Exhibit 11
----------
[Five-Year Warrant Agreement]
TiVo Inc.
and
The Bank of New York
as Warrant Agent
WARRANT AGREEMENT
DATED as of August 28, 2001
TABLE OF CONTENTS
Page Number
SECTION 1. Definitions.........................................................................................1
SECTION 2. Appointment of Warrant Agent........................................................................4
SECTION 3. Form of Warrant Certificates........................................................................4
SECTION 4. Execution of Warrant Certificates...................................................................4
SECTION 5. Registration, Countersignature and Issuance of Temporary Warrant Certificates.......................5
SECTION 6. Registration of Transfers and Exchanges.............................................................6
SECTION 7. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates.................................13
SECTION 8. Offices for Exercise, Etc..........................................................................13
SECTION 9. Duration of Warrants; Early Termination of Warrants................................................14
SECTION 10. Exercise, Exercise Price, Settlement and Delivery..................................................14
SECTION 11. Cancellation of Warrant Certificates...............................................................17
SECTION 12. Adjustment of Exercise Price and Number of Shares Issuable.........................................17
SECTION 13. Effect of Reclassification, Consolidation, Merger or Sale..........................................26
SECTION 14. Taxes on Shares Issued.............................................................................27
SECTION 15. Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock............................27
SECTION 16. Fractional Warrants and Fractional Shares..........................................................28
SECTION 17. Notice to Warrantholders Prior to Certain Actions..................................................28
SECTION 18. Merger, Consolidation or Change of Name of Warrant Agent...........................................29
SECTION 19. Warrant Agent......................................................................................29
SECTION 20. Disposition of Proceeds of Exercise of Warrants....................................................31
SECTION 21. Change of Warrant Agent............................................................................31
SECTION 22. Notices to Company and Warrant Agent...............................................................31
SECTION 23. Supplements and Amendments.........................................................................32
SECTION 24. Successors.........................................................................................32
SECTION 25. Termination........................................................................................33
SECTION 26. Governing Law......................................................................................33
SECTION 27. Benefits of This Agreement.........................................................................33
SECTION 28. Counterparts.......................................................................................33
Exhibit A Form of Warrant.........................................................................................A-1
Exhibit B Form of Transfer Letter of Representations..............................................................B-1
WARRANT AGREEMENT ("Agreement") dated as of August 28, 2001, between
TiVo Inc., a Delaware corporation (together with any successor thereto, the
"Company"), and The Bank of New York, a New York banking corporation, not in
its individual capacity but solely as warrant agent (together with any
successor warrant agent, the "Warrant Agent").
WHEREAS, the Company has entered into purchase or acquisition
agreements with certain purchasers or acquirors (the "Purchasers"), in which
the Company has agreed to issue and/or sell to the Purchasers (i) an aggregate
principal amount of $51,750,000 of its 7% Convertible Senior Notes due 2006
(the "Notes") to be issued under an Indenture dated as of August 28, 2001
between the Company and The Bank of New York, a New York banking corporation,
as trustee (in such capacity, the "Trustee"), (ii) warrants (each a "Warrant,"
and collectively the "Warrants", and the certificates evidencing the Warrants
hereinafter referred to as the "Warrant Certificates") to purchase 2,682,600
shares of the Company's common stock, par value $.001 per share (the "Common
Stock"), (iii) and 4,064,542 units, each consisting of (a) one warrant to
purchase one share of Common Stock and (b) one warrant to purchase 0.33 of one
share of Common Stock.
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company to assist the Company in connection with the issuance, exchange,
cancellation, replacement and exercise of the Warrants, and this Agreement
sets forth, among other things, the terms and conditions on which the Warrants
may be issued, exchanged, cancelled, replaced and exercised;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1 Definitions. The terms defined in this Section 1 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Agreement shall have the respective meanings
specified in this Section 1. The words "herein," "hereof," "hereunder," and
words of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision. The terms defined in this Section
include the plural as well as the singular.
Affiliate: The term "Affiliate" of any specified person shall mean
any other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For the purposes
of this definition, "control," when used with respect to any specified person
means the power to direct or cause the direction of the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
Board of Directors: The term "Board of Directors" shall mean the
Board of Directors of the Company or a committee of such Board duly authorized
to act for it hereunder.
Board Resolution: The term "Board Resolution" means a copy of a
resolution certified by the Secretary or any Assistant Secretary of the
Company to have been duly adopted by the Board of Directors, or duly
authorized committee thereof (to the extent permitted by applicable law), and
to be in full force and effect on the date of such certification, and
delivered to the Warrant Agent.
Business Day: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Office
is located are authorized or obligated by law or executive order to close or
be closed.
Cashless Exercise. The term "Cashless Exercise" shall have the
meaning specified in Section 10(b).
Cashless Exercise Ratio: The term "Cashless Exercise Ratio" shall
have the meaning specified in Section 10(b).
Close of business: The term "close of business" means 5 p.m. (New
York City time).
Corporate Office: The term "Corporate Office," or other similar term,
shall mean the office of the Warrant Agent maintained for the purpose of
exchanging, transferring or exercising the Warrants, which office is, at the
date as of which this Agreement is dated, located at 000 Xxxxxxx Xxxxxx, Xxxxx
00X, Xxx Xxxx, N.Y. 10286, Attention: Corporate Trust Administration.
Exchange Act: The term "Exchange Act" means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Exercise Date: The term "Exercise Date" shall have the meaning
specified in Section 10(c).
Exercise Form: The term "Exercise Form" shall have the meaning
specified in Section 10(a).
Exercise Price: The term "Exercise Price" shall mean the exercise
price as specified in the form of the Warrant Certificate (herein called the
"Exercise Price"), attached as Exhibit A hereto, subject to adjustment from
time to time upon the occurrence of the events enumerated in Section 12.
Exercise Price Per Share: The term "Exercise Price Per Share" shall
have the meaning specified in Section 10(b).
Expiration Time: The term "Expiration Time" shall have the meaning
specified in Section 12(f).
Individual Accredited Investor: The term "Individual Accredited
Investor" shall mean an individual "accredited investor" as defined in Rule
501(a)(5) or (6) of Regulation D under the Securities Act.
Institutional Accredited Investor: The term "Institutional Accredited
Investor" shall mean an institutional "accredited investor" as such term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
Officer's Certificate: The term "Officer's Certificate", when used
with respect to the Company, shall mean a certificate signed by one of the
President, the Chief Executive Officer, Chief Financial Officer, Executive or
Senior Vice President or any Vice President (whether or not designated by a
number or numbers or word added before or after the title "Vice President"),
that is delivered to the Warrant Agent.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company, which is delivered to the Warrant Agent.
Person: The term "person" shall mean an individual, a corporation, a
limited liability company, an association, a partnership, an individual, a
joint venture, a joint stock company, a trust, an unincorporated organization
or a government or an agency or a political subdivision thereof.
Registration Rights Agreement: The term "Registration Rights
Agreement" means that certain Registration Rights Agreement, dated as of
August 28, 2001, between the Company and the Purchasers, as such agreement may
be amended from time to time.
Restricted Securities: The term "Restricted Securities" has the
meaning specified in Section 6(c).
Rule 144A: The term "Rule 144A" shall mean Rule 144A as promulgated
under the Securities Act.
Securities Act: The term "Securities Act" means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
Subsidiary: The term "Subsidiary" means a corporation more than 50%
of the outstanding voting stock of which is owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
Trading Day: The term "Trading Day" has the meaning specified in
Section 12(h)(v).
Warrant Exercise Office. The term "Warrant Exercise Office" shall
have the meaning specified in Section 10(a).
Warrantholder or holder: The terms "Warrantholder" or "holder" as
applied to any Warrant, or other similar terms (but excluding the term
"beneficial holder"), shall mean any person in whose name at the time a
particular Warrant is registered on the Warrant register.
Warrant register: The term "Warrant register" shall mean the register
maintained in the Corporate Office and in any other office or agency of the
Company as designated herein, in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of the
Warrants and transfers of Warrants.
SECTION 2. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 3. Form of Warrant Certificates. The Warrant Certificates may
have such letters, numbers or other marks of identification and such
notations, legends and endorsements as the officers executing the same may
approve (execution thereof to be conclusive evidence of such approval) and as
are not inconsistent with the provisions of this 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 securities exchange or automated
quotation system on which the Warrants may be listed or designated for
issuance, or to conform to usage.
The Warrants shall be substantially in the form set forth in Exhibit
A, which exhibit is hereby incorporated in and expressly made a part of this
Agreement. Each Warrant Certificate shall represent such of the outstanding
Warrants as shall be specified thereon.
Warrants will be issued in registered form as definitive Warrant
Certificates.
Each Warrant shall evidence the right, subject to the provisions of
this Agreement and of the applicable Warrant Certificate, to purchase one
share of Common Stock, subject to adjustment pursuant to the provisions of
Section 12 hereof.
SECTION 4. Execution of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be dated as of the date of
countersignature thereof by the Warrant Agent pursuant to Section 5 either
upon initial issuance or upon exchange, substitution or transfer, shall be
signed manually by, or bear the facsimile signature of, the Chairman of the
Board or the Chief Executive Officer or the President or Executive or Senior
Vice President or any Vice President (whether or not designated by a number or
number of words added before or after the title "Vice President") of the
Company, and shall be attested by the manual or facsimile signature of the
Chief Financial Officer or Treasurer or Assistant Treasurer or Secretary or
any Assistant Secretary of the Company.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent
pursuant to Section 5, or disposed of by the Company, such Warrant
Certificates nevertheless may be countersigned and delivered or disposed of as
though such person 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.
SECTION 5. Registration, Countersignature and Issuance of Temporary
Warrant Certificates.
(a) Registration and Countersignature. Warrant Certificates
distributed as provided for herein shall be registered in the names of the
record holders of the Warrant Certificates to whom they are to be distributed.
The Company and the Warrant Agent may deem and treat the registered
holder of a Warrant Certificate as the absolute owner thereof (notwithstanding
any notation of ownership or other writing thereon made by anyone), for the
purpose of any exercise or conversion thereof and any distribution to the
holder thereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. (b)
Countersignature and Delivery. Subject to the second paragraph of Section 4,
Warrant Certificates shall be countersigned by manual signature and dated the
date of countersignature by the Warrant Agent and shall not be valid for any
purpose unless so countersigned and dated. The Warrant Certificates shall be
numbered and shall be registered.
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed manually by, or bear the facsimile
signature of, the Chairman of the Board, the Chief Executive Officer, the
President , any Executive or Senior Vice President , or any Vice President
(whether or not designated by a number or number of words added before or
after the title "Vice President") and attested by the manual or facsimile
signature of the Chief Financial Officer, Treasurer, Assistant Treasurer,
Secretary or any Assistant Secretary of the Company, and shall specify the
number of Warrants to be countersigned, the date of such Warrants and such
other information as is necessary or as the Warrant Agent may reasonably
request. Without any further action by the Company, the Warrant Agent is
authorized, upon receipt from the Company at any time and from time to time of
the Warrant Certificates, duly executed as provided in Section 4 hereof, to
countersign the Warrant Certificates and make them available for delivery.
Such countersignature shall be by a duly authorized signatory of the Warrant
Agent (although it shall not be necessary for the same signatory to sign all
Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
countersigned any of the Warrant Certificates shall cease to be such
authorized signatory before the Warrant Certificate shall be disposed of by
the Company, such Warrant Certificate nevertheless may be delivered or
disposed of as though the person who countersigned such Warrant Certificate
had not ceased to be such authorized signatory of the Warrant Agent; and any
Warrant Certificate may be countersigned on behalf of the Warrant Agent by
such persons as, at the actual time of countersignature of such Warrant
Certificates, shall be the duly authorized signatories of the Warrant Agent,
although at the time of the execution and delivery of this Agreement any such
person is not such an authorized signatory.
(c) Temporary Warrant Certificates. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and the Warrant
Agent shall, upon written request of the Company, countersign and make
available for delivery, temporary Warrant Certificates, which are printed,
lithographed, typewritten or otherwise produced, substantially of the tenor of
the definitive Warrant Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determine, as evidenced
by their execution of such Warrant Certificates.
The Company will promptly execute and deliver to the Warrant Agent
definitive Warrant Certificates. After the preparation of definitive Warrant
Certificates, the temporary Warrant Certificates shall be exchangeable for
definitive Warrant Certificates upon surrender of the temporary Warrant
Certificates at any office or agency maintained by the Company for that
purpose pursuant to Section 8 hereof. Subject to the provisions of Section
6(h) hereof, such exchange shall be without charge to the holder. Upon
surrender for cancellation of any one or more temporary Warrant Certificates,
the Company shall execute, and the Warrant Agent shall countersign and deliver
in exchange therefor, one or more definitive Warrant Certificates representing
in the aggregate a like number of Warrants. Until so exchanged, the holder of
a temporary Warrant Certificate shall in all respects be entitled to the same
benefits under this Agreement as a holder of a definitive Warrant Certificate.
SECTION 6. Registration of Transfers and Exchanges.
(a) The Warrant Agent shall from time to time register in the Warrant
register the transfer of any outstanding Warrant Certificates, upon surrender
thereof accompanied by a written instrument of transfer in the form of the
assignment appearing at the end of the form of the Warrant Certificate
attached as Exhibit A hereto, duly executed by the registered holder or
holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney. Such Warrant register shall be in written form or in
any form capable of being converted into written form within a reasonable
period of time. The Warrant Agent is hereby appointed "Warrant registrar" for
the purpose of registering Warrants and transfers of Warrants as herein
provided. Upon any such registration of transfer, a new Warrant Certificate of
like tenor and representing in the aggregate a like number of Warrants shall
be issued to the transferee and the surrendered Warrant Certificate shall be
cancelled by the Warrant Agent.
Warrant Certificates may be exchanged at the option of the holders
thereof, when surrendered to the Warrant Agent at its Corporate Office, for
another Warrant Certificate or other Warrant Certificates of like tenor and
representing in the aggregate a like number of Warrants. Warrant Certificates
surrendered for exchange, transfer, exercise or conversion shall be cancelled
by the Warrant Agent. Warrant Certificates cancelled as provided in this
Section 6 shall then be disposed of by the Warrant Agent in accordance with
its customary procedures.
Neither the Company nor the Warrant Agent shall be required to
exchange or register a transfer of any of the Warrants surrendered for
exercise or, if a portion of any Warrant is surrendered for exercise, such
portion thereof surrendered for exercise.
The Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of Section 5 and this Section 6, the new Warrant
Certificates required pursuant to the provisions of this Section, and for the
purpose of any distribution of Warrant Certificates contemplated herein.
(b) Prior and as a condition to any sale or transfer of a Warrant or
the Common Stock issued upon exercise thereof that bears the restrictive
legend set forth in Section 6(c) or Section 6(d), respectively (other than to
a "Qualified Institutional Buyer" within the meaning of Rule 144A under the
Securities Act or pursuant to a registration statement that has been declared
effective under the Securities Act), such transferee shall, unless the Company
otherwise agrees in writing and so notifies the Warrant Agent, furnish to the
Company and the Warrant Agent a signed letter containing representations and
agreements relating to restrictions on transfer substantially in the form set
forth in Exhibit B to this Agreement and an opinion of counsel if the Company
so requests (other than with respect to a transfer pursuant to an effective
registration statement under the Securities Act) and such certificates and
other information as the Company and/or the Warrant Agent reasonably may
require to confirm that any such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
(c) Every Warrant that bears or is required under this Section 6(c)
to bear the legend set forth in this Section 6(c) (together with any Common
Stock issued upon exercise of the Warrants and required to bear the legend set
forth in Section 6(d), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 6(c)
(including the legend set forth below), unless such restrictions on transfer
shall be waived by written consent of the Company, and the holder of each such
Restricted Security, by such holder's acceptance thereof, agrees to be bound
by all such restrictions on transfer. As used in Sections 6(c) and 6(d), the
term "transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.
Until two (2) years after the original issuance date of any Warrant,
any certificate evidencing such Warrant (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
exercise thereof which shall bear the legend set forth in Section 6(d), if
applicable) shall bear a legend in substantially the following form (unless
such Warrants have been transferred pursuant to a registration statement that
has been declared effective under the Securities Act (and which continues to
be effective at the time of such transfer), pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or unless
otherwise agreed by the Company in writing, with notice thereof to the Warrant
Agent):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE
ISSUER, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON
THIS SECURITY), (4) TO A PERSON THAT IS AN ACCREDITED INVESTOR AS
DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON THIS SECURITY)
AND THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION, AND A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER
IS AN EXHIBIT TO THE WARRANT AGREEMENT GOVERNING THIS SECURITY AND
MAY BE OBTAINED FROM THE WARRANT AGENT) IS DELIVERED PRIOR TO SUCH
TRANSFER BY THE TRANSFEREE TO THE ISSUER AND THE WARRANT AGENT, (5)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (7) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS. THE HOLDER HEREOF AGREES, THAT PRIOR TO SUCH
TRANSFER, IT WILL FURNISH TO THE ISSUER AND THE WARRANT AGENT AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS (OTHER THAN WITH RESPECT
TO A TRANSFER PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT) AND SUCH CERTIFICATES AND OTHER INFORMATION AS
THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS AND IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF SUCH LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A OR (2) AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2),
(3), (5), (6) OR (7) OF REGULATION D UNDER THE SECURITIES ACT AND
THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF RULE 902
UNDER) REGULATION S UNDER THE SECURITIES ACT.
The Company may, but is not obligated to instruct the Warrant Agent
to place the following legend on any Warrant held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities
Act) of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE
144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR
PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
Any Warrant (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance
with their terms may, upon surrender of the Warrant Certificate representing
such Warrant for exchange to the Warrant registrar in accordance with the
provisions of this Section 6, be exchanged for a new Warrant Certificate, of
like tenor and representing the same aggregate number of Warrants, which shall
not bear the restrictive legend required by this Section 6(c).
(d) Until the end of the holding period under Rule 144(k) of the
Securities Act (or any successor provision) applicable to the Common Stock
issued upon exercise of a Warrant, the stock certificate representing such
Common Stock shall bear a legend in substantially the following form (unless
such Common Stock has been sold pursuant to the exemption from registration
provided by Rule 144 under the Securities Act or pursuant to a registration
statement that has been declared effective under the Securities Act, and which
continues to be effective at the time of such transfer, or such Common Stock
has been issued upon the exercise of Warrants that have been transferred
pursuant to a registration statement that has been declared effective under
the Securities Act, and which was effective at the time of such transfer, or
unless otherwise agreed by the Company in writing with written notice thereof
to the Warrant Agent and any transfer agent for the Common Stock):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE
ISSUER, (2) IN THE EVENT THIS SECURITY BECOMES ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON
THIS SECURITY), (4) TO A PERSON THAT IS AN ACCREDITED INVESTOR AS
DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON THIS SECURITY)
THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS AN EXHIBIT TO
THE WARRANT AGREEMENT GOVERNING THIS SECURITY AND MAY BE OBTAINED
FROM THE TRANSFER AGENT) IS DELIVERED PRIOR TO SUCH TRANSFER BY THE
TRANSFEREE TO THE ISSUER AND THE TRANSFER AGENT, (5) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT, (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (7) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS.
THE HOLDER HEREOF AGREES, THAT PRIOR TO SUCH TRANSFER, IT WILL
FURNISH TO THE ISSUER AND THE TRANSFER AGENT AN OPINION OF COUNSEL IF
THE ISSUER SO REQUESTS (OTHER THAN WITH RESPECT TO A TRANSFER
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT) AND SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY
REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY THE HOLDER OF THIS
SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS AND IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT
IS (1) AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3),
(5), (6) OR (7) OF REGULATION D UNDER THE SECURITIES ACT AND THAT IT
IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (2) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
The Company may, but is not obligated to instruct the transfer agent
for the Company's Common Stock to place the following legend on any
certificate evidencing shares of Common Stock held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities
Act) of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE
144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR
PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of the
certificates representing such shares of Common Stock for exchange in
accordance with the procedures of the transfer agent for the Common Stock, be
exchanged for a new certificate or certificates for a like aggregate number of
shares of Common Stock, which shall not bear the restrictive legend required
by this Section 6(d).
(e) Any Warrant or Common Stock issued upon the exercise of a Warrant
that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor rule), is
purchased or owned by the Company or any Affiliate thereof may not be resold
by the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction that results in such Warrants or Common Stock,
as the case may be, no longer being "restricted securities" (as defined under
Rule 144). (f) Notwithstanding any provision of Section 6 to the contrary, in
the event Rule 144(k) as promulgated under the Securities Act (or any
successor rule) is amended to change the two-year period under Rule 144(k) (or
the corresponding period under any successor rule), from and after receipt by
the Warrant Agent of the Officer's Certificate and Opinion of Counsel provided
for in this Section 6(f), (i) each reference in Section 6(c) and 6(d) to "two
(2) years" shall be deemed for all purposes hereof to be references to such
changed period and (ii) all corresponding references in the Warrants shall be
deemed for all purposes hereof to be references to such changed period,
provided that such changes shall not become effective if they are otherwise
prohibited by, or would otherwise cause a violation of, the then-applicable
federal securities laws. As soon as practicable after the Company has
knowledge of the effectiveness of any such amendment to change the two-year
period under Rule 144(k) (or the corresponding period under any successor
rule), unless such changes would otherwise be prohibited by, or would
otherwise cause a violation of, the then-applicable securities law, the
Company shall provide to the Warrant Agent an Officer's Certificate and
Opinion of Counsel informing the Warrant Agent of the effectiveness of such
amendment and the effectiveness of the foregoing changes to Sections 6(c) and
6(d) and the Warrants. The provisions of this Section 6(f) will not be
effective until such time as the Opinion of Counsel and Officer's Certificate
have been received by the Warrant Agent hereunder. This Section 6(f) shall
apply to successive amendments to Rule 144(k) (or any successor rule) changing
the holding period thereunder.
(g) The Warrant Agent shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Agreement or under applicable law with respect to any
transfer of any interest in any Warrant other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Agreement,
and to examine the same to determine substantial compliance as to form with
the express requirements hereof and thereof.
(h) No service charge shall be charged to the Warrantholder for any
exchange or registration of transfer of Warrants, but the Company may require
payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection with the issue and
delivery of Warrant Certificates in any name other than that of such
Warrantholder.
(i) All Warrants surrendered for the purpose of exercise, repurchase,
exchange or registration of transfer, shall, if surrendered to the Company or
any Warrant registrar, be surrendered to the Warrant Agent and promptly
canceled by it, or if surrendered to the Warrant Agent, shall be promptly
canceled by it, and no Warrants shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Warrant
Agent shall dispose of canceled Warrants in accordance with its customary
procedures. If the Company shall acquire any of the Warrants, such acquisition
shall not operate as a redemption of satisfaction of the indebtedness
represented by such Warrants unless and until the same are delivered to the
Warrant Agent for cancellation.
(k) During any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, Warrantholders (or holders of interests
therein) and prospective purchasers designated by such Warrantholders (or such
holders of interests therein) shall have the right to obtain from the Company
upon request by such Warrantholders (or such holders of interests) or
prospective purchasers the information required by paragraph (d)(4)(i) of Rule
144A in connection with any transfer or proposed transfer of such Warrants or
interests. In addition, if the Common Stock is eligible for sale pursuant to
Rule 144A, the holders of the shares of Common Stock issuable upon exercise of
the Warrants and prospective purchasers designated by such holders shall have
the right to obtain from the Company upon request by such holder or
prospective purchasers, during any period in which the Company is not subject
to Section 13 or 15(d) of the Exchange Act, the information required by
paragraph (d)(4)(i) of Rule 144A in connection with any transfer or proposed
transfer of such shares of Common Stock.
SECTION 7. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent
of the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or
mutilation of any Warrant Certificate and of indemnity satisfactory to them
and, in the case of mutilation or defacement, upon surrender thereof to the
Warrant Agent for cancellation, then, in the absence of notice to the Company
or the Warrant Agent that such Warrant Certificate has been acquired by a bona
fide purchaser or holder in due course, the Company shall execute, and an
authorized signatory of the Warrant Agent shall manually countersign and make
available for delivery, in exchange for or in lieu of the lost, stolen,
destroyed, defaced or mutilated Warrant Certificate, a new Warrant Certificate
representing a like number of Warrants, bearing a number or other
distinguishing symbol not contemporaneously outstanding. Every substitute
Warrant Certificate executed and delivered pursuant to this Section 7 in lieu
of any lost, stolen or destroyed Warrant Certificate shall constitute an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of (but shall be subject to all
the limitations of rights set forth in) this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 7 are exclusive with
respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates and shall preclude (to the extent lawful) any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement of lost,
stolen, destroyed, defaced or mutilated Warrant Certificates.
The Warrant Agent is hereby authorized to countersign in accordance
with the provisions of this Agreement and make available for delivery the new
Warrant Certificates required pursuant to the provisions of this Section 7.
SECTION 8. Offices for Exercise, Etc. So long as any of the Warrants
remain outstanding, the Company shall designate and maintain in the Borough of
Manhattan, the City of New York: (a) an office or agency where the Warrant
Certificates may be presented for exercise, (b) an office or agency where the
Warrant Certificates may be presented for registration of transfer and for
exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 5(c) hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect
of the Warrants or of this Agreement may be served. The Company may from time
to time change or rescind such designation, as it may deem desirable or
expedient; provided, however, that an office or agency shall at all times be
maintained in the Borough of Manhattan, City of New York, as provided in the
first sentence of this Section 8. In addition to such office or offices or
agency or agencies, the Company may from time to time designate and maintain
one or more additional offices or agencies within or outside the Borough of
Manhattan, City of New York, where Warrant Certificates may be presented for
exercise or for registration of transfer or for exchange, and the Company may
from time to time change or rescind such designation, as it may deem desirable
or expedient. The Company will give to the Warrant Agent written notice of the
location of any such office or agency and of any change of location thereof.
The Company hereby designates the Warrant Agent's Corporate Office, as the
initial agency maintained for each such purpose. In case the Company shall
fail to maintain any such office or agency or shall fail to give such notice
of the location or of any change in the location thereof, presentations and
demands may be made and notice may be served at the Corporate Office and the
Company appoints the Warrant Agent as its agent to receive all such
presentations, surrenders, notices and demands.
SECTION 9. Duration of Warrants; Early Termination of Warrants. (a)
The Warrants shall expire at 5:00 p.m., New York City time, on August 28, 2006
(such date, the "Expiration Date"). Each Warrant may be exercised on any
Business Day on or prior to the close of business on the Expiration Date.
Any Warrant not exercised before the close of business on the
Expiration Date as the case may be, shall become void, and all rights of the
holder under the Warrant Certificate evidencing such Warrant and under this
Agreement shall cease.
SECTION 10. Exercise, Exercise Price, Settlement and Delivery.
(a) Warrants may be exercised during the period commencing on the day
after the date of the Warrant Agreement and ending at 5:00 p.m., New York City
time, on the Expiration Date, by (i) surrendering, at any office or agency
maintained for that purpose by the Company pursuant to Section 8 (each a
"Warrant Exercise Office"), the Warrant Certificate evidencing such Warrants
with the exercise form appended to the Warrant Certificate (the "Exercise
Form") duly completed and signed by the registered holder or holders thereof
or by the duly appointed legal representative thereof or by a duly authorized
attorney, and in the case of a transfer, such signature shall be guaranteed by
an eligible guarantor institution, (ii) sending copies of such Exercise Form
via facsimile to the Company, attention General Counsel ((000) 000-0000) and
Xxxxxx & Xxxxxxx, attention Xxxx Xxxxxxx ((000) 000-0000), (iii) paying in
full the Exercise Price for each such Warrant exercised and any other amounts
required to be paid pursuant to Section 10(b) hereof, (iv) except in the event
of a Cashless Exercise (as defined in Section 10(b)) or in the event of the
exercise of a Warrant that has been transferred pursuant to a registration
statement that has been declared effective under the Securities Act, and which
was effective at the time of such transfer, furnishing to the Company and the
Warrant Agent a signed letter containing certain representations and
agreements relating to the restrictions on transfer set forth in Exhibit B
hereto and an opinion of counsel if the Company so requests, and (v) providing
such additional documentation or certifications as the Company and/or the
Warrant Agent may reasonably request.
(b) Simultaneously with the exercise of each Warrant, payment in full
of the Exercise Price shall be made:
(i) in cash or by certified or official bank check to be
delivered to the office or agency where the Warrant Certificate is being
surrendered;
(ii) by tendering a principal amount of Notes in integral
multiples of $1,000, including any accrued but unpaid interest thereon up to,
but not including, the Exercise Date, equal to, together with any payment of
cash pursuant to Section 10(b)(i) above, the Exercise Price; or
(iii) solely by the surrender of the applicable Warrant
Certificate, and without the payment of the Exercise Price in cash, for such
number of shares of Common Stock equal to the product of (1) the number of
shares of Common Stock for which such Warrant is exercisable upon payment of
the Exercise Price in cash as of the date of exercise and (2) the Cashless
Exercise Ratio (such exercise, a "Cashless Exercise").
For purposes of this Agreement, the "Cashless Exercise Ratio" shall equal a
fraction, the numerator of which is the excess of the Closing Price per share
of the Common Stock on the last Trading Day before the Exercise Date
(determined as set forth in Section 10(c)) over the Exercise Price Per Share
(as defined below) as of the last Trading Day before the Exercise Date and the
denominator of which is the Closing Price per share of the Common Stock on the
last Trading Day before the Exercise Date. Upon surrender of a Warrant
Certificate representing more than one Warrant in connection with the holder's
option to elect a Cashless Exercise, the number of shares of Common Stock
deliverable upon a Cashless Exercise shall be equal to the number of shares of
Common Stock for which such Warrants are exercisable (or if only a portion of
such Warrants are being exercised, such number of shares of Common Stock
issuable upon exercise of the Warrants that the holder specifies are to be
exercised pursuant to a Cashless Exercise) upon payment of the Exercise Price
in cash as of the date of exercise multiplied by the Cashless Exercise Ratio.
In accordance with Section 10(e) hereof and subject to Section 16
hereof, if any holder exercises less than all of the Warrants evidenced by a
Warrant Certificate, a new Warrant Certificate will be issued to such holders
for the remaining number of Warrants. All provisions of this Agreement shall
be applicable with respect to an exercise of a Warrant Certificate pursuant to
a Cashless Exercise for less than the full number of Warrants represented
thereby. "Exercise Price Per Share" means with respect to the Common Stock the
Exercise Price divided by the number of shares of Common Stock for which a
Warrant is then exercisable (without giving effect to the Cashless Exercise
option). No payment or adjustment shall be made on account of any dividends on
the shares of Common Stock issued upon exercise of a Warrant.
(c) Upon such surrender of a Warrant Certificate, payment and
collection of the Exercise Price at any Warrant Exercise Office (other than
the Corporate Office), delivery of the letter and opinion of counsel
referenced in Section 10(a), if required, and delivery of such additional
documentation or certifications as the Company and/or the Warrant Agent may
reasonably request, such Warrant Certificate and payment shall be promptly
delivered to the Warrant Agent. The "Exercise Date" for a Warrant shall be the
date when all of the applicable items referred to in the first sentence of
paragraphs (a) and (b) of this Section 10 are received by the Warrant Agent,
the Company and Xxxxxx & Xxxxxxx, at or prior to 11:00 a.m., New York City
time, on a Business Day and the exercise of the Warrants will be effective as
of such Exercise Date. If any items referred to in the first sentence of such
paragraphs (a) and (b) are received after 11:00 a.m., New York City time, on a
Business Day, the exercise of the Warrants to which such item relates will be
effective on the next succeeding Business Day. Notwithstanding the foregoing,
in the case of an exercise of Warrants on the Expiration Date, if all of the
items referred to in the first sentence of paragraphs (a) and (b) are received
by the Warrant Agent, the Company and Xxxxxx & Xxxxxxx, as applicable, at or
prior to 5:00 p.m., New York City time, on such Expiration Date, the exercise
of the Warrants to which such items relate will be effective on the Expiration
Date. For purposes of determining satisfaction of the requirement set forth
above with respect to the Exercise Date for any Warrant, any facsimile
required to be sent shall be deemed to have been received on a given day if
such facsimile was sent before 11:00 a.m., New York City time, on such date
(or 5:00 p.m., New York City time, if such date is the Expiration Date), to
the number listed above in Section 10(a) (unless a different number is
specified in a notice filed with the Warrant Agent and mailed by the Warrant
Agent at the Company's expense to each holder of Warrants at such holder's
address appearing on the Warrant register) and confirmation of the
transmission of such facsimile is obtained.
(d) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise Price
(or election of the Cashless Exercise option), the Warrant Agent shall: (i)
except to the extent exercise of the Warrant has been effected through
Cashless Exercise, cause an amount equal to the Exercise Price to be paid to
the Company by crediting the same to the account designated by the Company in
writing to the Warrant Agent for that purpose; (ii) promptly advise the
Company by telephone of the amount so deposited to the Company's account and
promptly confirm such telephonic advice in writing; and (iii) as soon as
practicable, advise the Company in writing of the number of Warrants exercised
in accordance with the terms and conditions of this Agreement and the Warrant
Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the shares of Common Stock to which
such holder is entitled upon such exercise, and such other information as the
Company shall reasonably request.
(e) Subject to Section 6 hereof, the Company shall use its reasonable
best efforts to issue or cause to be issued to or upon the written order of
the registered holder of the Warrant Certificate evidencing such exercised
Warrant or Warrants, the shares of Common Stock to which such holder is
entitled, in fully registered form, registered in such name or names as may be
directed by such holder pursuant to the Exercise Form, as appended to the
Warrant Certificate, within three (3) Business Days of such Exercise Date, and
in any event, shall issue or caused to be issued such shares within ten (10)
Business Days of such Exercise Date. Such shares of Common Stock shall be
deemed to have been issued and any persons who are designated to be named
therein shall be deemed to have become the holder of record of such shares of
Common Stock as of the close of business on the Exercise Date. After such
exercise of any Warrant or Warrants, the Company shall also issue or cause to
be issued to or upon the written order of the registered holder of such
Warrant Certificate, a new Warrant Certificate, countersigned by the Warrant
Agent pursuant to written instruction, evidencing the number of Warrants, if
any, remaining unexercised unless such Warrants shall have expired.
SECTION 11. Cancellation of Warrant Certificates. The Warrant Agent
shall cancel all Warrant Certificates properly surrendered for exchange,
substitution, transfer or exercise. The Warrant Agent shall dispose of such
canceled Warrant Certificates in accordance with its customary procedures.
SECTION 12. Adjustment of Exercise Price and Number of Shares
Issuable. The Exercise Price, the number of Shares issuable upon the exercise
of each Warrant and the number of Warrants outstanding are subject to
adjustment from time to time upon the occurrence of the events enumerated in
this Section 12.
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Exercise Price in effect at the opening of business on the
date following the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be reduced by multiplying
such Exercise Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the Record
Date (as defined in Section 12(h)) fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day
following the Record Date. If any dividend or distribution of the type
described in this Section 12(a) is declared but not so paid or made, the
Exercise Price shall again be adjusted to the Exercise Price which would then
be in effect if such dividend or distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Exercise Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into
a smaller number of shares of Common Stock, the Exercise Price in effect at
the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(c) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for the
determination of stockholders entitled to receive such rights or warrants) to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price (as defined in Section 12(h)) on the Record Date
fixed for the determination of stockholders entitled to receive such rights or
warrants, the Exercise Price shall be adjusted so that the same shall equal
the price determined by multiplying the Exercise Price in effect at the
opening of business on the date after such Record Date by a fraction of which
the numerator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the number of
shares that the aggregate offering price of the total number of shares so
offered for subscription or purchase would purchase at such Current Market
Price, and of which the denominator shall be the sum of the number of shares
of Common Stock outstanding at the close of business on the Record Date plus
the total number of additional shares of Common Stock so offered for
subscription or purchase.
Such adjustment shall become effective immediately after the opening
of business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered pursuant to such rights or warrants,
upon the expiration or termination of such rights or warrants the Exercise
Price shall be readjusted to the Exercise Price that would then be in effect
had the adjustments made upon the issuance of such rights or warrants been
made on the basis of delivery of only the number of shares of Common Stock
actually delivered. In the event that such rights or warrants are not so
issued, the Exercise Price shall again be adjusted to be the Exercise Price
that would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been fixed.
In determining whether any rights or warrants entitle the holders to subscribe
for or purchase shares of Common Stock at less than such Current Market Price,
and in determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received for such
rights or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12(a)
applies) or evidences of its indebtedness or other assets (including
securities, but excluding (1) any rights or warrants referred to in Section
12(c) and (2) dividends and distributions paid exclusively in cash (except as
set forth in Section 12(e) and (f), (the foregoing hereinafter in this Section
12(d) called the "Securities")), unless the Company elects to reserve such
Securities for distribution to the Warrantholders upon conversion of the
Warrants so that any such holder converting Warrants will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Warrants into Common Stock
immediately prior to the Record Date (as defined in Section 12(h) for such
distribution of the Securities) then, in each such case, the Exercise Price
shall be reduced so that the same shall be equal to the price determined by
multiplying the Exercise Price in effect immediately prior to the close of
business on the Record Date (as defined in Section 12(h)) with respect to such
distribution by a fraction of which the numerator shall be the Current Market
Price (determined as provided in Section 12(h)) on such date less the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) on such date of the
portion of the Securities so distributed applicable to one share of Common
Stock and the denominator shall be such Current Market Price, such reduction
to become effective immediately prior to the opening of business on the day
following the Record Date; provided, however, that in the event the then fair
market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Warrantholder shall
have the right to receive upon conversion of a Warrant (or any portion
thereof) the amount of Securities such holder would have received had such
holder converted such Warrant (or portion thereof) immediately prior to such
Record Date.
In the event that such dividend or distribution is not so paid or
made, the Exercise Price shall again be adjusted to be the Exercise Price
which would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12(d) by reference to the actual or
when issued trading market for any securities comprising all or part of such
distribution, it must in doing so consider the prices in such market over the
same period (the "Reference Period") used in computing the Current Market
Price pursuant to Section 12(h) to the extent possible, unless the Board of
Directors in a Board Resolution reasonably determines that determining the
fair market value during the Reference Period would not be in the best
interest of the Warrantholder.
In the event that the Company implements a new stockholder rights
plan, such rights plan shall provide that upon exercise of the Warrants the
holders will receive, in addition to the Common Stock issuable upon such
exercise, the rights issued under such rights plan (notwithstanding the
occurrence of an event causing such rights to separate from the Common Stock
at or prior to the time of exercise). Any distribution of rights or warrants
pursuant to a stockholder rights plan complying with the requirements set
forth in the immediately preceding sentence of this paragraph shall not
constitute a distribution of rights or warrants for the purposes of this
Section 12(d).
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"), (i) are deemed to be transferred with such
shares of Common Stock, (ii) are not exercisable, and (iii) are also issued in
respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 12(d) (and no adjustment to the
Exercise Price under this Section 12(d) will be required) until the occurrence
of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets or entitle the holder to purchase a different number or amount
of the foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the date
of issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of
the type described in the preceding sentence) with respect thereto, that
resulted in an adjustment to the Exercise Price under this Section 12(d), (1)
in the case of any such rights or warrants that shall all have been redeemed
or repurchased without exercise by any holders thereof, the Exercise Price
shall be readjusted upon such final redemption or repurchase to give effect to
such distribution or Trigger Event, as the case may be, as though it were a
cash distribution, equal to the per share redemption or repurchase price
received by a holder of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants all of which shall have expired or
been terminated without exercise, the Exercise Price shall be readjusted as if
such rights and warrants had never been issued.
For purposes of this Section 12(d) and Sections 12(a) and (c), any
dividend or distribution to which this Section 12(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 12(c) applies (or both),
shall be deemed instead to be (1) a dividend or distribution of the evidences
of indebtedness, assets, shares of capital stock, rights or warrants other
than such shares of Common Stock or rights or warrants to which Section 12(c)
applies (and any Exercise Price reduction required by this Section 12(e) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Exercise Price reduction required by
Sections 12(a) and (c) with respect to such dividend or distribution shall
then be made, except (A) the Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution", "Record Date fixed
for such determination" and "Record Date" within the meaning of Section 12(a)
and as "the date fixed for the determination of stockholders entitled to
receive such rights or warrants", "the Record Date fixed for the determination
of the stockholders entitled to receive such rights or warrants" and "such
Record Date" within the meaning of Section 12(c) and (B) any shares of Common
Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 12(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 13 applies or as
part of a distribution referred to in Section 12(d)), in an aggregate amount
that, combined together with (1) the aggregate amount of any other such
distributions to all holders of its Common Stock made exclusively in cash
within the twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to this Section
12(e) has been made, and (2) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender offer by the Company or any of its subsidiaries for all
or any portion of the Common Stock concluded within the twelve (12) months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to Section 12(f) has been made, exceeds 10% of the product
of the Current Market Price (determined as provided in Section 12(h)) on the
Record Date with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date, the Exercise Price shall
be reduced so that the same shall equal the price determined by multiplying
the Exercise Price in effect immediately prior to the close of business on
such Record Date by a fraction (i) the numerator of which shall be equal to
the Current Market Price on the Record Date less an amount equal to the
quotient of (x) the excess of such combined amount over such 10% and (y) the
number of shares of Common Stock outstanding on the Record Date and (ii) the
denominator of which shall be equal to the Current Market Price on such date;
provided, however, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Warrantholder shall have the right to receive upon exercise of a Warrant (or
any portion thereof) the amount of cash such holder would have received had
such holder exercised such Warrant (or portion thereof) immediately prior to
such Record Date. In the event that such dividend or distribution is not so
paid or made, the Exercise Price shall again be adjusted to be the Exercise
Price that would then be in effect if such dividend or distribution had not
been declared.
(f) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of the
tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (1) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as of
the expiration of such tender offer, of consideration payable in respect of
any other tender offers, by the Company or any of its subsidiaries for all or
any portion of the Common Stock expiring within the twelve (12) months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this Section 12(f) has been made and (2) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within twelve (12) months preceding the expiration of such
tender offer and in respect of which no adjustment pursuant to Section 12(e)
has been made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 12(h)) as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender offer (as it may
be amended) times the number of shares of Common Stock outstanding (including
any tendered shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Exercise Price shall be adjusted so that the same shall
equal the price determined by multiplying the Exercise Price in effect
immediately prior to close of business on the date of the Expiration Time by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time multiplied
by the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified
in the terms of the tender offer) of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to any
such maximum, being referred to as the "Purchased Shares") and (y) the product
of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, such reduction
(if any) to become effective immediately prior to the opening of business on
the day following the Expiration Time. .In the event that the Company is
obligated to purchase shares pursuant to any such tender offer, but the
Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Exercise Price shall again
be adjusted to be the Exercise Price that would then be in effect if such
tender offer had not been made. If the application of this Section 12(f) to
any tender offer would result in an increase in the Exercise Price, no
adjustment shall be made for such tender offer under this Section 12(f).
(g) In case of a tender or exchange offer made by a person other than
the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding and
shall involve the payment by such person of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors in
good faith, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, and in
which, as of the Expiration Time the Board of Directors is not recommending
rejection of the offer, the Exercise Price shall be reduced so that the same
shall equal the price determined by multiplying the Exercise Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) on the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time.
In the event that such person is obligated to purchase shares
pursuant to any such tender or exchange offer, but such person is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Exercise Price shall again be adjusted to be the
Exercise Price that would then be in effect if such tender or exchange offer
had not been made. Notwithstanding the foregoing, the adjustment described in
this Section 12(g) shall not be made if, as of the Expiration Time, the
offering documents with respect to such offer disclose a plan or intention to
cause the Company to engage in any transaction described in Section 13.
(h) For purposes of this Section 12, the following terms shall have
the meaning indicated:
(i) "Closing Price" with respect to any securities on any
day shall mean the closing 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, in each case on the Nasdaq National Market or New
York Stock Exchange, as applicable, or, if such security is not listed or
admitted to trading on such National Market or Exchange, on the principal
national security exchange or quotation system on which such security is
quoted or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose, or a price determined in good faith by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution.
(ii) "Current Market Price" shall mean the average of the
daily Closing Prices per share of Common Stock for the ten (10) consecutive
Trading Days immediately prior to the date in question; provided, however,
that (1) if the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Exercise Price pursuant to Section 12(a), (b), (c), (d),
(e), (f) or (g) occurs during such ten (10) consecutive Trading Days, the
Closing Price for each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the same fraction by
which the Exercise Price is so required to be adjusted as a result of such
other event, (2) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Exercise Price pursuant to Section 12(a), (b), (c), (d), (e), (f) or (g)
occurs on or after the "ex" date for the issuance or distribution requiring
such computation and prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event shall be adjusted
by multiplying such Closing Price by the reciprocal of the fraction by which
the Exercise Price is so required to be adjusted as a result of such other
event, and (3) if the "ex" date for the issuance or distribution requiring
such computation is prior to the day in question, after taking into account
any adjustment required pursuant to clause (1) or (2) of this proviso, the
Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value
(as determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 12(d), (f) or (g), whose
determination shall be conclusive and described in a Board Resolution) of the
evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such "ex" date. For purposes of any computation under Sections 12(f) or
(g), the Current Market Price of the Common Stock on any date shall be deemed
to be the average of the daily Closing Prices per share of Common Stock for
such day and the next two succeeding Trading Days; provided, however, that if
the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Exercise Price pursuant to
Section 12(a), (b), (c), (d), (e), (f) and (g) occurs on or after the
Expiration Time for the tender or exchange offer requiring such computation
and prior to the day in question, the Closing Price for each Trading Day on
and after the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the reciprocal of the fraction by which the Exercise
Price is so required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date, (1) when used with respect to
any issuance or distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right to receive such
issuance or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective, and (3) when
used with respect to any tender or exchange offer means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the Expiration Time of such offer. Notwithstanding the foregoing,
whenever successive adjustments to the Exercise Price are called for pursuant
to this Section 12, such adjustments shall be made to the Current Market Price
as may be necessary or appropriate to effectuate the intent of this Section 12
and to avoid unjust or inequitable results as determined in good faith by the
Board of Directors.
(iii) "Fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length transaction.
(iv) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or in
which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(v) "Trading Day" shall mean (x) if the applicable security
is listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange or such
other national security exchange, as applicable, is open for business or (y)
if the applicable security is quoted on the Nasdaq National Market, a day on
which trades may be made thereon or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) The Company may make such reductions in the Exercise Price, in
addition to those required by Sections 12(a), (b), (c), (d), (e), (f) and (g),
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Exercise Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during such
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive and described in a Board Resolution. Whenever the Exercise
Price is reduced pursuant to the preceding sentence, the Company shall mail to
the holder of each Warrant at his last address appearing on the Warrant
register provided for in Section 8 a notice of the reduction at least fifteen
(15) days prior to the date the reduced Exercise Price is to take effect, and
such notice shall state the reduced Exercise Price and the period during which
it will be in effect.
(j) No adjustment in the Exercise Price shall be required under this
Section 12 unless such adjustment would require an increase or decrease of at
least 1% in the Exercise Price; provided, however, that any adjustments which
by reason of this Section 12(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 12 shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
No adjustment need be made for a change in the par value or no par value of
the Common Stock.
(k) Whenever the Exercise Price is adjusted as provided in this
Section 12, the Company shall promptly file with the Warrant Agent an
Officer's Certificate setting forth the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.
The Warrant Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have
knowledge of such adjustment unless and until it shall have received such
certificate. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Exercise Price setting forth the
adjusted Exercise Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Exercise Price
to the holder of each Warrant at his last address appearing on the Warrant
register provided for in Section 8, within twenty (20) days of the effective
date of such adjustment. Failure to deliver such notice shall not effect the
legality or validity of any such adjustment.
(l) In any case in which this Section 12 provides that an adjustment
shall become effective immediately after a Record Date for an event, the
Company may defer until the occurrence of such event (i) issuing to the holder
of any Warrant exercised after such Record Date and before the occurrence of
such event the additional shares of Common Stock issuable upon such exercise
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment
and (ii) paying to such holder any amount in cash in lieu of any fraction
pursuant to Section 17.
(m) For purposes of this Section 12, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not
pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(n) Upon each adjustment of the Exercise Price pursuant to this
Section 12, each Warrant shall thereupon evidence the right to purchase that
number of shares of Common Stock (calculated to the nearest hundredth of a
share) obtained by multiplying the number of shares of Common Stock
purchasable immediately prior to such adjustment upon exercise of the Warrant
by the Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment. The adjustment pursuant to this Section 12(o) to the
number of shares of Common Stock purchasable upon exercise of a Warrant shall
be made each time an adjustment of the Exercise Price is made pursuant to this
Section 12 (or would be made but for Section 12(j) hereof).
SECTION 13. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), (ii) any consolidation,
merger or combination of the Company with another person as a result of which
holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, (iii) any statutory exchange, as a result of which holders
of Common Stock generally shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock (such transaction, a "Statutory Exchange"), (iv) any sale or
conveyance of the properties and assets of the Company as, or substantially
as, an entirety to any other person as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing person, as the case may be,
shall execute with the Warrant Agent a supplemental warrant agreement
providing that such Warrant shall be exercisable for the kind and amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, Statutory Exchange, sale or conveyance by a holder of a number of
shares of Common Stock issuable upon exercise of such Warrants (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock
available for issuance upon exercise of all such Warrants) immediately prior
to such reclassification, change, consolidation, merger, combination,
Statutory Exchange, sale or conveyance assuming such holder of Common Stock
did not exercise his rights of election, if any, that holders of Common Stock
who were entitled to vote or consent to such transaction had as to the kind or
amount of securities, cash or other property receivable upon such
consolidation, merger, combination, Statutory Exchange, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, combination, Statutory Exchange,
sale or conveyance is not the same for each share of Common Stock in respect
of which such rights of election shall not have been exercised ("non-electing
share"), then for the purposes of this Section 13 the kind and amount of
securities, cash or other property receivable upon such consolidation, merger,
combination, Statutory Exchange, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental warrant agreement
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 12. If, in the case of
any such reclassification, change, consolidation, merger, combination,
Statutory Exchange, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of shares of Common Stock include
shares of stock or other securities and assets of a corporation other than the
successor or purchasing person, as the case may be, in such reclassification,
change, consolidation, merger, combination, Statutory Exchange, sale or
conveyance, then such supplemental warrant agreement shall also be executed by
such other person and shall contain such additional provisions to protect the
interests of the holders of the Warrants as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The Exercise Price
for the stock and other securities, property and assets (including cash) so
receivable upon such event shall be an amount equal to the Exercise Price
immediately prior to such event.
The Company shall cause notice of the execution of such supplemental
warrant agreement to be mailed to each holder of Warrants, at such holder's
address appearing on the Warrant register provided for in Section 6 of this
Warrant agreement, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental warrant agreement.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 13 applies to any event or occurrence, Section 12
shall not apply.
SECTION 14. Taxes on Shares Issued. The issue of stock certificates
upon exercise of Warrants shall be made without charge to the exercising
Warrantholder for any tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of stock in any name other
than that of the holder of any Warrant exercised, and the Company shall not be
required to issue or deliver any such stock certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 15. Reservation of Shares; Shares to Be Fully Paid; Listing
of Common Stock. The Company shall reserve, free from preemptive rights, and
keep available out of its authorized but unissued shares or shares held in
treasury, sufficient shares of Common Stock for issuance upon exercise of the
Warrants from time to time as such Warrants are presented for exercise.
Before taking any action which would cause an adjustment reducing the
Exercise Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Warrants, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue shares of such Common Stock at such
adjusted Exercise Price.
The Company covenants that all shares of Common Stock issued upon
exercise of Warrants will be duly and validly issued and fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company further covenants that if at any time the Common Stock
shall be listed on the New York Stock Exchange, Nasdaq National Market or any
other national securities exchange or automated quotation system the Company
will, if permitted by the rules of such exchange or automated quotation
system, list and keep listed, so long as the Common Stock shall be so listed
on such exchange or automated quotation system, all Common Stock issuable upon
conversion of the Warrants.
SECTION 16. Fractional Warrants and Fractional Shares(a)
Notwithstanding anything contained in this Agreement to the contrary, the
Company shall not be required to issue fractions of Warrants or distribute
Warrant Certificates which evidence fractional Warrants.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Warrants or to distribute certificates which
evidence such fractional shares. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
shares of Common Stock which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of shares of Common Stock
purchasable on exercise of all Warrants so presented. In lieu any 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 16(b), the
current market value of a share of Common Stock shall be the Closing Price of
a share of Common Stock for the Trading Day immediately prior to the date of
such exercise.
SECTION 17. Notice to Warrantholders Prior to Certain Actions. In
case: (a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Exercise Price
pursuant to Section 12; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share of
any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Warrant Agent and mailed by the
Warrant Agent at the Company's expense to each holder of Warrants at such
holder's address appearing on the Warrant register as promptly as possible but
in any event at least fifteen days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
SECTION 18. Merger, Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Warrant Agent, shall be the successor to the Warrant
Agent hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Warrant Agent under the
provisions of Section 21. In case at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement, and in case at
that time any of the Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent; and in case at that time any
of the Warrant Certificates shall not have been countersigned, any successor
to the Warrant Agent may countersign such Warrant Certificates either in the
name of the predecessor warrant agent or in the name of the successor 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 Warrant Agent whose name has changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name, and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.
SECTION 19. Warrant Agent. The Warrant Agent undertakes the duties
and obligations expressly imposed by this Agreement upon the following terms
and conditions, and no implied duties or obligations shall be read into this
Agreement against the Warrant Agent, by all of which the Company and the
holders of Warrants, by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
the Warrant Agent or action taken or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel of its own
selection (who may be counsel for the Company) and the Warrant Agent shall
incur no liability or responsibility to the Company or to any holder of any
Warrant Certificate in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
(d) The Warrant Agent may conclusively rely upon and shall incur no
liability or responsibility to the Company or to any holder of any Warrant
Certificate for any action taken in reliance on any notice, resolution,
waiver, consent, order, certificate, or other paper, document or instrument
(whether in its original or facsimile form) believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent such compensation
as shall be agreed between the Company and the Warrant Agent for all services
rendered by the Warrant Agent in the execution of this Agreement, to reimburse
the Warrant Agent for all expenses, taxes and governmental charges and other
charges of any kind and nature incurred by the Warrant Agent in connection
with the execution and administration of its duties under this Agreement and
to fully indemnify the Warrant Agent and save it harmless against any and all
liabilities, claims, damages, losses and expenses including judgments, costs
and reasonable counsel fees and expenses, for anything done or omitted by the
Warrant Agent in the execution and administration of its duties under this
Agreement except as determined by a court of competent jurisdiction to have
been caused by its gross negligence or willful misconduct. The provisions of
this Section 19(e) shall survive the termination of this Agreement.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrant
Certificates shall furnish the Warrant Agent with security and indemnity
satisfactory to it for any costs and expenses which may be incurred. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding
relative thereto, and any such action, suit or proceeding instituted by the
Warrant Agent shall be brought in its name as Warrant Agent, and any recovery
of judgment shall be for the ratable benefit of the registered holders of the
Warrants, as their respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or
employee thereof, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any other legal
entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof
and no duties shall be inferred or implied against the Warrant Agent. The
Warrant Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own gross negligence or
willful misconduct.
(i) No provision of this Agreement shall require the Warrant Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of is rights if
there shall be reasonable grounds for believing repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
SECTION 20. Disposition of Proceeds of Exercise of Warrants. The
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all moneys or Notes received by
the Warrant Agent on the purchase of shares of Common Stock upon the exercise
of Warrants.
SECTION 21. Change of Warrant Agent. If the Warrant Agent shall
become incapable of acting as Warrant Agent, the Company shall appoint a
successor. If the Company shall fail to make such appointment within a period
of 30 days after it has been notified in writing of such incapacity by the
incapacitated Warrant Agent or by the registered holder of a Warrant
Certificate, then the Warranty Agent or registered holder of any Warrant
Certificate may apply, at the reasonable expense of the Company, to any court
of competent jurisdiction for the appointment of a successor to the
incapacitated Warrant Agent. Pending appointment of a successor to the Warrant
Agent, either by the Company or by such a court, the duties of the Warrant
Agent shall be carried out by the Company. Any successor warrant agent whether
appointed by the Company or by such a court, shall be a bank or trust company,
in good standing, incorporated under the laws of the State of New York or of
the United States of America, and having its principal office in the Borough
of Manhattan in New York, New York, and must have at the time of its
appointment as Warrant Agent a combined capital and surplus of at least one
hundred million dollars. After appointment the successor warrant agent shall
be vested with the same powers, rights, duties and responsibilities as if it
had been originally named as Warrant Agent without further act or deed; but
the former Warrant Agent shall, upon payment of all amounts owed to it
hereunder, 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. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the removal of the Warrant Agent or the
appointment of a successor warrant agent as the case may be.
SECTION 22. Notices to Company and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent
or by the registered holder of any Warrant Certificate to or on the Company
shall be sufficiently given or made if sent by mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
TiVo Inc.
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal corporate trust office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or
by the registered holder of any Warrant Certificate to the Warrant Agent shall
be sufficiently given if sent by first-class mail, postage pre-paid, addressed
(until another address is filed in writing by the Warrant Agent with the
Company) to the Warrant Agent as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
SECTION 23. Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant Certificates in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that the written consent of the holders of Warrant
Certificates representing a majority of the Warrants then outstanding (but not
including any Warrants then held by the Company or its Affiliates) is required
to amend or supplement the Warrant Agreement in any manner that would have a
material adverse effect on the interests of the Warrantholders and provided
further, that the consent of each holder of the Warrants affected is required
for any amendment which would increase the Exercise Price or decrease the
number of shares of Common Stock purchasable upon exercise of the Warrants,
except, in any case, pursuant to the adjustments provided for in Section 12.
Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section, the Warrant Agent shall execute
such supplement or amendment. Notwithstanding any other provision hereof, the
Warrant Agent's consent must be obtained regarding any amendment or supplement
pursuant to this Section 23 which alters the Warrant Agent's rights or duties.
It shall not be necessary for the consent of the Warrantholders under
this Section 23 to approve the particular form of any proposed supplemental
warrant agreement, but it shall be sufficient if such consent shall approve
the substance thereof.
SECTION 24. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 25. Termination. This Agreement shall terminate at the close
of business on August 28, 2006. Notwithstanding the foregoing, this Agreement
will terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 19 shall survive such termination.
SECTION 26. Governing Law. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
SECTION 27. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Warrant Agent and the registered holders of 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. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
[SIGNATURE PAGE TO WARRANT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
TIVO INC.
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: President and Chief
Executive Officer
Attest:
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President, Finance and
Administration and Chief Financial Officer
THE BANK OF NEW YORK, as Warrant Agent
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Assistant Treasurer
EXHIBIT A
FORM OF WARRANT
TIVO INC.
No. CUSIP No.
[THE FOLLOWING PARAGRAPHS SHALL APPEAR ON THE FACE OF EACH RESTRICTED WARRANT.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR
THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (1) TO THE ISSUER, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER APPEARING ON THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
APPEARING ON THIS SECURITY), (4) TO A PERSON THAT IS AN ACCREDITED INVESTOR AS
DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER APPEARING ON THIS SECURITY) AND THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS AN
EXHIBIT TO THE WARRANT AGREEMENT GOVERNING THIS SECURITY AND MAY BE OBTAINED
FROM THE WARRANT AGENT) IS DELIVERED PRIOR TO SUCH TRANSFER BY THE TRANSFEREE
TO THE ISSUER AND THE WARRANT AGENT, (5) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT,
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR (7) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS. THE HOLDER HEREOF AGREES, THAT PRIOR TO SUCH TRANSFER, IT
WILL FURNISH TO THE ISSUER AND THE WARRANT AGENT AN OPINION OF COUNSEL IF THE
ISSUER SO REQUESTS (OTHER THAN WITH RESPECT TO A TRANSFER PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT) AND SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM
THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS AND IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF SUCH LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN ACCREDITED
INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION
D UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION OR (3) NON-U.S. PERSON OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
[THE COMPANY MAY, BUT IS NOT OBLIGATED TO INSTRUCT THE WARRANT AGENT TO PLACE
THE FOLLOWING LEGEND ON ANY WARRANT HELD BY OR TRANSFERRED TO AN "AFFILIATE"
(AS DEFINED IN RULE 501(B) OF REGULATION D UNDER THE SECURITIES ACT):]
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY BE
DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY BE SOLD
ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT OR PURSUANT TO A VALID EXEMPTION FROM
REGISTRATION UNDER THE 1933 ACT.
WARRANT
REPRESENTING _________ WARRANTS TO PURCHASE COMMON STOCK
This certifies that _________, or its registered assigns, is the
registered owner of __________ Warrants, each expiring August 28, 2006, and
each of which entitles the registered owner thereof (the "Warrantholder") to
purchase at any time prior to the expiration hereof from TIVO INC., a Delaware
corporation (the "Company"), one share of Common Stock (the "Common Stock"),
$0.001 par value per share, of the Company at the purchase price of $7.85 per
share of Common Stock (the "Exercise Price"), subject to adjustment as
provided in the Warrant Agreement hereinafter referred to.
The Warrants evidenced by this Warrant are issued under and in
accordance with the Warrant Agreement, dated as of August 28, 2001 (the
"Warrant Agreement"), between the Company and The Bank of New York, as warrant
agent (the "Warrant Agent"), and the Registration Rights Agreement, dated of
even date therewith (the "Registration Rights Agreement"), among the Company
and the initial purchasers of the Warrants, and are subject to the terms and
provisions contained therein, to all of which terms and provisions the holder
of this Warrant consents by acceptance of this Warrant and which Warrant
Agreement and Registration Rights Agreement are hereby incorporated by
reference in and made a part of this Warrant.
Reference is hereby made to the Warrant Agreement and the
Registration Rights Agreement for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Company and the Warrantholders. The summary of the terms of the Warrant
Agreement and the Registration Rights Agreement contained in this Warrant is
qualified in its entirety by express reference to such agreements. All
capitalized terms used but not defined in this Warrant shall have the meanings
assigned to them in the Warrant Agreement.
As provided in the Warrant Agreement, and subject to the terms and
conditions set forth therein, the Warrants shall be exercisable at any time
during the period commencing on the day after the date of the Warrant
Agreement and ending at 5:00 p.m., New York time, on August 28, 2006 (the
"Expiration Date"). This Warrant may be exercised on any Business Day on or
prior to close of business on the Expiration Date.
Any Warrant not exercised before the close of business on the
Expiration Date, or the Termination Date, as the case may be, shall become
void, and all rights of the holder under the Warrant Certificate evidencing
such Warrant and under this Agreement shall cease.
The Exercise Price and the number of shares of Common Stock
purchasable upon exercise of each Warrant are subject to adjustment as
provided in the Warrant Agreement. If any of the following events occur,
namely (i) any reclassification or change of the outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation, merger or combination of the Company
with another person as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, (iii) any
statutory exchange, as a result of which holders of Common Stock generally
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock (such
transaction, a "Statutory Exchange"), (iv) any sale or conveyance of the
properties and assets of the Company as, or substantially as, an entirety to
any other person as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company
or the successor or purchasing person, as the case may be, shall execute with
the Warrant Agent a supplemental warrant agreement providing that such Warrant
shall be exercisable for the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, Statutory
Exchange, sale or conveyance by a holder of a number of shares of Common Stock
issuable upon exercise of such Warrants (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available for issuance
upon exercise of all such Warrants) immediately prior to such
reclassification, change, consolidation, merger, combination, Statutory
Exchange, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, that holders of Common Stock who were
entitled to vote or consent to such transaction had as to the kind or amount
of securities, cash or other property receivable upon such consolidation,
merger, combination, Statutory Exchange, sale or conveyance (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, combination, Statutory Exchange, sale or conveyance is
not the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purposes of Section 13 of the Warrant Agreement the kind and amount of
securities, cash or other property receivable upon such consolidation, merger,
combination, Statutory Exchange, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental warrant agreement
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 12 of the Warrant
Agreement. If, in the case of any such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance,
the stock or other securities and assets receivable thereupon by a holder of
shares of Common Stock include shares of stock or other securities and assets
of a corporation other than the successor or purchasing person, as the case
may be, in such reclassification, change, consolidation, merger, combination,
Statutory Exchange, sale or conveyance, then such supplemental warrant
agreement shall also be executed by such other person and shall contain such
additional provisions to protect the interests of the holders of the Warrants
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing. The Exercise Price for the stock and other securities, property and
assets (including cash) so receivable upon such event shall be an amount equal
to the Exercise Price immediately prior to such event.
The Company shall not be required to issue fractions of shares of
Common Sock upon exercise of the Warrants or to distribute certificates which
evidence such fractional shares. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
shares of Common Stock which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of shares of Common Stock
purchasable on exercise of all Warrants so presented. In lieu any of
fractional shares, there shall be paid to the registered holders of Warrant
Certificates at the time such Warrant Certificates are exercised an amount in
cash equal to the same fraction of the current market value of a share of
Common Stock. For purposes of this calculation, the current market value of a
share of Common Stock shall be the Closing Price of a share of Common Stock
for the Trading Day immediately prior to the date of such exercise.
The Company covenants that it will at all times through 5:00 p.m.,
New York time, on the Expiration Date (or, if the Expiration Date shall not be
a Business Day, then on the next-succeeding Business Day) reserve, free from
preemptive rights, and keep available out of its authorized but unissued
shares or shares held in treasury or a combination thereof of Common Stock,
solely for the purpose of issue upon exercise of Warrants as herein provided,
sufficient shares of Common Stock, for issuance upon exercise of, the Warrants
from time to time as such Warrants are presented for exercise. The Company
covenants that all shares of Common Stock issued upon exercise of Warrants
shall be duly and validly issued and fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issue thereof.
The initial issuance of certificates of Common Stock upon the
exercise of Warrants shall be made without charge to the exercising
Warrantholders for any tax in respect of the issuance of such stock
certificates, and such stock certificates shall be issued in the respective
names of, or in such names as may be directed by, the registered holders of
the Warrants exercised, subject to the restrictions on transfer set forth
herein and in the Warrant Agreement; provided, however, that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such stock certificate, any
Warrant Certificates or other securities in a name other than that of the
registered holder of the Warrant Certificate surrendered upon exercise of the
Warrant, and the Company shall not be required to issue or deliver such
certificates or other securities unless and until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
Subject to the terms and provisions of the Registration Rights
Agreement, the Company shall file under the Securities Act a registration
statement providing for the registration of all of the Warrants and the shares
of Common Stock issuable upon exercise thereof.
As provided in the Warrant Agreement and the Registration Rights
Agreement, the Warrantholders have additional rights and duties with respect
to the registration of the Warrants and the Common Stock issuable upon
exercise of the Warrants. A Warrantholder may be required to indemnify and
hold the Company and certain other persons harmless in connection with written
information furnished to the Company by or on behalf of such Warrantholder
specifically for use in any registration statement, or any preliminary or
final or summary Prospectus contained therein or any amendment or supplement
thereto.
By its acceptance of any Warrant represented by a Warrant Certificate
bearing a restrictive legend, each holder and beneficial owner of such a
Warrant acknowledges the restrictions on transfer of such a Warrant set forth
in such legend and agrees that it will transfer such a Warrant only in
accordance with such legend.
Subject to the restrictions on transfer set forth herein and in the
Warrant Agreement, this Warrant and all rights hereunder are transferable by
the registered Warrantholder hereof, in whole or in part, on the Warrant
register, upon surrender of this Warrant Certificate duly endorsed, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Warrant Agent duly executed, with signatures guaranteed as
specified in the attached "Form of Assignment," by the registered
Warrantholder hereof or his attorney duly authorized in writing and upon
payment of any necessary transfer tax or other governmental charge imposed
upon such transfer. Upon any partial transfer, the Company will issue and the
Warrant Agent will countersign and deliver to such Warrantholder a new Warrant
Certificate or Warrant Certificates with respect to any portion not so
transferred. Each taker and holder of this Warrant, by taking and holding the
same, consents and agrees that prior to the registration of transfer as
provided in the Warrant Agreement, the Company and the Warrant Agent may treat
the person in whose name the Warrants are registered as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding.
This Warrant Certificate may be exchanged at the office of the
Warrant Agent for Warrant Certificates representing the same aggregate number
of Warrants, each new Warrant Certificate to represent such number of Warrants
as the holder hereof shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the holder
of this Warrant shall not be entitled, as such, to any rights of a stockholder
of the Company, including, without limitation, the right to vote or to consent
to any action of the stockholders of the Company, to receive dividends or
other distributions, to exercise any preemptive right or to receive any notice
of meetings of stockholders of the Company, and shall not be entitled to
receive any notice of any proceedings of the Company except as provided in the
Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of the
Warrant Agent and may be obtained by writing to the Warrant Agent at the
following address:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
THE WARRANT AGREEMENT AND THIS WARRANT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
This Warrant shall not be valid for any purpose until it shall have
been countersigned by the Warrant Agent.
TIVO INC.
By:
Name:
Title:
Attest:
By:
Name:
Title:
Countersigned:
THE BANK OF NEW YORK
as Warrant Agent
By:
Authorized Signatory
Dated:
EXERCISE FORM
(To be executed only upon exercise of Warrant)
The undersigned registered holder of a Warrant Certificate
representing __________ Warrants irrevocably elects to exercise __________ of
the Warrants represented by the Warrant Certificate for the purchase of one
share (subject to adjustment as set forth in the Warrant Agreement) of Common
Stock, $0.001 par value, of TiVo Inc., for each Warrant so exercised, and
herewith
[ ] makes payment of $__________ (such payment being in cash or by
certified or official bank check payable to the order or at the direction of
TiVo Inc.),
[ ] tenders $_______ principal amount of the Company's 7% Convertible
Senior Notes due 2006, plus payment of $__________ (such payment being in cash
or by certified or official bank check payable to the order or at the
direction of TiVo Inc.),
[ ] elects to make a "Cashless Exercise" of such Warrants as provided
in Section 10(b) of the Warrant Agreement,
all at the exercise price and on the terms and conditions specified in the
Warrant and the Warrant Agreement therein referred to, and surrenders all of
its right, title and interest in the number of Warrants exercised herein to
TiVo Inc., and directs that the shares of Common Stock or other securities or
property deliverable upon the exercise of such Warrants, and any Warrant
Certificate or interests in the Warrant representing unexercised Warrants, be
registered or placed in the name and at the address specified below and
delivered thereto.
Dated:
________________________________________
(Signature of Warrantholder)
________________________________________
(Xxxxxx Xxxxxxx)
________________________________________
(City) (State) (Zip Code
Signature Guaranteed By:
________________________________________
This form must be delivered to the Warrant Agent at the Corporate Office,
which initially shall be 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, X.X. 10286,
Attention: Corporate Trust Administration. Copies of this form must be sent by
facsimile to TiVo Inc., attention General Counsel ((000) 000-0000) and Xxxxxx
& Xxxxxxx, attention Xxxx Xxxxxxx ((000) 000-0000).
1. COMMON STOCK AND/OR CHECK TO BE ISSUED TO:
IF IN CERTIFICATED FORM (Common Stock or Notes:
Social Security Number or identifying number: ______________________________
Name: ______________________________________________________________________
Street Address:_____________________________________________________________
City, State and Zip Code:___________________________________________________
IF IN BOOK-ENTRY FORM THROUGH DTC:
ACCOUNT NUMBER:_____________________________________________________________
ACCOUNT NAME:_______________________________________________________________
ANY UNEXERCISED WARRANTS REPRESENTED BY THE EXERCISING HOLDER'S INTEREST IN
THE WARRANT TO BE ISSUED IN CERTIFICATED FORM TO:
Social Security Number or identifying number: ______________________________
Name: ______________________________________________________________________
Street Address:_____________________________________________________________
City, State and Zip Code:___________________________________________________
FORM OF ASSIGNMENT AND TRANSFER
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant Certificate hereby sells, assigns and transfers unto the Assignee(s)
named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant
Certificate not being assigned hereby) all of the right of the undersigned
under the within Warrant Certificate, with respect to the number of Warrants
set forth below:
Social Security
Number Number or Other
Name of Assignees Address of Warrants Identifying Number
and does hereby irrevocably constitute and appoint ________________________,
the undersigned's attorney, to make such transfer on the books of TiVo Inc.
maintained for the purpose, with full power of substitution in the premises.
In connection with any transfer occurring within two years (or such
longer or shorter holding period required under Rule 144(k) of the Securities
Act) of the original issuance of such Warrant (unless such Warrant is being
transferred pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such
Warrant is being transferred:
_
|_| *To TiVo Inc. or a subsidiary thereof; or
_
|_| *To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
_
|_| *To an Individual Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
_
|_| *In an offshore transaction pursuant to and in compliance
with Regulation S under the Securities Act of 1933, as
amended; or
_
|_| *Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note
is not being transferred to an "affiliate" of the Company as defined in Rule
144 under the Securities Act of 1933, as amended (an "Affiliate"):
_
|_| *The transferee is an Affiliate of the Company.
Dated:
________________________________________
(Signature of Warrantholder)
________________________________________
(Xxxxxx Xxxxxxx)
________________________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
________________________________________
EXHIBIT B
FORM OF TRANSFER LETTER OF REPRESENTATIONS
(To be delivered upon exercise of Warrants
or upon certain transfers of Warrants
WITHOUT EFFECTIVE REGISTRATION STATEMENT)
We are delivering this letter in connection with (i) the exercise of
Warrants (as defined in the Warrant Agreement, dated as of August 28, 2001,
between TiVo Inc., a Delaware corporation (the "Company") and The Bank of New
York, a New York banking corporation (the "Warrant Agent")) by us for shares
of common stock, par value $.001 per share, of the Company (the "Common
Stock") or (ii) the sale or transfer to us of Warrants, other than pursuant to
a registration statement that has been declared effective under the Securities
Act of 1933, as amended (the "Securities Act"). The Warrants and the Common
Stock are sometimes referred to herein as the "Securities."
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1),(2), (3), (5), (6) or (7) under the Securities Act;
(ii) any purchase or receipt of the Securities by us will be
for investment purposes and for our own account, not as a nominee or
agent;
(iii) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and
risks of purchasing or receiving the Securities ;
(iii) we do not have need for liquidity in our investment in
the Securities , we have the ability to bear the economic risks of
our investment in the Securities for an indefinite period of time and
we are able to afford the complete loss of our investment in the
Securities;
(iv) we are not acquiring the Securities with a view to any
distribution thereof in a transaction that would violate the
Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction, and we have no present
intention of selling, granting any participation in, or otherwise
distributing the same;
(v) we have had access to such information regarding the
Company necessary in order for us to make an informed decision and
any such information which we have requested have been made available
for us or our attorney, accountant, or advisor; and
(vi) we or our attorney, accountant, or advisor have had a
reasonable opportunity to ask questions of and receive answers from a
person or persons acting on behalf of the Company concerning the
business, management and financial affairs of the Company and the
terms and conditions of the acquisition by us of the Securities and
all such questions have been answered to our full satisfaction, and
we have acquired sufficient information about the Company to make an
informed and knowledgeable decision to acquire the Securities.
We understand that the Securities have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Securities, that such Securities may be offered,
resold, pledged or otherwise transferred only (i) in a transaction meeting the
requirements of Rule 144 under the Securities Act, outside the United States
in a transaction meeting the requirements of Rule 904 under the Securities
Act, or in accordance with another exemption from the registration
requirements of the Securities Act, (ii) to the Company or (iii) pursuant to
an effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We agree that we will furnish the Company, the
Warrant Agent and, if exercising Warrants, the Company's transfer agent an
opinion of counsel, if the Company so requests, that the foregoing
restrictions on transfer have been complied with. We understand that the
Warrant Agent will not be required to accept for registration of transfer or
exercise any Warrants, except upon presentation of evidence satisfactory to
the Company, including an opinion of counsel if the Company so requests, that
the foregoing restrictions on transfer or exercise have been complied with.
We acknowledge that the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
------------------------------
(Name)
By:____________________________
Name:
Title:
Address:
