necessary authority for the
execution, delivery and performance of this Agreement by it; it has duly
executed and delivered this Agreement; and this Agreement is a valid and legally
binding agreement, enforceable against it in accordance with its terms, assuming
it has been duly executed and delivered by the other parties.
(b) Performance of this Agreement by it will not violate or
conflict with any law, regulation, order or agreement, or in the case of ASCI
its certificate of incorporation or by-laws, and it requires no governmental
approvals or third party consents to enter into and perform its obligations
pursuant to this Agreement. Such execution and performance does not and will not
constitute a default under any agreement or obligation binding on it or result
in the forfeiture or loss of any rights or assets by it except as specifically
provided for in this Agreement. The representations and warranties of ▇▇▇▇▇ and
ASI Partners herein assume the correctness of those of ASCI herein.
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ARTICLE V
CONDITIONS TO CLOSING
Conditions to the Obligations of ASCI, ▇▇▇▇▇ and ASI Partners.
The obligations of the parties hereto to effect the Closing are subject to the
satisfaction (or waiver) prior to the Closing of the following conditions:
(a) No Injunctions. There shall not be in effect any statute,
regulation, order, decree or judgment of any Governmental Entity which makes
illegal or enjoins or prevents in any material respect the consummation of the
transactions contemplated by this Agreement.
(b) Representations. As to any party to this Agreement, all
representations made to such party to this Agreement in Article IV hereof shall
be true and correct in all material respects at and as of the Closing Date, and
such party shall have received a certificate of a senior officer of each party
making such representations to that effect.
(c) Agreements. As to any party to this Agreement, all
agreements made by another party or parties for the benefit of such party and to
be performed at or before the Closing shall have been duly performed in all
material respects or waived, and all transactions to be consummated at the
Closing shall be completed concurrently to the reasonable satisfaction of each
party.
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ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by written agreement of ASCI, ▇▇▇▇▇ and ASI Partners;
(b) either by ASCI or by ASI Partners and ▇▇▇▇▇, by written
notice of such termination to the other, if the Closing of the Offering shall
not have occurred on or prior to February 28, 1997 unless the failure to
consummate the Offering by such date shall be due to the failure of the party or
parties seeking to terminate this Agreement to have fulfilled in all material
respects its or their obligations under this Agreement);
(c) either by ASCI or by ASI Partners and ▇▇▇▇▇ if any court
of competent jurisdiction or other competent Governmental Entity shall have by
statute, rule, regulation, order, decree or injunction or other action
permanently restrained, enjoined or otherwise prohibited any of the transactions
contemplated by this Agreement;
(d) either by ASCI or by ASI Partners and ▇▇▇▇▇ if the other
has materially breached any agreement contained in this Agreement and such
breach is either not capable of being cured prior to the Closing or, if such
breach is capable of being cured, is not so cured within a reasonable amount of
time; or
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(e) by ASI Partners and ▇▇▇▇▇, if any person makes, and has
not withdrawn or abandoned, a bona fide proposal, either non-publicly in writing
to ASCI or publicly, to effect a Transaction.
Section 6.2 Effect of Termination. In the event of the
termination of this Agreement in accordance with Section 6.1 hereof, this
Agreement shall thereafter become void and have no effect, and no party hereto
shall have any liability to the other party hereto or their respective
Affiliates, directors, officers or employees, except for the obligations of the
parties hereto contained in this Section 6.2 and in Sections 7.1, 7.6, 7.7 and
7.8 hereof, and except that nothing herein will relieve any party from liability
for any breach of this Agreement prior to such termination.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Notices. All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended, if delivered
registered or certified mail, return receipt requested, or by a national courier
service, if sent by facsimile transmission, provided that the facsimile
transmission is promptly confirmed by telephone confirmation thereof, or on the
third day after posting in the United States postage prepaid if sent by
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registered or certified mail, return receipt requested, to the person at the
address set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
To ASCI:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Vice President and General Counsel
American Standard Companies Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇ and to ASI Partners:
▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 7.2 Amendment; Waiver. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of
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25
an amendment, by ASCI, ASI Partners and ▇▇▇▇▇, or in the case of a waiver, by
the party against whom the waiver is to be effective. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and,
except as otherwise provided herein, shall not be exclusive of any rights or
remedies provided by law.
Section 7.3 Assignment. No party to this Agreement may assign
any of its rights or obligations under this Agreement without the prior written
consent of each other party hereto, provided that subsequent to the Closing,
▇▇▇▇▇ and ASI Partners may make such assignments with notice to ASCI but without
the need for its consent and without relieving ▇▇▇▇▇ or ASI Partners of their
responsibilities for any obligation, to their Affiliates or to any direct or
indirect partner of ▇▇▇▇▇ or ASI Partners, and the Company may assign or
transfer its rights and obligations hereunder to any successor entity in
connection with a merger of the Company or sale of all, or substantially all, of
the assets of the Company. Prior to any transfer of rights or obligations by
▇▇▇▇▇ or ASI Partners hereunder, ASI Partners shall designate in writing to the
Company a representative (which may be ▇▇▇▇▇ or ASI Partners and which, if not,
is approved by the Company)
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26
to act on behalf of ▇▇▇▇▇ and ASI Partners and any such transferee in connection
with any exercise of ▇▇▇▇▇'▇, ASI Partners' and such transferee's rights
hereunder. All actions to be taken by ▇▇▇▇▇, ASI Partners and any of their
transferees hereunder, including the right to provide consents or waivers, shall
only be exercised by such representative. The Company shall be entitled to rely
on any consent or waiver given or any other action taken hereunder by such
representative as the consent, waiver, or action, as the case may be, of ▇▇▇▇▇,
ASI Partners and each of their transferees. ▇▇▇▇▇ and ASI Partners shall be
entitled, but only with the written consent of the Company, not to be
unreasonably withheld, to change such representative at any time.
Section 7.4 Entire Agreement. This Agreement, including Annex
A hereto, contains the entire agreement among the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, among them with respect to such matters other
than the Stockholders Agreement and the ▇▇▇▇▇ Agreement, and any written
agreement of the parties that expressly provides that it is not superseded by
this Agreement. Unless this Agreement is terminated prior to the Closing, the
provisions of Sections 11 and 12(a) of the Stockholders Agreement and 3(a) of
the ▇▇▇▇▇ Agreement shall be inapplicable to any tender or sale of ASCI Common
Stock by ASI Partners or any of its Affiliates in a public tender offer and upon
such a sale this Agreement
-23-
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shall terminate. Notwithstanding the foregoing, the parties agree that from and
after the Closing, the Stockholders Agreement and the ▇▇▇▇▇ Agreement shall
terminate and be of no force or effect, except that the indemnification
provisions contained in Section 8 of the Stockholders Agreement shall survive
until they shall otherwise terminate in accordance with Section 13 of the
Stockholders Agreement and the indemnification provisions contained in Section 5
of the ▇▇▇▇▇ Agreement shall survive for an identical period of time.
Section 7.5 Parties in Interest. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any person other than ASCI, ASI Partners or ▇▇▇▇▇,
and their successors or permitted assigns, any rights or remedies under or by
reason of this Agreement.
Section 7.6 Public Disclosure. Notwithstanding anything herein
to the contrary, each of the parties to this Agreement hereby agrees with the
other party hereto that, except as may be required to comply with the
requirements of any applicable laws, and the rules and regulations of the New
York Stock Exchange, no press release or similar public announcement or
communication shall, if prior to the Closing, be made or caused to be made
concerning the execution or performance of this Agreement unless the parties
shall have consulted in advance with respect thereto.
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Section 7.7 Expenses. Except as otherwise expressly provided
in this Agreement, whether or not the transactions contemplated by this
Agreement are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne as
provided in Section 2.3 of the Stockholders Agreement to the extent covered
thereby and, to the extent not so covered, shall be borne by the party incurring
such expenses.
Section 7.8 Governing Law; Submission to Jurisdiction;
Selection of Forum. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK. Each party hereto agrees that it shall bring any action or proceeding
in respect of any claim arising out of or related to this Agreement or the
transactions contained in or contemplated by this Agreement, whether in tort or
contract or at law or in equity, exclusively in the United States District Court
for the Southern District of New York or the Supreme Court of the state of New
York for the county of New York, and solely in connection with claims arising
under this Agreement or the transactions contained in or contemplated by this
Agreement (i) irrevocably submits to the exclusive jurisdiction of such courts,
(ii) waives any objection to laying venue in any such action or proceeding in
such courts, (iii) waives any objection that such courts are an inconvenient
forum or do not have jurisdiction over any party hereto and (iv) agrees that
service of process upon such party in any such action or
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29
proceeding shall be effective if notice is given in accordance with section 6.1
of this Agreement.
Section 7.9 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
AMERICAN STANDARD COMPANIES INC.
By:___________________________
Name:
Title:
▇▇▇▇▇ & COMPANY, L.P.
By:__________________________
▇▇▇▇▇ Companies, Inc.,
Its General Partner
By:______________________
Name:
Title:
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▇▇▇▇▇ ASI PARTNERS, L.P.
By:___________________________
▇▇▇▇▇ American Standard
Partners, L.P.,
Its General Partner
By:______________________
Name:
Title:
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31
ANNEX A
TO STOCK DISPOSITION AGREEMENT
================================================================================
AMERICAN STANDARD COMPANIES INC.
and
CITIBANK, N.A.
Warrant Agent
--------------------------------------------------
Warrant Agreement
Dated as of _______ __, 1997
================================================================================
32
INDEX
Page
----
Section 1. Certain Definitions........................................................................ 2
Section 2. Appointment of Warrant Agent............................................................... 4
Section 3. Form of Warrant Certificates............................................................... 4
Section 4. Countersignature and Registration.......................................................... 5
Section 5. Transfer, Split Up, Combination and
Exchange of Warrant Certificates; Mutilated,
Destroyed, Lost or Stolen Warrant
Certificates............................................................................ 6
Section 6. Exercise of Warrants; Purchase Price;
Expiration Date of Warrants............................................................. 8
Section 7. Cancellation and Destruction of Warrant
Certificates............................................................................ 12
Section 8. Reservation and Availability of Shares of
Common Stock; Reports; Taxes............................................................ 13
Section 9. Common Stock Record Date................................................................... 16
Section 10. Adjustment of Purchase Price, Number of
Shares or Number of Warrants............................................................ 17
Section 11. Certification of Adjusted Purchase Price
or Number of Shares..................................................................... 30
Section 12. Consolidation, Merger or Sale or Transfer
of Assets............................................................................... 31
Section 13. Fractional Warrants and Fractional Shares.................................................. 33
Section 14. Right of Action............................................................................ 35
Section 15. Agreement of Warrant Certificate Holders................................................... 35
Section 16. Warrant Certificate Holder Not Deemed a
Shareholder............................................................................. 36
Section 17. Concerning the Warrant Agent............................................................... 36
Section 18. Merger or Consolidation or Change of Name
of Warrant Agent........................................................................ 37
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Page
----
Section 19. Duties of Warrant Agent................................................................... 39
Section 20. Change of Warrant Agent................................................................... 43
Section 21. Issuance of New Warrant Certificates...................................................... 45
Section 22. Purchase of Warrants by the Company....................................................... 45
Section 23. Notice of Proposed Actions................................................................ 46
Section 24. Notices................................................................................... 47
Section 25. Supplements and Amendments................................................................ 48
Section 26. Successors................................................................................ 49
Section 27. Benefits of this Agreement................................................................ 49
Section 28. Governing Law; Submission to Jurisdiction;
Selection of Forum...................................................................... 50
Section 29. Counterparts.............................................................................. 51
Section 30. Captions.................................................................................. 51
Exhibit A Form of Warrant Certificate
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WARRANT AGREEMENT
This Agreement, dated as of _______ __, 1997, between AMERICAN
STANDARD COMPANIES INC., a Delaware corporation (the "Company"), and CITIBANK,
N.A., a national banking association (the "Warrant Agent").
W I T N E S S E T H
WHEREAS, the Company has entered into a Stock Disposition
Agreement, dated as of December 16, 1996 (the "Stock Disposition Agreement"),
with ▇▇▇▇▇ & Company, L.P., a Delaware limited partnership ("▇▇▇▇▇"), and ▇▇▇▇▇
ASI Partners, L.P., a Delaware limited partnership ("ASI Partners"), providing,
inter alia, for the disposition of shares of common stock, par value $.01 (the
"Shares" or the "Common Stock"), of the Company and the issuance by the Company
of warrants (the "Warrants") to purchase, in the aggregate, three million shares
of Common Stock pursuant to the terms of the Stock Disposition Agreement; and
WHEREAS, the Company wishes the Warrant Agent to act on behalf
of the Company and the Warrant Agent is willing so to act in connection with the
issuance, division, transfer, exchange and exercise of Warrants;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
35
Section 1. Certain Definitions. For purposes of this
Agreement, the terms set forth below have the meanings indicated. Other terms
are defined elsewhere in this Agreement. Capitalized terms used in this
Agreement but not defined herein have the meaning given to them in the Stock
Disposition Agreement.
(a) "Affiliate" shall mean, with respect to any person, any
person directly or indirectly controlling, controlled by, or under common
control with, such other Person at any time during the period for which the
determination of affiliation is being made.
(b) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in New York are authorized or
obligated by law or executive order to close.
(c) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(d) "Closing Date" shall mean the Closing Date under the Stock
Disposition Agreement.
(e) "Closing Price" shall mean the last reported sale price
regular way on the day in question or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices regular way of the
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36
Common Stock, in each case on the New York Stock Exchange ("NYSE"), or, if the
Common Stock is not listed or admitted to trading on the NYSE, on the principal
national securities exchange or quotation system on which the Common Stock is
listed or admitted to trading or quoted, or, if not listed or admitted to
trading or quoted on any national securities exchange or quotation system, the
average of the closing bid and asked prices of the Common Stock in the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similarly generally accepted reporting
service, or, if not so available in such manner, as furnished by any NYSE member
firm selected from time to time by the board of directors of the Company for the
purpose. In the case of a Closing Price of Common Stock on the NYSE, such price
shall mean the closing price reported in the NYSE composite transactions
reporting system (as reported in the New York City edition of The Wall Street
Journal or, if not so reported, another authoritative source).
(f) "Original Warrant Holder" of a Warrant shall mean a Person
to whom the Warrant was issued on the Closing Date and any direct or indirect
partner in ASI Partners to whom ASI Partners distributes the Warrant.
(g) "Person" shall mean an individual, corpora-
tion, limited liability company, association, partnership,
joint venture, trust, unincorporated organization,
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37
government or political subdivision thereof or governmental agency or other
entity.
(h) "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the State of New York are not authorized or obligated by law or
executive order to close.
Section 2. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Warrant Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Warrant Agents as
it may, in its sole discretion, deem necessary or desirable.
Section 3. Form of Warrant Certificates. The Warrant
Certificates (together with the form of election to purchase Common Stock and
the form of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions
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38
of this Agreement and the Stock Disposition Agreement or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or quotation system on which the
Warrants may from time to time be listed, admitted to trading or quoted. Subject
to the provisions of Section 21 hereof, the Warrant Certificates, whenever
issued, shall be dated as of the Closing Date and on their face shall entitle
the holders thereof to purchase such number of shares of Common Stock as shall
be set forth therein for $_______ per share (the "Purchase Price"), but the
number of such shares and the Purchase Price shall be subject to the adjustments
as provided herein. Not more than 3,000,000 Warrants may be issued pursuant to
this Warrant Agreement except as provided in Section 10 hereof.
Section 4. Countersignature and Registration. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman,
President, Chief Executive Officer or any of its Vice Presidents, either
manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Warrant
Certificate shall be manually countersigned by the Warrant Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any
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39
of the Warrant Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issuance and delivery by the Company,
such Warrant Certificates, nevertheless, may be countersigned by the Warrant
Agent, issued and delivered with the same force and effect as though the person
who signed such Warrant Certificates had not ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Company to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any such person
was not such an officer.
The Warrant Agent will keep or cause to be kept, at one of its
offices in New York, New York, books for registration and transfer of the
Warrant Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Warrant Certificates, the number of
Warrants evidenced on its face by each of the Warrant Certificates and the date
of each of the Warrant Certificates.
Section 5. Transfer, Split Up, Combination and Exchange of
Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
Subject to the provisions of Section 13 hereof, at any time after the Close of
Business on the date hereof, and at or prior to the Close of
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40
Business on the Expiration Date (as such term is hereinafter defined), any
Warrant Certificate or Warrant Certificates may be transferred, split up,
combined or exchanged for another Warrant Certificate or Warrant Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock as the Warrant Certificate or Warrant Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Warrant Certificate shall make such request in
writing delivered to the Warrant Agent, and shall surrender the Warrant
Certificate or Warrant Certificates to be transferred, split up, combined or
exchanged at the principal office of the Warrant Agent. The Company will make a
new Warrant Certificate or Warrant Certificates available to the Warrant Agent
for delivery of such Warrant Certificates to the appropriate registered holder.
Thereupon the Warrant Agent shall countersign and deliver to the person entitled
thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Warrant Certificates.
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Warrant Certificate,
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41
and, in case of loss, theft or destruction, of indemnity or, in the case of any
holder other than an Original Warrant Holder, security reasonably satisfactory
to them, if requested, and reimbursement to the Company and the Warrant Agent of
all reasonable expenses incidental thereto, and upon surrender to the Warrant
Agent and cancellation of the Warrant Certificate if mutilated, the Company will
make and deliver a new Warrant Certificate of like tenor to the Warrant Agent
for delivery to the registered holder in lieu of the Warrant Certificate so
lost, stolen, destroyed or mutilated.
Section 6. Exercise of Warrants; Purchase Price; Expiration
Date of Warrants. (a) From and after the time that it is no longer possible for
any payment to be made to ASI Partners pursuant to Section 3.2 of the Stock
Disposition Agreement, the registered holder of any Warrant Certificate may
exercise the Warrants evidenced thereby in whole or in part upon presentation
and surrender of the Warrant Certificate, with the Form of Election to Purchase
on the reverse side thereof duly executed, to the Warrant Agent at the principal
office of the Warrant Agent in New York, New York, together with payment of the
Purchase Price in immediately available funds for each share of Common Stock as
to which the Warrants are exercised, at or prior to the Close of Business on the
fifth anniversary of the Closing Date or, if such date is not a Business Day,
the
-8-
42
next Business Day thereafter (the "Expiration Date"); provided, however, that
the Company, in its sole discretion, may instead elect (a "Spread Value
Election") to pay, either in cash or Shares (valued at Market Value, as defined
below), to such holder against surrender of the Warrants the product of (i) the
number of shares of Common Stock as to which the Warrants are exercised, times
(ii) the amount of the excess, if any, of (A) the average of the Closing Price
per share of the Common Stock for the five Trading Days prior to the date the
Warrants are exercised or surrendered (the "Market Value") over (B) the Purchase
Price, in which case the registered holder will not be required to submit such
cash payment for the Purchase Price. The Company shall, at the request by any
Warrant holder received by the Company five Business Days in advance of a
proposed exercise of a Warrant, advise such holder at least one Business Day
prior to the proposed exercise date whether the Company elects in its discretion
to pay for the surrender of the Warrant, without payment by the holder, in
either cash or Shares. The Company further agrees that, upon the exercise of any
Warrant by any Original Warrant Holder, the Company will exercise its Spread
Value Election to make such payment in cash or Shares for surrender of Warrants
by such Original Warrant Holder. The Company may also by notice to the Warrant
Agent make a Spread Value Election in advance, specifying that payment by it
will be made in cash, in
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43
Shares or reserving its right to elect either in its discretion from time to
time, in which case such Spread Value Election shall be binding in accordance
with its terms on the Company and the Warrant holders for all exercises of
Warrants subsequent to such notice. The Company shall give prompt notice of such
election to the Warrant holders. In the event that a Transaction occurs after
the date a payment by reason thereof would otherwise be due, any Warrant holder
exercising a Warrant may require the Company to exercise its Spread Value
Election for cash, and the Company shall be obligated to do so. Except as
provided in the immediately preceding sentence, whenever the Company exercises a
Spread Value Election upon exercise of a Warrant, it shall, within three
Business Days of the date of its exercise of such Spread Value Election, (i)
make its choice of payment in cash or the issuance of shares of ASCI Common
Stock pursuant to the Spread Value Election and (ii) make to the Warrant holder
the cash payment or delivery of the shares, but any shares of ASCI Common Stock
delivered pursuant to such Spread Value Election shall be deemed to have been
issued and delivered to the Warrant holder and to be outstanding as of the date
provided in Section 9 of this Agreement notwithstanding such deferred delivery
by the Company.
(b) The Purchase Price is subject to adjustment from time to
time as provided in Section 10 hereof.
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44
(c) Upon receipt of a Warrant Certificate, with the Form of
Election to Purchase duly executed, accompanied, in the case of an election by
any holder other than an Original Warrant Holder, by payment, if any, of the
Purchase Price for the shares to be purchased and an amount equal to any
applicable tax or governmental charge payable by the holder pursuant to Section
8 in cash, or by certified check or bank draft payable to the order of the
Company, the Warrant Agent shall within two Business Days (i) requisition from
any transfer agent of the Common Stock of the Company certificates for the
number of whole shares of Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, (ii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of whole or fractional shares and (iii) after receipt of such
certificates cause the same to be delivered to or upon the order of the
registered holder of such Warrant Certificate, registered in such name or names
as may be designated by such holder, and, when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Warrant Certificate. Upon instruction or request from time to time by the
Company, the Warrant Agent will pay to or at the direction of the Company any
amounts of cash received and held by the Warrant Agent for the Company's
account.
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45
(d) In case the registered holder of any Warrant Certificate
shall exercise less than all the Warrants evidenced thereby, a new Warrant
Certificate evidencing Warrants equivalent to the Warrants remaining unexercised
shall be issued by the Warrant Agent at the Company's expense to the registered
holder of such Warrant Certificate or to his duly authorized assigns, subject to
the provisions of Section 13 hereof.
(e) All Warrants shall expire and be of no further force and
effect upon the occurrence of any Transaction (as defined in the Stock
Disposition Agreement) which will require a payment to ASI Partners by the
Company pursuant to Section 3.2 of the Stock Disposition Agreement, provided
payment is made as required by such Section 3.2. The Company shall give prompt
notice to the Warrant Agent and the Warrant holders of such expiration.
Section 7. Cancellation and Destruction of Warrant
Certificates. All Warrant Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Warrant Agent for cancellation or
in cancelled form, or, if surrendered to the Warrant Agent, shall be cancelled
by it, and no Warrant Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Warrant Agreement. The
Company shall deliver to the Warrant Agent
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46
for cancellation and retirement, and the Warrant Agent shall so cancel and
retire, any other Warrant Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Warrant Agent shall deliver all
cancelled Warrant Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Warrant Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 8. Reservation and Availability of Shares of Common
Stock; Reports; Taxes. The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock or its authorized and issued shares of Common Stock held in its treasury
the number of shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants. The transfer agent for the Common
Stock (the "Transfer Agent") 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. 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.
-13-
47
So long as the Common Stock issuable upon the exercise of
Warrants may be listed on the NYSE or any other national securities exchange,
the Company shall use its best efforts to cause all shares reserved for such
issuance to be listed on the NYSE or such other exchange upon official notice of
issuance upon such exercise.
The Company covenants and agrees that (i) it will take all
action necessary in a timely manner, including any required registration under
the Securities Act of 1933, as amended (the "Securities Act"), of any shares of
Common Stock issued by it upon exercise of Warrants and the subsequent sale of
such shares without further registration, in order that the issuance by it of
Common Stock on exercise of the Warrants will not violate the registration
requirements of the Securities Act and that the shares of Common Stock acquired
by Persons exercising Warrants can be freely resold by them without registration
under the Securities Act other than such registration as may previously have
been effected, provided that Affiliates of the Company may be required to comply
with Rule 144 of the Securities Act or any successor provisions thereto, and
(ii) it will take all such actions in a timely manner as may be necessary to
insure that all shares of Common Stock delivered upon exercise of Warrants, if
any, shall, at the time of delivery of the certificates for such shares (subject
to payment, if any, of the Purchase Price), be duly
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authorized, validly issued, fully paid and nonassessable, free of preemptive
rights and free from all taxes, liens, charges and security interests with
respect to the issue thereof.
The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the Warrant
Certificates and the initial issuance of shares of Common Stock upon the
exercise of Warrants. The Company shall not, however, be required to pay any tax
or governmental charge which may be payable in respect of any transfer involved
in the transfer or delivery of Warrant Certificates or the issuance or delivery
of certificates for Common Stock in a name other than that of the registered
holder of the Warrant Certificate evidencing Warrants surrendered for exercise
or to issue or deliver any certificates for shares of Common Stock upon the
exercise of any Warrants until any such tax or governmental charge shall have
been paid (any such tax or governmental charge being payable by the holder of
such Warrant Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax or
governmental charge is due.
So long as any of the Warrants remain outstanding, at the
request of a Warrant holder, the Company shall cause copies of any quarterly and
annual financial reports and of
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any information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC ("SEC Reports") pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to be mailed to such Warrant holder within 15 days after the later of
such request or such filing with the SEC. If the Company is not subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
nevertheless continue to cause SEC Reports, comparable to those that it would be
required to file pursuant to Section 13 or 15(d) of the Exchange Act if it were
then subject to the requirements of either such Section, to be filed with the
SEC for public availability (unless the SEC will not accept such a filing) and
mailed to holders of Warrants, upon their request, within the same time periods
as would have applied under the preceding sentence had the Company then been
subject to the requirements of Section 13 or 15(d) of the Exchange Act. The
Company shall make all such information available to investors, securities
analysts and broker-dealers who request it in writing.
Section 9. Common Stock Record Date. Each person in whose name
any certificate for shares of Common Stock is issued upon the exercise of
Warrants shall for all purposes be deemed to have become the holder of record
for the Common
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Stock represented thereby on, and such certificate shall be dated, the date upon
which the Warrant Certificate evidencing such Warrants was duly surrendered and
payment, if any, of the Purchase Price (and any applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Common Stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Common Stock transfer books of the Company are open.
Section 10. Adjustment of Purchase Price, Number of Shares or
Number of Warrants. The Purchase Price, the number of shares covered by each
Warrant and the number of Warrants outstanding are subject to adjustment from
time to time as provided in this Section 10.
(a) In the event the Company shall at any time after the date
of this Agreement (i) pay a dividend or make a distribution on the Common Stock
in shares of capital stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), the Purchase Price
and the number and kind of shares of
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capital stock issuable upon the exercise of a Warrant (as in effect immediately
prior to such action) shall be proportionately adjusted so that the holder of
any Warrant exercised after such action shall be entitled to receive the
aggregate number and kind of shares of capital stock which he would have owned
immediately following such action, if such Warrant had been exercised
immediately prior to such action. The adjustment shall become effective
immediately after the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision, combination
or reclassification. Such adjustment shall be made successively whenever any
event listed above shall occur and, in the event that such dividend or
distribution is not paid, such adjustment shall be readjusted retroactively.
(b) In case the Company shall fix a record date for the
issuance (without consideration) of rights, options or warrants to all holders
of Common Stock entitling them (for a period expiring within 60 calendar days
after such date of issue) to subscribe for or purchase Common Stock (or
securities convertible into or exchangeable or exercisable for Common Stock) at
a price per share of Common Stock (or having an initial conversion, exchange or
exercise price per share of Common Stock, if a security convertible into or
exchangeable or exercisable for Common Stock) less than the current market price
per share of Common Stock (as defined
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in Section 10(e)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on such record date plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so to be offered (or the aggregate offering
price for the convertible, exchangeable or exercisable securities so to be
offered) would purchase at such current market price and of which the
denominator shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock to be offered
for subscription or purchase (or into which the convertible, exchangeable or
exercisable securities so to be offered are initially convertible, exchangeable
or exercisable). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Warrant Agent. The aggregate offering price for the issuance of convertible,
exchangeable or exercisable securities shall be deemed to be the consideration
to be received by the Company for such securities plus the additional minimum
initial
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consideration, if any, to be received by the Company upon the conversion,
exchange or exercise thereof. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued and, to the extent, if issued, they expire without
being exercised, the Purchase Price shall be readjusted retroactively to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making
of a dividend or distribution (other than a cash dividend or distribution out of
retained earnings or earned surplus, except a special or extraordinary dividend
or distribution, and dividends or distributions of the stock of the Company
which are covered by Section 10(a)) to all holders of Common Stock (including
any distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation), of evidences of indebtedness or assets
(including cash, except in respect of dividends and distributions other than
special or extraordinary dividends or distributions) or rights or warrants
(excluding those referred to in Section 10(b)) to purchase debt securities,
assets or other securities of the Company, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a
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fraction of which the numerator shall be the current market price per share of
Common Stock (as defined in Section 10(e)) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Warrant Agent) of such distribution applicable to one share of Common Stock, and
of which the denominator shall be such current market price per share of Common
Stock. Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall be readjusted retroactively to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) In the event that the rights (the "Rights") outstanding
under the Rights Agreement, dated as of January 5, 1995, between the Company and
the Rights Agent, as such Agreement may be amended from time to time, or any
similar agreements or arrangements (the "Rights Agreement"), become entitled to
receive, with or without payment of an exercise price, shares of capital stock
or other securities of the Company or another Person, or cash or other assets,
by reason of any Person having become an Acquiring Person or a Stock Acquisition
Date or Distribution Date (as those terms are defined in the Rights Agreement)
having occurred, then upon the exercise thereafter of each Warrant, the
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Warrant holder shall also receive (upon payment, if any, of any amount the
holder of a Right would be required to pay upon any such exercise thereof) such
Common Stock, other securities, assets and cash as would be received by the
holder of Rights appertaining to that number of shares of Common Stock for which
the Warrant would have been exercisable immediately prior to the event referred
to above, provided that to the extent any adjustment has been made under any
other provision of this Section 10 or Section 12 with respect to the Rights, no
additional adjustment shall be made pursuant to this subsection.
(e) If the Company issues shares of Common Stock for a
consideration per share less than the current market price per share of Common
Stock on the date the Company fixes the offering price of such additional
shares, the Purchase Price to be in effect immediately after such issuance shall
be determined by multiplying the Purchase Price in effect immediately prior to
such issuance by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding on such date of issuance plus the number of shares
of Common Stock which the aggregate consideration received for the issuance of
such additional shares would purchase at such current market price and of which
the denominator shall be the number of shares of Commons Stock outstanding
immediately after the issuance of such additional shares. The adjustment shall
be
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made successively whenever any such issuance is made and shall become effective
immediately after such issuance.
(f) If the Company issues any securities convertible into or
exchangeable or exercisable for Common Stock (other than securities issued in
transactions described in the foregoing subsections of this Section 10) for a
consideration per share of Common Stock initially deliverable upon conversion of
or exchange or exercise for such securities (plus the consideration for the
security convertible, exchangeable or exercisable for such share of Common
Stock) less than the current market price per share on the date of issuance of
such securities, the Purchase Price to be in effect immediately after such
issuance shall be determined by multiplying the Purchase Price in effect
immediately prior to such issuance by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding on such date of issuance plus
the number of shares of Common Stock which the aggregate consideration received
for the issuance of such securities would purchase at such current market price
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such securities plus the
maximum number of shares of Common Stock deliverable upon conversion of or in
exercise or exchange for such securities at the initial conversion rate. The
aggregate consideration received for the issuance of such securities
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shall be deemed to be the consideration received by the Company for the issuance
of such securities plus the additional minimum initial consideration, if any, to
be received by the Company upon the conversion, exchange or exercise thereof.
The adjustment shall be made successively whenever any such issuance is made and
shall become effective immediately after such issuance.
(g) For the purpose of any computation pursuant to this
Section 10, the "current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily Closing Price per share of such
Common Stock for the 30 consecutive Trading Days immediately prior to such date.
If the Common Stock is not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Warrant Agent.
(h) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
Section 10(h) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
10 shall be made to the
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nearest cent or the nearest ten-thousandth of a share, as the case may be.
(i) In the event that at any time, as a result of an
adjustment made pursuant to this Section 10, the holder of any Warrant
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in this
Section 10 (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Warrant Agent), and the provisions of Sections 6, 8, 9 and 12 with respect to
the shares of Common Stock shall apply on like terms to any such other shares.
(j) Unless the Company shall have exercised its election as
provided in Section 10(k), upon each adjustment of the Purchase Price as a
result of the calculations made in this Section 10, each Warrant outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of shares
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of shares covered by a Warrant immediately prior to this
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adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(k) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Warrants, in
substitution for any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Warrant. The aggregate Warrants outstanding
immediately after such adjustment of the number of Warrants shall be exercisable
for the same number of shares of Common Stock for which the aggregate Warrants
were exercisable immediately prior to such adjustment of the number of Warrants.
Each Warrant held of record prior to such adjustment of the number of Warrants
shall become that number of Warrants (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect prior to adjustment of the
Purchase Price by the Purchase Price in effect after adjustment of the Purchase
Price. The Company shall notify the Warrant Agent and the record holders of
Warrants of its election to adjust the number of Warrants, indicating the record
date for the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter,
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but shall be at least 10 days later than the date of the public announcement.
Upon each adjustment of the number of Warrants pursuant to this subsection (i)
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Warrant Certificates on such record date Warrant
Certificates evidencing, subject to Section 13, the additional Warrants to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Warrant Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Warrant Certificates evidencing all the Warrants to which such
holders shall be entitled after such adjustment. Warrant Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Warrant
Certificates on the record date specified in the public announcement.
(l) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of
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shares which were expressed upon the initial Warrant Certificates issued
hereunder.
(m) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may be necessary in order that the Company may validly
issue fully paid and nonassessable shares of such Common Stock at such adjusted
Purchase Price.
(n) In any case in which this Section 10 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Warrant exercised after such record date
of the shares of Common Stock and other capital stock of the Company, if any,
issuable upon such exercise over and above the shares of Common Stock and other
capital stock of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(o) Anything in this Section 10 to the contrary
notwithstanding, the Company shall be entitled to make such
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reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 10, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any event treated for federal
income tax purposes as a distribution of stock or stock rights shall not be
taxable to the recipients; provided, however, that any reduction of the Purchase
Price pursuant to this Section 10(o), other than a reduction which the Company
has irrevocably committed will be in effect for so long as any Warrants are
outstanding, does not change or adjust the Purchase Price otherwise in effect
for purposes of subsections (a)-(f) of this Section 10.
(p) If any event shall occur as to which the provisions of
this Section 10 are not strictly applicable but the failure to make any
adjustment would in the good faith judgment of the Company's Board of Directors
adversely affect the purchase rights represented by the Warrants in accordance
with the essential intent and principles of this Section 10, then, in each such
case, the Company shall appoint an investment banking firm of recognized
national standing, or any other financial expert that does not (or whose
directors, officers, employees, affiliates or stockholders do not) have a direct
or material indirect financial interest in the Company or any of its
subsidiaries, who has not been, and, at the time it is called upon to give
independent financial advice to the
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Company, is not (and none of its directors, officers, employees, affiliates or
stockholders are) a director or officer of the Company or any of its
subsidiaries, which shall give their opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in Section
10, necessary to preserve, without dilution or accretion, the rights represented
by the Warrants. Upon receipt of such opinion, the Company will promptly mail a
copy thereof to the holders of the Warrants and shall make the adjustments
described therein.
(q) The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the Warrants against
dilution or other impairment.
Section 11. Certification of Adjusted Purchase Price or Number
of Shares. Whenever the Purchase Price or the number of shares of Common Stock
issuable upon the exercise of each Warrant is adjusted as provided in Section 10
or 12, the Company shall (a) promptly prepare a certificate signed by an
executive officer of the Company
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and one of its accounting officers setting forth the Purchase Price as so
adjusted and/or the number of shares of Common Stock issuable upon exercise of
each Warrant as so adjusted, and a brief statement of the facts accounting for
such adjustment and setting forth a computation by which such adjustment was
made, (b) promptly file with the Warrant Agent and with each transfer agent for
the Common Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Warrant Certificate in accordance with Section 24.
Section 12. Consolidation, Merger or Sale or Transfer of
Assets. In case of any consolidation or merger of the Company with another
corporation or in case of any sale, lease or conveyance to another Person of all
or substantially all of the assets or property of the Company, the Company or
such successor or purchasing corporation, as the case may be, shall execute with
the Warrant Agent an agreement that each holder of a Warrant shall have the
right, upon payment of the Purchase Price in effect immediately prior to such
action, to purchase upon exercise of each Warrant the kind and amount of shares
or other securities or property that he would have owned or have been entitled
to receive after the happening of such action, had such Warrant been exercised
immediately prior to such action. Notwithstanding the foregoing, in the case of
any merger or other transaction in which the publicly held
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Common Stock shall be converted into the right to receive a consideration
consisting solely of cash, each holder of a Warrant, without having to take any
other action than the surrendering of such Warrant to the Company, shall receive
in full and complete satisfaction of the rights appertaining to the Warrants an
amount equal to the amount (if any) by which the price per share payable to, or
which would be received by, any public holder of Common Stock in connection with
such transaction exceeds the Purchase Price in effect immediately prior to such
merger or other transaction. The Company shall mail by first-class mail, postage
prepaid, to each holder of a Warrant, notice of the execution of any such
agreement referred to in the first sentence of this Section 12. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 10 in relation to any
securities or property (including cash) thereafter deliverable upon the exercise
of the Warrants. The Warrant Agent shall be under no responsibility to determine
the correctness of any provisions contained in any such agreement relating
either to the kind or amount of shares or other securities or property
receivable upon exercise of Warrants or with respect to the method employed and
provided therein for any adjustments and shall be entitled to rely upon the
provisions contained in any such agreement. The provisions of this Section 12
shall similarly apply to
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successive mergers or consolidations or sales or other transfers.
Section 13. Fractional Warrants and Fractional Shares. (a) The
Company shall not be required to issue fractions of Warrants or to distribute
Warrant Certificates which evidence fractional Warrants, except at the request
of a Warrant holder in the event the Company makes an adjustment in the number
of Warrants pursuant to Section 10(k) which results in fractional Warrant
interests. In lieu of such fractional Warrants, there shall be paid to the
registered holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Warrant. For the purposes
of this Section 13(a), the current market value of a whole Warrant shall be the
closing price of the Warrant for the Trading Day immediately prior to the date
on which such fractional Warrant would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the NYSE or, if the Warrants are not listed or admitted to trading on
NYSE, as reported in the principal consolidated transaction
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reporting system with respect to securities listed on the principal national
securities exchange on which the Warrants are listed or admitted to trading or,
if the Warrants are not listed or admitted to trading on any national securities
exchange, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ. If on any such date the Warrants
are not quoted by any such organization, the fair value of the Warrants on such
date as determined in good faith by the Board of Directors of the Company shall
be used.
(b) The Company shall not be required to issue fractions of
shares upon exercise of the Warrants or to distribute certificates which
evidence fractional shares. In lieu of fractional shares, there shall be paid to
the registered holders of Warrant Certificates at the time such Warrant
Certificates are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of a share of Common Stock. For
purposes of this Section 13(b), the current market value of a share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 10(e)) for the Trading Day
immediately prior to the date of such exercise.
(c) Except as provided in Section 13(a), the holder of a
Warrant by the acceptance of the Warrant
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expressly waives his right to receive any fractional Warrant or any fractional
share upon exercise of a Warrant.
Section 14. Right of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
consent of the Warrant Agent or of the holder of any other Warrant Certificate,
may, on his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his rights relating to the Warrants, including his
right to exercise the Warrants as provided in such Warrant Certificate and in
this Agreement.
Section 15. Agreement of Warrant Certificate Holders. Every
holder of a Warrant Certificate by accepting the same consents and agrees with
the Company and the Warrant Agent and with every other holder of a Warrant
Certificate that:
(a) the Warrant Certificates are transferable only on the
registry books of the Warrant Agent if surrendered at the principal office of
the Warrant Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(b) the Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the absolute owner
thereof and of the
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Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the Company or the
Warrant Agent) for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
Section 16. Warrant Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Warrant Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise or conversion of the Warrants represented thereby, nor shall anything
contained herein or in any Warrant Certificate be construed to confer upon the
holder of any Warrant Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 24), or to receive
dividends or subscription rights, or otherwise, until the Warrant or Warrants
evidenced by such Warrant Certificate shall have been exercised in accordance
with the provisions hereof.
Section 17. Concerning the Warrant Agent. The Company agrees
to pay to the Warrant Agent reasonable compensation for all services rendered by
it hereunder and,
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from time to time, on demand of the Warrant Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Warrant Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Warrant
Agent, for anything done or omitted by the Warrant Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Warrant Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 18. Merger or Consolidation or Change of Name of
Warrant Agent. Any Person into which the Warrant Agent or any successor Warrant
Agent may be merged or with
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which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Warrant Agent or any successor Warrant Agent shall be
a party, or any Person succeeding to the corporate trust business of the Warrant
Agent or any successor Warrant Agent, shall be the successor to the Warrant
Agent under this Agreement 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 20. In case at the time such successor Warrant Agent shall
succeed to the agency created by this Agreement any of the Warrant Certificates
shall have been countersigned but not delivered, any such successor Warrant
Agent may adopt the countersignature of the predecessor Warrant Agent and
deliver such Warrant Certificates so countersigned; and in case at that time any
of the Warrant Certificates shall not have been countersigned, any successor
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor Warrant Agent; and
in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the
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Warrant Agent may adopt the countersignature under its prior name and deliver
Warrant Certificates so countersigned; 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
provided in the Warrant Certificates and in this Agreement.
Section 19. Duties of 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
Warrant Certificates, by their acceptance thereof, shall be bound:
(a) The Warrant Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Warrant
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclu-
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sively proved and established by a certificate signed by the Chairman,
President, Chief Executive Officer or any Vice President of the Company
and by the Treasurer or any Assistant Treasurer or the Secretary of the
Company and delivered to the Warrant Agent; and such certificate shall
be full authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate. The Warrant Agent shall be entitled to
rely on any certificate, notice or other document reasonably believed
by it to be genuine and correct and to have been signed, given or sent
by the proper Person or Persons.
(c) The Warrant Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Warrant Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Warrant Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Warrant Agent shall not be under any
responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
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74
the due execution hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement
or in any Warrant Certificate; nor shall it be responsible for the
adjustment of the Purchase Price or the making of any change in the
number of shares of Common Stock required under the provisions of
Section 10 or 12 or responsible for the manner, method or amount of any
such change or the ascertaining of the existence of facts that would
require any such adjustment or change (except with respect to the
exercise of Warrants evidenced by Warrant Certificates after actual
notice of any adjustment of the Purchase Price); nor shall it by any
act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock to be
issued pursuant to this Agreement or any Warrant Certificate or as to
whether any shares of Common Stock will, when issued, be duly
authorized, validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances
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75
as may reasonably be required by the Warrant Agent for the carrying out
or performing by the Warrant Agent of the provisions of this Agreement.
(g) the Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman, President, Chief Executive Officer, any of
the Vice Presidents or the Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such
officer.
(h) The Warrant Agent and any shareholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Warrant Agent may exercise any of the rights or powers
hereby vested in it or perform any
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76
duty hereunder either itself or by or through its attorney or agents,
and the Warrant Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
Section 20. Change of Warrant Agent. The Warrant Agent may
resign and be discharged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer agent of the Common
Stock by registered or certified mail, and to the holders of the Warrant
Certificates by first-class mail. The Company may remove the Warrant Agent or
any successor Warrant Agent upon 30 days' notice in writing, mailed to the
Warrant Agent or successor Warrant Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Warrant Certificates by first-class mail. If the Warrant Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Warrant Agent or elect by notice to the
holders of the Warrant Certificates by first-class mail to act itself as the
Warrant Agent until by like notice it elects to appoint a new Warrant Agent. If
the Company shall fail to
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77
make such appointment or election within a period of 30 days after such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Warrant Agent or by the holder of a Warrant
Certificate (who shall, with such notice, submit his Warrant Certificate for
inspection by the Company), then the registered holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Warrant Agent. Any successor Warrant Agent (other than the Company),
whether appointed by the Company or by such a court, shall be a Person organized
and doing business under the laws of the United States or of a state thereof, in
good standing, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Warrant Agent a
combined capital and surplus of at least $50,000,000. After appointment or
election, the successor Warrant Agent or the Company, as the case may be, shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
predecessor Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such
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78
appointment or election the Company shall file notice thereof in writing with
the predecessor Warrant Agent and each transfer agent of the Common Stock, and
mail a notice thereof in writing to the registered holders of the Warrant
Certificates. Failure to give any notice provided for in this Section 20,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent or the election by the Company to serve as the Warrant Agent, as
the case may be.
Section 21. Issuance of New Warrant Certificates.
Notwithstanding any of the provisions of this Agreement or of the Warrants to
the contrary, the Company may, at its option, issue new Warrant Certificates
evidencing Warrants in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the several Warrant Certificates made in accordance with the provisions of
this Agreement.
Section 22. Purchase of Warrants by the Company. The Company
shall have the right, except as limited by applicable law or other agreements,
to purchase or otherwise acquire Warrants at such time, in such manner and for
such consideration as may be agreed to by the Company and any selling Warrant
holder.
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79
Section 23. Notice of Proposed Actions. In case the Company
shall propose (a) to take any action which may require an adjustment in the
Purchase Price or other terms of the Warrants pursuant to Section 10 or Section
12 of this Agreement, or (b) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Warrant, in accordance with Section 24, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (a) or
(b) above at least twenty days prior to the record date for determining holders
of the Common Stock for purposes of such action, and in the case of any such
other action, at least twenty days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of Common
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 23 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action. Unless
specifically required by Section 10, the Purchase Price, the
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80
number of shares covered by each Warrant and the number of Warrants outstanding
shall not be subject to adjustment as a result of the Company being required to
give notice pursuant to this Section 23.
Section 24. Notices. Notices or demands authorized by this
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant Certificate to or on the Company shall be in writing and shall be deemed
given or made when delivered or on the third day following the date sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Warrant Agent) or on the date sent by facsimile transmission
(provided that such facsimile transmission is promptly confirmed by telephone
confirmation thereof) as follows:
American Standard Companies Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 20, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be in writing and shall be deemed
given or made when delivered or on the third date following the date sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company with notice to each Warrant holder)
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81
or on the date sent by facsimile transmission (provided that such facsimile
transmission is promptly confirmed by telephone confirmation thereof) as
follows:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Stock Transfer
Notices or demands authorized by this Agreement to be given or made by the
Company or the Warrant Agent to the holder of any Warrant Certificate shall be
in writing and shall be deemed given or made on the third day following the date
sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company or, if the
Warrant holder has provided the Company with a facsimile transmission address,
on the date sent by facsimile transmission (provided that such facsimile
transmission is promptly confirmed by telephone confirmation thereof).
Section 25. Supplements and Amendments. (a) The Company and
the Warrant Agent may from time to time supplement or amend this Agreement
without the approval of any holders of Warrant Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, or to make any
other provisions with regard to matters or questions arising hereunder which the
Company and
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82
the Warrant Agent may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Warrant Certificates.
(b) With the consent of the holders of Warrants exercisable
for not less than a majority of the Shares (as adjusted from time to time)
issuable upon exercise of all then outstanding Warrants, the Company and the
Warrant Agent may modify this Agreement for the purpose of adding any provision
to or changing in any manner or eliminating any of the provisions of this
Warrant Agreement or modifying in any manner the rights of the holders of the
Warrant Certificates; provided, however, that no modification of the terms
(including but not limited to the adjustments described in Section 10) upon
which the Warrants are exercisable or reducing the percentage required for
consent to modification of this Agreement may be made without the consent of the
holder of each outstanding Warrant affected thereby.
Section 26. Successors. All covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 27. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give any Person other than the Company, the
Warrant Agent and the registered
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holders of the Warrant Certificates any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the registered holders
of the Warrant Certificates.
Section 28. Governing Law; Submission to Jurisdiction;
Selection of Forum. THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ITS LAWS GOVERNING CONFLICTS OF LAW. Each
party hereto agrees that it shall bring any action or proceeding in respect of
any claim arising out of or related to this Agreement or the transactions
contained in or contemplated by this Agreement, whether in tort or contract or
at law or in equity, exclusively in the United States District Court for the
Southern District of New York or the Supreme Court of the state of New York for
the county of New York, and solely in connection with claims arising under this
Agreement or the transactions contained in or contemplated by this Agreement (i)
irrevocably submits to the exclusive jurisdiction of such courts, (ii) waives
any objection to laying venue in any such action or proceeding in such courts,
(iii) waives any objection that such courts are an inconvenient forum or do not
have jurisdiction over any party hereto and (iv) agrees that service of process
upon such party in any such
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84
action or proceeding shall be effective if notice is given in accordance with
Section 24 of this Agreement.
Section 29. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 30. Captions. The caption of the sections of this
Agreement have been inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
AMERICAN STANDARD COMPANIES INC.
By
-----------------------------------
Title:
CITIBANK, N.A., as
Warrant Agent
By
-----------------------------------
Title:
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Exhibit A
To Warrant Agreement
[Form of Warrant Certificate]
Certificate No. _______________________________________________ Warrants
NOT EXERCISABLE AFTER _______ __, 2002
Warrant Certificate
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND SUCH STATE LAWS. THE COMPANY MAY REQUIRE AS A CONDITION TO
THE TRANSFER OF THIS WARRANT AN OPINION FROM COUNSEL FOR THE
WARRANT HOLDER, SATISFACTORY TO THE COMPANY, THAT THE TRANSFER
MAY BE MADE WITHOUT PRIOR REGISTRATION OF THE WARRANT UNDER
SUCH ACT OR LAWS.
AMERICAN STANDARD COMPANIES INC.
This certifies that ________________________, or registered
assigns, is the registered owner of the number of Warrants set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Warrant Agreement dated as of _______ __, 1997 (the "Warrant
Agreement") between American Standard Companies Inc., a Delaware corporation
(the "Company"), and Citibank, N.A., a national banking association (the
"Warrant Agent"),
86
from and after the time that it is no longer possible for any payment to be made
to ASI Partners pursuant to Section 3.2 of the Stock Disposition Agreement, to
purchase from the Company at any time after _______ __, 1997 and prior to 5:00
P.M. (New York City time) on ________ __, 2002 at the principal office of the
Warrant Agent, or its successors as Warrant Agent, in New York, New York,
___________ fully paid and nonassessable shares of the Common Stock, par value
$.01 per share ("Shares" or "Common Stock"), of the Company, at a purchase price
of $_______ (the "Purchase Price") upon presentation and surrender of this
Warrant Certificate with the Form of Election to Purchase duly executed,
together with payment of the Purchase Price in immediately available funds for
each share of Common Stock as to which the Warrants are exercised, at or prior
to the Close of Business on the fifth anniversary of the Closing Date or, if
such date is not a Business Day, the next Business Day thereafter (the
"Expiration Date"); provided, however, that the Company, in its sole discretion,
may instead elect (a "Spread Value Election") to pay, either in cash or Shares
(valued at Market Value, as defined below), to such holder against surrender of
the Warrants the product of (i) the number of shares of Common Stock as to which
the Warrants are exercised times (ii) the amount of the excess, if any, of (A)
the average of the Closing Price per share of the Common Stock for the five
Trading Days prior to the date the
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87
Warrants are exercised or surrendered (the "Market Value") over (B) the Purchase
Price, in which case the registered holder will not be required to submit such
cash payment for the Purchase Price. The Company shall, at the request by any
Warrant holder received by the Company five Business Days in advance of a
proposed exercise of a Warrant, advise such holder at least one Business Day
prior to the proposed exercise date whether the Company elects in its discretion
to pay for the surrender of the Warrant, without payment by the holder, in
either cash or Shares. The Company further agrees that, upon exercise of any
Warrant by any Original Warrant Holder, the Company will exercise its Spread
Value Election to make such payment in cash or Shares for surrender of Warrants
by such Original Warrant Holder. The Company may also by notice to the Warrant
Agent make a Spread Value Election in advance, specifying that payment by it
will be made in cash, in Shares or reserving its right to elect either in its
discretion from time to time, in which case such Spread Value Election shall be
binding in accordance with its terms on the Company and the Warrant holders for
all exercises of Warrants subsequent to such notice. The Company shall give
prompt notice of such election to the Warrant holders. In the event that a
Transaction occurs after the date a payment by reason thereof would otherwise be
due, any Warrant holder exercising a Warrant may require the Company to exercise
its
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88
Spread Value Election for cash, and the Company shall be obligated to do so.
Except as provided in the immediately preceding sentence, whenever the Company
exercises a Spread Value Election upon exercise of a Warrant, it shall within
three Business Days of the date of its exercise of such Spread Value Election,
(i) make its choice of payment in cash or the issuance of shares of ASCI Common
Stock pursuant to the Spread Value Election and (ii) make to the Warrant holder
the cash payment or delivery of the shares, but any shares of ASCI Common Stock
delivered pursuant to such Spread Value Election shall be deemed to have been
issued and delivered to the Warrant holder and to be outstanding as of the date
provided in Section 9 of this Agreement notwithstanding such deferred delivery
by the Company.
All Warrants shall expire and be of no further force and
effect upon the occurrence of any Transaction which will require a payment to
ASI Partners by the Company pursuant to Section 3.2 of the Stock Disposition
Agreement, provided payment is made as required by such Section 3.2. The Company
shall give prompt notice to the Warrant Agent and the Warrant holders of such
expiration.
The number of Warrants evidenced by this Warrant Certificate
(and the number of shares which may be purchased upon exercise thereof) set
forth above and the Purchase Price per share set forth above are the number and
Purchase Price as of ______ __, 1997, based on the shares of Common
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89
Stock of the Company as constituted at such date. As provided in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock which may
be purchased upon the exercise of the Warrants evidenced by this Warrant
Certificate are subject to modification and adjustment upon the occurrence of
certain events.
This Warrant Certificate is subject to all of the terms,
provisions and conditions of the Warrant Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Warrant Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Warrant Agent, the Company and the holders of the Warrant
Certificates. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent.
This Warrant Certificate, with or without other Warrant
Certificates, upon surrender at the principal office of the Warrant Agent, may
be exchanged for another Warrant Certificate or Warrant Certificates of like
tenor and date evidencing Warrants entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Warrants evidenced by the
Warrant Certificate or Warrant Certificates surrendered shall have entitled such
holder to purchase. If this Warrant Certificate shall be exercised in part, the
holder hereof shall be entitled to receive upon surrender
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90
hereof another Warrant Certificate or Warrant Certificates for the number of
whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the
exercise of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to
vote or receive dividends or to be deemed for any purpose the holder of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Warrant Agreement), or to receive dividends or subscription
rights, or otherwise, until the Warrant or Warrants evidenced by this Warrant
Certificate shall have been exercised as provided in the Warrant Agreement.
Terms used in this Warrant Certificate have the same meaning
as they do in the Warrant Agreement.
THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
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91
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS LAWS
GOVERNING CONFLICTS OF LAW.
This Warrant Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Warrant Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______ __, 1997.
AMERICAN STANDARD COMPANIES INC.
By
------------------------------
Title:
ATTEST:
-----------------------
Secretary
Countersigned:
CITIBANK, N.A.
By
----------------------------
Authorized signature
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92
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Warrant Certificate.)
To Citibank, N.A., as Warrant Agent
The undersigned hereby irrevocably elects to exercise
__________________ Warrants represented by this Warrant Certificate to purchase
the shares of Common Stock issuable upon the exercise of such Warrants and
requests that Certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
--------------------
----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate)
Signature Guaranteed: