WARRANT AGREEMENT dated as of March 31, 1997 (this
"Agreement"), between TRANS WORLD AIRLINES, INC., a Delaware
corporation (the "Company"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
The Company desires to issue the redeemable warrants (the "Warrants")
described herein. The Warrants will be issued in connection with an offering by
the Company (the "Units Offering") of 50,000 units (the "Units") (subject to
adjustment to up to 57,500 Units in the event that PaineWebber Incorporated (the
"Initial Purchaser") exercises its over-allotment option (the "Over-Allotment
Option") pursuant to the Purchase Agreement dated as of March 27, 1997, between
the Initial Purchaser and the Company) each consisting of (i) 12% Senior Secured
Notes Due 2002 with a principal amount at maturity of $1,000 (collectively, the
"Notes") and (ii) one Warrant. Each Warrant will entitle the holder thereof
(the "Holder") to purchase 126.26 shares of common stock, par value, $0.01 per
share of the Company ("Common Stock"), subject to adjustment as provided herein.
In connection with the sale of the Units, 50,000 Warrants (subject to adjustment
in the event that the Initial Purchaser exercises the Over-Allotment Option)
will be issued to the purchasers of the Units which 50,000 Warrants will
initially entitle the Holders thereof to purchase in the aggregate 6,313,000
shares of Common Stock.
The Warrants and Notes will not be separately transferable until the
earliest of (i) June 29, 1997, (ii) the date on which an exchange offer
registration statement or a shelf registration statement for the Notes is
declared effective by the Securities and Exchange Commission or (iii) such date
as PaineWebber Incorporated shall determine (the "Separation Date").
The Company further desires the Warrant Agent to act on behalf of the
Company in connection with the issuance of the Warrants as provided herein and
the Warrant Agent is willing to so act.
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of Warrants:
ARTICLE 1
DEFINITIONS
-----------
SECTION 1.01. Definitions.
-----------
"Affiliate" of any Person means (i) any other Person which, directly
or indirectly, is in control of, is controlled by or is under common control
with such Person, or (ii) any other Person who is a director or executive
officer (A) of such Person, (B) of any subsidiary of such Person or (C) of any
Person described in clause (i) above. For purposes hereof, (a) "control" of a
Person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise and
(b) beneficial ownership of 5%
1
or more of the voting common equity (on a fully diluted basis) or warrants to
purchase such equity (whether or not currently exercisable) of a Person shall be
deemed to be in control of such Person; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board" means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means each day that is not a Saturday, a Sunday or a
day on which banking institutions are not required to be open in the State of
New York.
"Combination" means an event in which the Company consolidates with,
merges with or into, or sells all or substantially all of its assets to another
Person.
"Current Market Value" per share of Common Stock or any other security
at any date means (i) if the security is not registered under the Exchange Act,
(a) the value of the security, determined in good faith by the Board and
certified in a board resolution, based on the most recently completed arm's-
length transaction between the Company and a Person other than an Affiliate of
the Company and the closing of which occurs on such date or shall have occurred
within the six-month period preceding such date, or (b) if no such transaction
shall have occurred on such date or within such six-month period, the value of
the security as determined by an independent financial expert or (ii) if the
security is registered under the Exchange Act, the average of the daily closing
prices (or the equivalent in an over-the-counter market) for each Business Day
during the period commencing 15 Business Days before such date and ending on the
date one day prior to such date, or if the security has been registered under
the Exchange Act for less than 15 consecutive Business Days before such date,
the average of the daily closing bid prices (or such equivalent) for all of the
Business Days before such date for which daily closing bid prices are available;
provided, however, that if the closing bid price is not determinable for at
least ten Business Days in such period, the "Current Market Value" of the
security shall be determined as if the security were not registered under the
Exchange Act.
"DTC" means The Depository Trust Company, or any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Date" means, for a given Warrant, the day on which such
Warrant is exercised pursuant to Section 3.04.
"Indenture" means the Indenture dated as of March 31, 1997, from the
Company to the Trustee, with respect to the Notes, as it may be amended or
supplemented from time to time.
"Issue Date" means the date on which Warrants are initially issued.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Company.
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"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"SEC" means the Securities and Exchange Commission, or any successor
agency or body performing substantially similar functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Trustee" means First Security Bank, National Association or any
successor trustee under the Indenture.
"Warrant Certificates" mean the registered certificates (including
without limitation, the global certificates) issued by the Company under this
Agreement representing the Warrants.
"Warrant Shares" mean the shares of Common Stock (and any other
securities) for which the Warrants are exercisable.
SECTION 1.02. Other Definitions.
------------------ Defined in
Term Section
---- ----------
"Agreement"................................................ Recitals
"Certificate Register"..................................... 2.04
"Common Stock"............................................. Recitals
"Company".................................................. Recitals
"Delivering Seller......................................... 5.05
"Employee Preferred Stock"................................. 4.04
"ESIP"..................................................... 4.04
"Exempted Issuances"....................................... 4.04
"Exercise Price"........................................... 3.01
"Expiration Date".......................................... 3.02(b)
"Holders".................................................. Recitals
"KESIP".................................................... 4.04
"Notes".................................................... Recitals
"Notice of Redemption"..................................... 3.09
"Redemption Date".......................................... 3.09
"Redemption Price.......................................... 3.09
"Registrar"................................................ 3.07
"Rights.................................................... 4.02
"Rights Agreement.......................................... 4.02
"Separability Legend"...................................... 2.02(b)
"Separation Date".......................................... Recitals
"Successor Company"........................................ 4.05(a)
3
"Transfer Agent"........................................... 3.05
"Transfer Restricted Warrant".............................. 5.08
"Transfer Restricted Warrant Share"........................ 5.08
"Units".................................................... Recitals
"Warrant Agent"............................................ Recitals
"Warrant Liquidated Damages"............................... 5.08
"Warrant Registration Default"............................. 5.08
"Warrants"................................................. Recitals
"Warrant Shelf Registration Statement"..................... 5.01
SECTION 1.03. Rules of Construction. Unless the text otherwise
----------------------
requires:
(i) a defined term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
ARTICLE 2
WARRANT CERTIFICATES
--------------------
SECTION 2.01. Form and Dating. Each Warrant Certificate shall be
---------------
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Agreement. The Warrant Certificates may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company) and
shall bear the legends required by Section 2.02. Each Warrant Certificate shall
be dated the date of its countersignature. The terms of the Warrant Certificate
set forth in Exhibit A are part of the terms of this Agreement.
SECTION 2.02 Legends. (a) Each Warrant Certificate shall bear the
-------
following legend:
"THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE COMPANY
FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ANY APPLICABLE STATE SECURITIES
4
LAWS OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS. ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO
EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE
TIME OF EXERCISE, (i) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT RELATING TO THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAS BEEN FILED
WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED
BY THE SEC, OR (ii) THE ISSUANCE OF SUCH SHARES IS PERMITTED
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS."
(b) Each Warrant Certificate issued prior to the Separation Date shall
bear the following legend (the "Separability Legend"):
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE WERE INITIALLY
ISSUED AS PART OF AN ISSUANCE OF UNITS, EACH OF WHICH
CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF 12%
SENIOR SECURED NOTES DUE 2002 OF TRANS WORLD AIRLINES, INC.
(THE "NOTES") AND ONE WARRANT. PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EARLIEST OF (i) JUNE 29, 1997, (ii) THE
DATE ON WHICH AN EXCHANGE OFFER REGISTRATION STATEMENT OR A
SHELF REGISTRATION STATEMENT FOR THE NOTES IS DECLARED
EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION OR (iii)
SUCH EARLIER DATE AS PAINEWEBBER INCORPORATED MAY, IN ITS
DISCRETION, DEEM APPROPRIATE, THE WARRANTS REPRESENTED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
TOGETHER WITH, THE NOTES."
(c) Each Warrant Certificate issued prior to the second anniversary of
the original issuance of the Units, unless otherwise agreed by the Company and
the Holder thereof, shall bear the following legends:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT,
OR ANY STATE SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
5
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
"THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE WHICH IS THE DATE WHICH IS TWO YEARS AFTER THE
LATER OF THE DATE OF ORIGINAL ISSUANCE AND THE LAST DATE ON WHICH THE
CORPORATION OR ANY AFFILIATE OF THE CORPORATION WAS THE OWNER OF THESE
SECURITIES (OR ANY PREDECESSOR OF THESE SECURITIES) ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE CORPORATION'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE, OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THESE SECURITIES IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE."
(d) Each Warrant Certificate issued in global form and deposited with
DTC shall bear the following legends:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
6
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN."
"TRANSFERS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
WARRANT AGREEMENT REFERRED TO HEREIN."
(e) Each Warrant issued in definitive form will also bear the
following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS."
"BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S."
SECTION 2.03. Execution and Countersignature. Two Officers shall sign
-----------------------------
the Warrant Certificates for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Warrant Certificate and may be in facsimile form. If an Officer whose signature
is on a Warrant Certificate no longer holds that office at the time the Warrant
Agent countersigns the Warrant Certificate, the Warrant Certificate shall
nevertheless be valid. A Warrant Certificate shall not be valid until an
authorized signatory of the Warrant Agent manually countersigns the Warrant
Certificate. Such authorized signature shall be conclusive evidence that the
Warrant Certificate has been countersigned under this Agreement.
The Warrant Agent shall initially countersign and deliver Warrant
Certificates entitling the Holders thereof to purchase in the aggregate not more
than 6,313,000 Warrant
7
Shares upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company.
The Warrant Agent may appoint an agent reasonably acceptable to the
Company to countersign the Warrant Certificates. Unless limited by the terms of
such appointment, such agent may countersign Warrant Certificates whenever the
Warrant Agent may do so. Each reference in this Agreement to countersignature
by the Warrant Agent includes countersignature by such agent. Such agent will
have the same rights as the Warrant Agent for service of notices and demands.
SECTION 2.04. Certificate Register. The Warrant Agent shall keep a
-------------------
register ("Certificate Register") of the Warrant Certificates and of their
transfer and exchange. The Certificate Register shall show the names and
addresses of the respective Holders and the date and number of Warrants
represented on the face of each Warrant Certificate. The Company and the
Warrant Agent may deem and treat the Person in whose name a Warrant Certificate
is registered as the absolute owner of such Warrant Certificate for all purposes
whatsoever and neither the Company nor the Warrant Agent shall be affected by
notice to the contrary.
SECTION 2.05. Separation of Warrants and Notes. (a) Prior to the
--------------------------------
Separation Date, no Warrant may be sold, assigned or otherwise transferred to
any Person unless, simultaneously with such transfer, the Warrant Agent receives
confirmation from the Trustee for the Notes that the Holder thereof has
requested a transfer of the related Notes to the same transferee.
(b) On or after the Separation Date, the holder of a Warrant
Certificate containing a Separability Legend may surrender such Warrant
Certificate accompanied by a written application to the Warrant Agent, duly
executed by the Holder thereof, for a new Warrant Certificate or certificates
not containing the Separability Legend.
SECTION 2.06. Transfer and Exchange. The Warrant Certificates shall
---------------------
be issued in registered form only and shall be transferable only upon the
surrender of such Warrant Certificate for registration of transfer. When a
Warrant Certificate is presented to the Warrant Agent with a request to register
a transfer, the Warrant Agent shall register the transfer as requested if the
reasonable requirements of the Warrant Agent and of Section 8-401(1) of the
Uniform Commercial Code as in effect in the State of New York are met; provided,
however, that prior to the Separation Date the Warrant Agent shall not register
a transfer of a Warrant Certificate and such transfer will be void and of no
effect unless the Notes that are a part of the same Unit as the Warrants
represented by the Warrant Certificate to be transferred are simultaneously
transferred to the same transferee. To permit the registration of transfers and
exchanges, the Company shall execute and the Warrant Agent shall countersign
Warrant Certificates at the Warrant Agent's request. All Warrant Certificates
issued upon any registration of transfer or exchange of Warrant Certificates
shall be valid obligations of the Company, entitled to the same benefits under
this Agreement as the Warrant Certificates surrendered upon such registration of
transfer or exchange. No service charge will be made to a Holder for any
registration of transfer or exchange upon surrender of any Warrant Certificate
at the office of the
8
Warrant Agent maintained for that purpose. However, the Company may require
payment of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Warrant Certificates but not for any exchange or original issuance
(not involving a transfer) pursuant to Section 2.08, 3.04 or 3.05.
SECTION 2.07. Replacement Certificates. If a mutilated Warrant
------------------------
Certificate is surrendered to the Warrant Agent or if the Holder of a Warrant
Certificate claims that the Warrant Certificate has been lost, destroyed or
wrongfully taken, the Company shall issue and the Warrant Agent shall
countersign a replacement Warrant Certificate if the reasonable requirements of
the Warrant Agent and of Section 8-405 of the Uniform Commercial Code as in
effect in the State of New York are met. If required by the Warrant Agent or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the Warrant Agent to protect the Company and the Warrant
Agent from any loss which either of them may suffer if a Warrant Certificate is
replaced. The Company and the Warrant Agent may charge the Holder for their
expenses in replacing a Warrant Certificate. Every replacement Warrant
Certificate is an additional obligation of the Company.
SECTION 2.08. Temporary Certificates. Until definitive Warrant
----------------------
Certificates are ready for delivery, the Company may prepare and the Warrant
Agent shall countersign temporary Warrant Certificates. Temporary Warrant
Certificates shall be substantially in the form of definitive Warrant
Certificates but may have variations that the Company considers appropriate for
temporary Warrant Certificates. Without unreasonable delay, the Company shall
prepare and the Warrant Agent shall countersign definitive Warrant Certificates
and deliver them in exchange for temporary Warrant Certificates.
SECTION 2.09. Cancellation. (a) In the event the Company shall
------------
purchase or otherwise acquire Warrant Certificates, the same shall thereupon be
delivered to the Warrant Agent for cancellation.
(b) The Warrant Agent and no one else shall cancel and destroy all
Warrant Certificates surrendered for transfer, exchange, replacement, exercise
or cancellation and deliver a certificate of such destruction to the Company
unless the Company directs the Warrant Agent to deliver canceled Warrant
Certificates to the Company. The Company may not issue new Warrant Certificates
to replace Warrant Certificates to the extent they represent Warrants which have
been exercised or Warrants which the Company has purchased or otherwise
acquired.
ARTICLE 3
EXERCISE TERMS
--------------
SECTION 3.01. Exercise Price. Each Warrant shall initially entitle
--------------
the Holder thereof, subject to adjustment pursuant to the terms of this
Agreement, to purchase 126.26 shares of Common Stock for a per share exercise
price (the "Exercise Price") of $7.92.
9
SECTION 3.02. Exercise Periods. (a) Subject to the terms and
----------------
conditions set forth herein, the Warrants shall be exercisable at any time or
from time to time on or after March 31, 1998; provided, however, that Holders of
Warrants will be able to exercise their Warrants only if (i) the Warrant Shelf
Registration Statement is effective, or (ii) the exercise of such Warrants is
exempt from the registration requirements of the Securities Act, and the Warrant
Shares are qualified for sale or exempt from qualification under the applicable
securities laws of the states or other jurisdictions in which such holders
reside.
(b) No Warrant shall be exercisable after the earlier of 5:00 p.m. New
York City time on (i) April 1, 2002 (the "Expiration Date"), or (ii) if the
Company exercises its right to redeem such Warrant pursuant to Section 3.09
hereof and has deposited with the Warrant Agent in accordance with Section
3.09(c) hereof, cash or an irrevocable letter of credit issued by a national or
state bank sufficient in amount to purchase all of the Warrants stated in the
applicable Notice of Redemption (as defined in Section 3.09) given to the
Warrant Agent, the applicable Redemption Date (as defined in Section 3.09).
SECTION 3.03. Expiration. Each Warrant shall terminate and become
----------
void as of the earliest of (i) the close of business on the Expiration Date,
(ii) the date such Warrant is exercised or (iii) the date on which the
Redemption Price (as defined in Section 3.09) with respect to such Warrant is
paid to the Holder thereof. The Company shall give notice not less than 90 and
not more than 120 days prior to the Expiration Date to the Holders of all then
outstanding Warrants to the effect that the Warrants will terminate and become
void as of the close of business on the Expiration Date; provided, however, that
if the Company fails to give notice as provided in this Section 3.03, the
Warrants will nevertheless expire and become void on the Expiration Date.
SECTION 3.04. Manner of Exercise. Warrants may be exercised upon (i)
------------------
surrender to the Warrant Agent at the office of the Warrant Agent of the related
Warrant Certificate, together with the form of election to purchase Common Stock
on the reverse thereof duly filled in and signed by the Holder thereof, and (ii)
payment to the Warrant Agent, for the account of the Company, of the Exercise
Price for each Warrant Share issuable upon the exercise of such Warrants then
exercised. Such payment shall be made at the option of the Holder either (x) in
cash or by certified or official bank check payable to the order of the Company
or by wire transfer of funds to an account designated by the Company for such
purpose or (y) prior to the maturity date of the Notes, by the surrender to the
Company for cancellation of Notes with a principal amount equal to the aggregate
Exercise Price for all shares issuable upon exercise of such Warrant. If
payment of the Exercise Price is to be made by the cancellation of Notes, the
holder of such Note shall not be entitled to receive or otherwise be credited
with, and by surrendering such Note for cancellation expressly waives any and
all rights to receive or otherwise be credited with, any accrued but unpaid
interest on, or liquidated damages with respect to, such tendered Note. Subject
to the provisions of this Warrant Agreement, the rights represented by the
Warrants shall be exercisable at the election of the Holders thereof either in
full at any time or from time to time in part and in the event that a Warrant
Certificate is surrendered for exercise of less than all the Warrants
represented by such Warrant Certificate at any time prior to the Expiration
Date, a new Warrant Certificate representing the remaining
10
Warrants shall be issued. The Warrant Agent shall countersign and deliver the
required new Warrant Certificates, and the Company, at the Warrant Agent's
request, shall supply the Warrant Agent with Warrant Certificates duly signed on
behalf of the Company for such purpose. The Warrant Agent shall account promptly
to the Company with respect to all Warrants exercised, and shall concurrently
deliver to the Company all funds or Notes acquired with respect to the purchase
of shares of Common Stock upon exercise of the Warrants.
SECTION 3.05. Issuance of Warrant Shares. Subject to Section 2.07,
--------------------------
upon the surrender of Warrant Certificates and payment of the per share Exercise
Price, as set forth in Section 3.04, the Company shall issue and cause the
Warrant Agent or, if appointed, a transfer agent for the Common Stock ("Transfer
Agent") to countersign and deliver to or upon the written order of the Holder
and in such name or names as the Holder may designate a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrants or other securities or property to which it is
entitled, registered or otherwise, to the Person or Persons entitled to receive
the same, together with cash as provided in Section 3.06 in respect of any
fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any Person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrant
Certificates and payment of the per share Exercise Price, as aforesaid;
provided, however, that if, at such date, the transfer books for the Warrant
Shares shall be closed, the certificates for the Warrant Shares in respect of
which such Warrants are then exercised shall be issuable as of the date on which
such books shall next be opened and until such date the Company shall be under
no duty to deliver any certificates for such Warrant Shares; provided further,
however, that such transfer books, unless otherwise required by law, shall not
be closed at any one time for a period longer than 20 calendar days.
SECTION 3.06. Fractional Warrant Shares. The Company shall not be
-------------------------
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be exercised in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrant
Shares purchasable pursuant thereto. If any fraction of a Warrant Share would,
except for the provisions of this Section 3.06, be issuable on the exercise of
any Warrant (or specified portion thereof), the Company shall pay an amount in
cash equal to the Current Market Value per Warrant Share, as determined on the
trading day immediately preceding the date the Warrant is exercised, multiplied
by such fraction, computed to the nearest whole cent. Each Holder, by
acceptance of a Warrant Certificate, expressly waives any and all rights to
receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
SECTION 3.07. Reservation of Warrant Shares. The Company shall at
-----------------------------
all times keep reserved out of its authorized shares of Common Stock a number of
shares of Common Stock sufficient to provide for the exercise of all outstanding
Warrants. The registrar for the Common Stock (the "Registrar") shall at all
times until the Expiration Date reserve such number of authorized shares as
shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent. The Company covenants that all
Warrant Shares
11
which may be issued upon exercise of Warrants shall, upon the payment of the
Exercise Price and issue in accordance with the terms of this Warrant Agreement,
be fully paid, nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests, created by or through the Company with
respect to the issue thereof. The Company will supply such Transfer Agent with
duly executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section
3.06. The Company will furnish to such Transfer Agent a copy of all notices of
adjustments (and certificates related thereto) transmitted to each Holder.
Before taking any action which would cause an adjustment pursuant to
Article 4 to reduce the Exercise Price below the then par value (if any) of the
Common Stock, the Company shall take any and all corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock at the
Exercise Price as so adjusted.
SECTION 3.08. Compliance with Law. Notwithstanding anything in this
-------------------
Agreement to the contrary, in no event shall a Holder be entitled to exercise a
Warrant unless (i) a registration statement filed under the Securities Act in
respect of the issuance of the Warrant Shares is then effective or (ii) (A) in
the opinion of counsel to the Company addressed to the Warrant Agent the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the States or other
jurisdictions in which such holders reside and (B) each certificate for Warrant
Shares issued upon such exercise shall bear the legend set forth in Section
2.02(c) hereof unless otherwise agreed by the Company and the Holder.
SECTION 3.09. Redemption of Warrants.
------------------------
(a) Commencing on April 1, 2000, the Warrants shall be redeemable in
whole or in part by the Company at a price of $.01 per Warrant (the "Redemption
Price"), upon not less than 20 nor more than 60 days' prior written notice
thereof (the date set for redemption in such notice being a "Redemption Date"),
if the closing price of a share of Common Stock on the American Stock Exchange
(or such other national securities exchange or the National Association of
Securities Dealers' Automated Quotation National Market, as shares of Common
Stock may then be listed or admitted for trading) exceeds 125% of the then
effective Exercise Price for at least 20 trading days out of a period of 30
consecutive trading days ending not more than 10 calendar days prior to the date
of such notice. If the Company shall determine to redeem less than all of the
Warrants then outstanding, the Warrant Agent shall determine the Warrants to be
redeemed by such manner or method as it shall deem fair and appropriate. In the
event that the Company exercises its right to redeem any or all of the Warrants,
such Warrants will be exercisable until 5:00 p.m., New York City time, on the
applicable Redemption Date.
(b) The Company shall give notice to the Warrant Agent of any
redemption (a "Notice of Redemption") in sufficient time so that the Warrant
Agent shall give the Notice of Redemption to all Holders of Warrants, to be
redeemed at least 20 days prior to the applicable Redemption Date. Each Notice
of Redemption shall: (a) specify the Redemption Date and the
12
Redemption Price, (b) state that payment of the Redemption Price will be made by
the Warrant Agent upon presentation and surrender, to the Warrant Agent of the
Warrant Certificates representing the Warrants being redeemed; (c) state the
right to exercise the Warrants shall terminate at 5:00 p.m., New York time, on
the applicable Redemption Date; and (d) if less than all of the Warrants are to
be redeemed, specify the serial numbers or portions of the Warrants to be
redeemed. The Company shall also make a prompt public announcement of such
redemption of publication in The Wall Street Journal at the time of the Warrant
Agent's mailing of the Notice of Redemption.
(c) On or prior to the opening of business on the Redemption Date, the
Company shall deposit with the Warrant Agent cash, or an irrevocable letter of
credit issued by a national or state bank and in form reasonably satisfactory to
the Warrant Agent, sufficient in amount to purchase all of the Warrants stated
in the Notice of Redemption to be redeemed. Payment of the Redemption Price
shall be made by the Warrant Agent upon presentation and surrender of the
Warrant Certificates representing such Warrants for which Notice of Redemption
shall have been duly given and if the Company shall have duly deposited with the
Warrant Agent the cash or irrevocable letter of credit required by this Section
3.09, then any Warrants not exercised in accordance with Section 3.04 by 5:00
p.m. New York time, on the Redemption Date shall no longer be deemed to be
outstanding, and the Holders thereof will be entitled to receive only the
Redemption Price with respect to such Warrants without interest.
ARTICLE 4
ANTIDILUTION PROVISIONS
-----------------------
SECTION 4.01. Changes in Common Stock. In the event that at any time
-----------------------
or from time to time the Company shall (i) pay a dividend or make a distribution
to all holders of its Common Stock in shares of its Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) increase or decrease the number of
shares of Common Stock outstanding by reclassification of its Common Stock, then
the number of shares of Common Stock issuable upon exercise of each Warrant
immediately after the happening of such event shall be adjusted to a number
determined by multiplying the number of shares of Common Stock that such holder
would have owned or have been entitled to receive upon exercise had such
Warrants been exercised immediately prior to the happening of the events
described above (or, in the case of a dividend or distribution of Common Stock
or other shares of capital stock, immediately prior to the record date therefor)
by a fraction, the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after the happening of the events described
above and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the happening of the events described
above; and subject to Section 4.08 the Exercise Price for each Warrant shall be
adjusted to a number determined by dividing the Exercise Price immediately prior
to such event by such fraction. An adjustment made pursuant to this Section
4.01 shall become effective immediately after the effective date of such event,
retroactive to the record date
13
therefor in the case of a dividend or distribution in shares of Common Stock or
other shares of the Company's capital stock.
SECTION 4.02. Cash Dividends and Other Distributions. In the event
--------------------------------------
that at any time or from time to time the Company shall distribute to all
holders of Common Stock (i) any dividend or other distribution of cash,
evidences of its indebtedness, shares of its capital stock or any other
properties or securities or (ii) any options, warrants or other rights to
subscribe for or purchase any of the foregoing (other than, in each case, (v)
the issuance of any stock purchase rights ("Rights") under the Rights Agreement
dated as of December 19, 1995 (the "Rights Agreement") between the Company and
American Stock Transfer and Trust Company, as Rights Agent, (w) the issuance of
any shares of the Company's Series A Participating Cumulative Preferred Stock,
par value $.01 per share upon exercise of Rights, (x) any dividend or
distribution described in Section 4.01, (y) any rights, options, warrants or
securities described in Section 4.03 and (z) any cash dividends or other cash
distributions from current or retained earnings), then the number of shares of
Common Stock issuable upon the exercise of each Warrant shall be increased to a
number determined by multiplying the number of shares of Common Stock issuable
upon the exercise of such Warrant immediately prior to the record date for any
such dividend or distribution by a fraction, the numerator of which shall be the
Current Market Value per share of Common Stock on the record date for such
dividend or distribution and the denominator of which shall be such Current
Market Value per share of Common Stock on the record date for such dividend or
distribution less the sum of (x) the amount of cash, if any, distributed per
share of Common Stock and (y) the fair value (as determined in good faith by the
Board, whose determination shall be evidenced by a board resolution filed with
the Warrant Agent, a copy of which will be sent to Holders upon request) of the
portion, if any, of the distribution applicable to one share of Common Stock
consisting of evidences of indebtedness, shares of stock, securities, other
property, warrants, options or subscription or purchase rights; and subject to
Section 4.08 the Exercise Price shall be adjusted to a number determined by
dividing the Exercise Price immediately prior to such record date by the above
fraction. Such adjustments shall be made whenever any distribution is made and
shall become effective as of the date of distribution, retroactive to the record
date for any such distribution. No adjustment shall be made pursuant to this
Section 4.02 which shall have the effect of decreasing the number of shares of
Common Stock issuable upon exercise of each Warrant or increasing the Exercise
Price.
SECTION 4.03. Rights Issue. In the event that at any time or from
------------
time to time the Company shall issue rights, options or warrants entitling the
holders thereof to subscribe for shares of Common Stock, or securities
convertible into or exchangeable or exercisable for Common Stock to all holders
of Common Stock without any charge, entitling such holders to subscribe for or
purchase shares of Common Stock at a price per share that is lower at the record
date for such issuance than the then Current Market Value per share of Common
Stock, the number of shares of Common Stock issuable upon the exercise of each
Warrant shall be increased to a number determined by multiplying the number of
shares of Common Stock theretofore issuable upon exercise of each Warrant by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, options, warrants or
securities plus the number of additional shares of Common Stock offered for
14
subscription or purchase or into or for which such securities that are issued
are convertible, exchangeable or exercisable, and the denominator of which shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights, options, warrants or securities plus the total number of shares of
Common Stock which the aggregate consideration expected to be received by the
Company (assuming the exercise or conversion of all such rights, options,
warrants or securities) would purchase at the then Current Market Value per
share of Common Stock. Subject to Section 4.08, in the event of any such
adjustment, the Exercise Price shall be adjusted to a number determined by
dividing the Exercise Price immediately prior to such date of issuance by the
aforementioned fraction. Such adjustment shall be made immediately after such
rights, options or warrants are issued and shall become effective, retroactive
to the record date for the determination of stockholders entitled to receive
such rights, options, warrants or securities. No adjustment shall be made
pursuant to this Section 4.03 which shall have the effect of decreasing the
number of shares of Common Stock purchasable upon exercise of each Warrant or of
increasing the Exercise Price.
SECTION 4.04 Issuance of Common Stock or Rights. In the event that
----------------------------------
at any time or from time to time the Company shall issue (i) shares of Common
Stock (subject to the provisions below), (ii) rights, options or warrants
entitling the holders thereof to subscribe for shares of Common Stock, or (iii)
securities convertible into or exchangeable or exercisable for Common Stock (in
each case, other than, in connection with the issuance of shares of Common Stock
or securities exchangeable for or convertible into shares of Common Stock (x)
upon conversion or exercise of the Company's 8% Preferred Stock, ALPA Preferred
Stock, IAM Preferred Stock, IFFA Preferred Stock (collectively, the "Employee
Preferred Stock") or options granted pursuant to the Company's 1995 Outside
Directors' Stock Ownership and Stock Option Plan, 1994 Key Employee Stock
Incentive Plan (the "KESIP"), or Employee Stock Incentive Plan (the "ESIP"), in
each case which are issued and outstanding as of the date hereof, (y) pursuant
to one or more programs providing for the exchange by the Company of 12% Reset
Notes for shares of Common Stock (where the applicable exchange ratio from time
to time is based upon a discount from the Current Market Value at the time of
exchange not to exceed 15%) or (z) pursuant to the exercise of certain
additional stock purchase rights under the ESIP providing for the aggregate
purchase of additional shares of Common Stock or Employee Preferred Stock (not
to exceed an additional aggregate amount of 2% of the then outstanding Common
Stock and Employee Preferred Stock over a seven year period) for a per share
purchase price not less than 20% below the Current Market Value at the time of
issuance, each of the issuances described in clauses (x), (y) and (z) being
collectively, the "Exempted Issuances") at a price per share at the record date
of such issuance that is less than the then Current Market Value per share of
Common Stock, the number of shares of Common Stock issuable upon the exercise of
each Warrant shall be increased to a number determined by multiplying the number
of shares of Common Stock theretofore issuable upon exercise of each Warrant by
a fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately after such sale or issuance plus the number of
additional shares of Common Stock offered for subscription or purchase or into
or for which such securities that are issued are convertible, exchangeable or
exercisable, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
total number of shares of Common Stock which the aggregate consideration
expected to be received by the
15
Company (assuming the exercise or conversion of all such rights, options,
warrants or securities, if any) would purchase at the then Current Market Value
per share of Common Stock; and subject to Section 4.08 the Exercise Price shall
be adjusted to a number determined by dividing the Exercise Price immediately
prior to such date of issuance by the aforementioned fraction. Such adjustments
shall be made whenever such rights, options or warrants or convertible
securities are issued. No adjustment shall be made pursuant to this Section 4.04
which shall have the effect of decreasing the number of shares of Common Stock
issuable upon exercise of each warrant or of increasing the Exercise Price.
SECTION 4.05. Combination; Liquidation. (a) Except as provided in
------------------------
Section 4.05(b), in the event of a Combination, each Holder shall have the right
to receive upon exercise of the Warrants the kind and amount of shares of
capital stock or other securities or property which such Holder would have been
entitled to receive upon or as a result of such Combination had such Warrant
been exercised immediately prior to such event. Unless paragraph (b) is
applicable to a Combination, the Company shall provide that the surviving or
acquiring Person (the "Successor Company") in such Combination will enter into
an agreement with the Warrant Agent confirming the Holders' rights pursuant to
this Section 4.05(a) and providing for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
4. The provisions of this Section 4.05(a) shall similarly apply to successive
Combinations involving any Successor Company.
(b) In the event of (i) a Combination where consideration to the
holders of Common Stock in exchange for their shares is payable solely in cash
or (ii) the dissolution, liquidation or winding-up of the Company, the holders
of the Warrants shall be entitled to receive, upon surrender of their Warrant
Certificates, distributions on an equal basis with the holders of Common Stock
or other securities issuable upon exercise of the Warrants, as if the Warrants
had been exercised immediately prior to such event, less the Exercise Price.
In case of any Combination described in this Section 4.05(b), the surviving or
acquiring Person and, in the event of any dissolution, liquidation or winding-up
of the Company, the Company, shall deposit promptly with the Warrant Agent the
funds, if any, necessary to pay to the holders of the Warrants the amounts to
which they are entitled as described above. After such funds and the
surrendered Warrant Certificates are received, the Warrant Agent is required to
deliver a check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is appropriate) to
such Person or Persons as it may be directed in writing by the Holders
surrendering such Warrants.
SECTION 4.06. Other Events. If any event occurs as to which the
------------
foregoing provisions of this Article 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly
and adequately protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then such Board shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the
good faith opinion of such Board, to protect such purchase rights as aforesaid,
but in no event shall any such adjustment have the effect of increasing the
Exercise Price or decreasing the number of shares of Common Stock issuable upon
exercise of any Warrant.
16
SECTION 4.07. Superseding Adjustment. Upon the expiration of any
----------------------
rights, options, warrants or conversion or exchange privileges which resulted in
adjustments pursuant to this Article 4, if any thereof shall not have been
exercised, the number of Warrant Shares issuable upon the exercise of each
Warrant shall be readjusted pursuant to the applicable section of Article 4 as
if (A) the only shares of Common Stock issuable upon exercise of such rights,
options, warrants, conversion or exchange privileges were the shares of Common
Stock, if any, actually issued upon the exercise of such rights, options,
warrants or conversion or exchange privileges and (B) shares of Common Stock
actually issued, if any, were issuable for the consideration actually received
by the Company upon such exercise plus the aggregate consideration, if any,
actually received by the Company for the issuance, sale or grant of all such
rights, options, warrants or conversion or exchange privileges whether or not
exercised and the Exercise Price shall be readjusted inversely; provided,
however, that no such readjustment shall (except by reason of an intervening
adjustment under Section 4.01) have the effect of decreasing the number of
Warrant Shares purchasable upon the exercise of each Warrant or increase the
Exercise Price by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.
SECTION 4.08. Minimum Adjustment. The adjustments required by the
------------------
preceding Sections of this Article 4 shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the number of shares of Common Stock issuable upon
exercise of Warrants that would otherwise be required shall be made unless and
until such adjustment either by itself or with other adjustments not previously
made increases or decreases by at least 1% the Exercise Price or the number of
shares of Common Stock issuable upon exercise of Warrants immediately prior to
the making of such adjustment. Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Article 4 and not
previously made, would result in a minimum adjustment. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence. In computing adjustments under this
Article 4, fractional interests in Common Stock shall be taken into account to
the nearest one-hundredth of a share.
SECTION 4.09. Notice of Adjustment. Upon any adjustment of the
--------------------
Exercise Price or the number of shares of Common Stock and other property, if
any, issuable upon exercise of the Warrants, the Company shall promptly
thereafter give a written certificate of the Company to the Warrant Agent of
such adjustment or adjustments. In addition, the Company at its sole expense
shall, within 90 calendar days following the end of each fiscal year of the
Company during which any Warrants remaining outstanding, cause to be delivered
to the Warrant Agent a certificate of a firm of independent accountants selected
by the Board (who may be the regular accountants employed by the Company)
setting forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated (including a description of the
basis on which (i) the Board determined the fair value of any evidences of
indebtedness, other securities or property or warrants, options or other
subscription or purchase rights and (ii) the Current Market Value of the Common
Stock was determined, if
17
either of such determinations were required), and specifying the Exercise Price
and the number of shares of Common Stock issuable upon exercise of Warrants
after giving effect to such adjustment. The Company shall promptly cause the
Warrant Agent to mail a copy of such certificate to each Holder in accordance
with Section 7.06. The Warrant Agent shall be entitled to rely on such
certificate and shall be under no duty or responsibility with respect to any
such certificate, except to exhibit the same from time to time, to any Holder
desiring an inspection thereof during reasonable business hours. The Warrant
Agent shall not at any time be under any duty or responsibility to any Holder to
determine whether any facts exist which may require any adjustment of the
Exercise Price or the number of shares of Common Stock or other stock or
property issuable on exercise of the Warrants, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment or the validity or value of any shares of Common
Stock, evidences of indebtedness, warrants, options, or other securities or
property.
SECTION 4.10. Notice of Certain Transactions. In the event that the
------------------------------
Company shall propose to (a) pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other non-cash dividend or
distribution to the holders of its Common Stock, (b) offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) issue any (i) shares of Common Stock, (ii)
rights, options or warrants entitling the holders thereof to subscribe for
shares of Common Stock, or (iii) securities convertible into or exchangeable or
exercisable for Common Stock (in each case, other than, in connection with the
issuance of Exempted Securities), (d) effect any capital reorganization,
reclassification, consolidation or merger, (e) effect the voluntary or
involuntary dissolution, liquidation or winding-up of the Company or (f) make a
tender offer or exchange offer with respect to the Common Stock, the Company
shall within 5 days send to the Warrant Agent and the Warrant Agent shall within
5 days send the Holders a notice (in such form as shall be furnished to the
Warrant Agent by the Company) of such proposed action or offer, unless the
giving of such notice would cause the Company to be in violation of any
applicable law or regulation. Such notice shall be mailed by the Warrant Agent
to the Holders at their addresses as they appear in the Certificate Register,
which shall specify the record date for the purposes of such dividend,
distribution or rights, or the date such issuance or event is to take place and
the date of participation therein by the holders of Common Stock, if any such
date is to be fixed, and shall briefly indicate the effect of such action on the
Common Stock and on the number and kind of any other shares of stock and on
other property, if any, and the number of shares of Common Stock and other
property, if any, issuable upon exercise of each Warrant and the Exercise Price
after giving effect to any adjustment pursuant to Article 4 which will be
required as a result of such action. Such notice shall be given as promptly as
possible and (x) in the case of any action covered by clause (a) or (b) above,
at least 10 days prior to the record date for determining holders of the Common
Stock for purposes of such action or (y) in the case of any other such action,
at least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of Common Stock, whichever shall be
the earlier.
SECTION 4.11. Adjustment to Warrant Certificate. The form of Warrant
---------------------------------
Certificate need not be changed because of any adjustment made pursuant to this
Article 4, and
18
Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock issuable upon
exercise of the Warrants as are stated in the Warrant Certificates initially
issued pursuant to this Agreement. The Company, however, may at any time in its
sole discretion make any change in the form of Warrant Certificate that it may
deem appropriate to give effect to such adjustments and that does not affect the
substance of the Warrant Certificate, and any Warrant Certificate thereafter
issued or countersigned, whether in exchange or substitution for an outstanding
Warrant Certificate or otherwise, may be in the form as so changed.
ARTICLE 5
REGISTRATION RIGHTS
-------------------
SECTION 5.01. Effectiveness of Registration Statement. Subject to
---------------------------------------
Section 5.02, the Company shall use its best efforts to cause to be filed
pursuant to Rule 415 (or any successor provision) of the Securities Act not
later than 60 days after the Issue Date, a shelf registration statement relating
to the offer and sale of the Warrants and the Warrant Shares by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such registration statement and covering the issuance
of Warrant Shares by the Company to the Holders upon exercise of the Warrants
(the "Warrant Shelf Registration Statement"). The Company shall use its
reasonable best efforts to cause the Warrant Shelf Registration Statement to be
declared effective on or before 120 days after the Issue Date, and to cause the
Warrant Shelf Registration Statement to remain effective with respect to the
offer and sale of the Warrants and the Warrant Shares by the Holders thereof
until the latest of (i) such time as all Warrants have been sold thereunder,
(ii) two years after its effective date and (iii) such time as all of the
Warrants and Warrant Shares can be sold by the Holders thereof without
restriction under the Securities Act and with respect to the issuance of Warrant
Shares by the Company to the Holders upon exercise of the Warrants until the
earliest of (x) such time as all of the Warrants have been exercised, (y) the
Expiration Date and (z) in the event that the Company has exercised its right to
redeem all of its then currently outstanding Warrants pursuant to Section 3.09
hereof and has deposited with the Warrant Agent in accordance with Section 3.09
(c) hereof cash or an irrevocable letter of credit issued by a national or state
bank sufficient in amount to purchase all of the then currently outstanding
Warrants, on the business day immediately following the Redemption Date with
respect to all such outstanding Warrants. In connection with the Warrant Shelf
Registration Statement, (i) the Company shall furnish to the Warrant Agent,
prior to the filing with the Commission, a copy of the Warrant Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the prospectus included therein and shall use its
reasonable best efforts to reflect in each such document, when filed with the
Commission, such comments as the Warrant Agent may reasonably propose, (ii) the
Company shall furnish to each Holder, without charge, at least one copy of the
Warrant Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits thereto (including those incorporated by reference), (iii)
the Company shall, for so long as the Warrant Shelf Registration Statement is
effective, deliver to each Holder, without charge,
19
as many copies of the prospectus (including each preliminary prospectus)
included in the Warrant Shelf Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request, and the Company
consents to the proper use of the prospectus therein and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Warrants or the Warrant Shares, as the case may be,
covered by such prospectus and any amendment or supplement thereto, (iv) the
Company may require each Holder of Warrants or Warrant Shares to be sold
pursuant to the Warrant Shelf Registration Statement to furnish to the Company
such information regarding the Holder and the distribution of such Warrants or
Warrant Shares as the Company may from time to time reasonably request for
inclusion in such Registration Statement, (v) the Company shall, if requested,
promptly incorporate in a prospectus supplement or post-effective amendment to
the Warrant Shelf Registration Statement such information as a majority in
interest of the Holders reasonably agree should be included therein and shall
make all required filings of such prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment, (vi) the Company shall enter
into such agreements (including underwriting agreements) as are appropriate,
customary and reasonably necessary in connection with the Warrant Shelf
Registration Statement and (vii) the Company shall (A) make available all
material customary for reasonable due diligence examinations in connection with
the Warrant Shelf Registration Statement, (B) make such representations and
warranties to the Holders of Warrants and Warrant Shares and the underwriters,
if any, as are customary and reasonable in connection with the Warrant Shelf
Registration Statement, (C) obtain such opinions of counsel to the Company
addressed to and reasonably satisfactory to the Holders as are customary and
reasonable in connection with the Warrant Shelf Registration Statements and (D)
obtain such "comfort" letters and updates thereof from the independent certified
public accountants of the Company addressed to the Holders as are customary and
reasonable in connection with the Warrant Shelf Registration Statements. The
Company will furnish the Warrant Agent with current prospectuses meeting the
requirements of the Securities Act in sufficient quantity to permit the Warrant
Agent to deliver, at the Company's expense, a prospectus to each holder of a
Warrant upon the exercise thereof. The Company shall promptly inform the Warrant
Agent of any change in the status of the effectiveness or availability of the
Warrant Shelf Registration Statement.
SECTION 5.02. Suspension. During any consecutive 365-day period, the
----------
Company shall be entitled to suspend the availability of the Warrant Shelf
Registration Statement for up to two 45 consecutive-day periods (except during
the 45 consecutive-day period immediately prior to the Expiration Date) if the
Company's Board determines in the exercise of its reasonable judgment that there
is a valid business purpose for such suspension and provides notice that such
determination was made by the Company's board to the holders of the Warrants:
provided however. that in no event shall the Company be required to disclose
the business purpose for such suspension if the Company determines in good faith
that such business purpose must remain confidential.
SECTION 5.03. Blue Sky. The Company shall use its reasonable best
--------
efforts to register or qualify the Warrants and the Warrant Shares under all
applicable securities laws, blue sky laws or similar laws of all jurisdictions
in the United States in which any Holder of Warrants
20
may or may be deemed to purchase Warrants or Warrant Shares and shall use its
reasonable best efforts to maintain such registration or qualification with
respect to the offer and sale of the Warrants and the Warrant Shares by the
Holders thereof until the latest of (i) such time as all Warrants have been sold
under the Warrant Shelf Registration Statement, (ii) two years after the
effective date of the Warrant Shelf Registration Statement and (iii) such time
as all of the Warrants and Warrant Shares can be sold by the Holders thereof
without restriction under the Securities Act and with respect to the issuance of
Warrant Shares by the Company to the Holders upon exercise of the Warrants until
the earliest of (x) such time as all of the Warrants have been exercised, (y)
the Expiration Date and (z) in the event that the Company has exercised its
right to redeem all of its then currently outstanding Warrants pursuant to
Section 3.09 hereof and has deposited with the Warrant Agent in accordance with
Section 3.09 (c) hereof, cash or an irrevocable letter of credit issued by a
national or state bank sufficient in amount to purchase all of the then
currently outstanding Warrants, on the business day immediately following the
Redemption Date with respect to all such outstanding Warrants; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 5.03 or to take any action which would subject it to
general service of process or to taxation in any such jurisdiction where it is
not then so subject.
SECTION 5.04. Accuracy of Disclosure. The Company represents and
----------------------
warrants to each Holder and agrees for the benefit of each Holder that (i) the
Warrant Shelf Registration Statement and any amendment thereto will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein not misleading; and (ii) the prospectus furnished to such Holder for
delivery in connection with the sale of Warrants, the exercise of Warrants
and/or the sale of Warrant Shares and the documents incorporated by reference
therein will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Company shall have no
liability under clauses (i) or (ii) of this Section 5.04 with respect to any
such untrue statement or omission made in the Warrant Shelf Registration
Statement in reliance upon and in conformity with information furnished to the
Company by or on behalf of the Holders specifically for inclusion therein.
SECTION 5.05. Indemnification. (a) In connection with the Warrant
---------------
Shelf Registration Statement, the Company agrees to indemnify and hold harmless
each Holder of the Warrants and the Warrant Shares and each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange
Act (each Holder and such controlling persons being referred to collectively as
the "indemnified parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof (including but
not limited to any losses, claims, damages, liabilities or actions relating to
purchases and sales of the Warrants or the Warrant Shares) to which each
indemnified party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Warrant Shelf Registration Statement or
prospectus or in any amendment or supplement thereto, or arise out of, or are
based upon the omission or alleged
21
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and shall reimburse the indemnified
parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that (i) the Company
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in the Warrant Shelf
Registration Statement or any preliminary or final prospectus or in any
amendment or supplement thereto in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by or on
behalf of such Holder specifically for inclusion therein, (ii) with respect to
any untrue statement or omission or alleged untrue statement or omission made in
any prospectus relating to the Warrant Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any person as to which there is a prospectus delivery requirement (a
"Delivering Seller") that sold the securities to the person asserting any such
losses, claims, damages or liabilities to the extent that any such loss, claim,
damage or liability of such Delivering Seller results from the fact that there
was not sent or given to such person, on or prior to the written confirmation of
such sale, a copy of the relevant prospectus, as amended and supplemented,
provided that (I) the Company shall have previously furnished copies thereof to
such Delivering Seller in accordance with this Agreement and (II) such furnished
prospectus, as amended and supplemented, would have corrected any such untrue
statement or omission or alleged untrue statement or omission, and (iii) this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such indemnified party. The Company shall also indemnify
underwriters, selling brokers, dealer-managers and similar securities industry
professionals participating in the distribution (in each case as described in
the Warrant Shelf Registration Statement), their officers and directors and each
person who controls such persons within the meaning of the Securities Act or the
Exchange Act to the same extent as provided above with respect to the
indemnification of the Holders of the Warrants and Warrant Shares if requested
by such Holders.
(b) In connection with the Warrant Shelf Registration Statement, each
Holder of the Warrants, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act from and against any
losses, claims, damages or liabilities or any actions in respect thereof to
which the Company or any such controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Warrant Shelf Registration Statement or preliminary or final prospectus or in
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Company for any legal
or other expenses reasonably
22
incurred by the Company or any such controlling person in connection with
investigating or defending any loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
which such Holder may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this section, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above, except to the
extent that it is prejudiced or harmed in any material respect by failure to
give such prompt notice. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with one counsel (and local counsel as
necessary) reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof the indemnifying party will not
be liable to such indemnified party under this section for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof. No indemnifying
party shall, without the prior written consent of the indemnified party, not to
be unreasonably withheld, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action. No
indemnifying party shall be liable for any amounts paid in settlement of any
action or claim without its written consent, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this section is unavailable
or insufficient to hold harmless an indemnified party under subsections (a) or
(b) above for any reason other than as provided in subsection (c) above, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and the indemnified
party on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
23
the Company on the one hand or such Holder or such other indemnified person, as
the case may be, on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
any other provision of this Section 5(d), the Holders shall not be required to
contribute any amount in excess of the amount by which the net proceeds received
by such Holders from the sale of the Warrants or the Warrant Shares pursuant to
the Warrant Shelf Registration Statement exceeds the amount of damages which
such Holders would have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each officer, director, employee, representative and agent of an indemnified
party and each person, if any, who controls such indemnified party within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party, and each officer, director, employee,
representative and agent of the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as the Company.
(e) The agreements contained in this section shall survive the sale of
the Warrants and the Warrant Shares pursuant to the Warrant Shelf Registration
Statement, and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any indemnified party.
SECTION 5.06. Additional Acts. If the sale of Warrants or the
---------------
issuance or sale of the Warrant Shares requires registration or approval of any
governmental authority (other than the registration requirements under the
Securities Act), or the taking of any other action under the laws of the United
States of America or any political subdivision thereof before such securities
may be validly offered or sold in compliance with such laws, then the Company
covenants that it will, in good faith and as expeditiously as reasonably
possible, use commercially reasonable efforts to secure and maintain such
registration or approval or to take such other action, as the case may be.
SECTION 5.07. Expenses. All expenses incident to the Company's
--------
performance of or compliance with its obligations under this Article 5 will be
borne by the Company, including without limitation: (i) all SEC, stock exchange
or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all reasonable fees and expenses incurred in connection with
compliance with state securities or blue sky laws, (iii) all expenses of any
Persons incurred by or on behalf of the Company in preparing or assisting in
preparing, printing and distributing the Warrant Shelf Registration Statement or
any other registration statement, prospectus, any amendments or supplements
thereto and other documents relating to the performance of and compliance with
this Article 5, (iv) the fees and disbursements of the Warrant Agent, (v) the
fees and disbursements of counsel for the Company and the Warrant
24
Agent and (vi) the fees and disbursements of the independent public accountants
of the Company, including the expenses of any special audits or comfort letters
required by or incident to such performance and compliance.
SECTION 5.08. Liquidated Damages.
------------------
(a) If (i) on or prior to 60 days after the Issue Date, the Warrant
Shelf Registration Statement has not been filed with the SEC, (ii) on or prior
to 120 days after the Issue Date, the Warrant Shelf Registration Statement has
not been declared effective, or (iii) after the Warrant Shelf Registration
Statement is declared effective, such registration statement thereafter ceases
to be effective or usable in connection with issuances of Warrant Shares and
resales of Warrants and Warrant Shares in accordance with and during the periods
specified in Sections 5.01 and 5.02 of this Warrant Agreement (each such event
referred to in clauses (i), (ii) and (iii) above shall be referred to as a
"Warrant Registration Default"), the Company shall pay liquidated damages
("Warrant Liquidated Damages") to each Holder of Transfer Restricted Warrants
(as defined below) or Transfer Restricted Warrant Shares (as defined below)
during the first 90-day period immediately following such Warrant Registration
Default in an amount equal to $0.01 per week per Transfer Restricted Warrant or
$0.0025 per week per Transfer Restricted Warrant Share held by such Holder. The
amount of Warrant Liquidated Damages payable by the Company shall increase by an
additional $0.01 per week per Transfer Restricted Warrant or $0.0025 per week
per Transfer Restricted Warrant Share for each subsequent 90-day period until
the Warrant Shelf Registration Statement is declared effective or such
registration statement again becomes effective, as the case may be, up to a
maximum amount of Warrant Liquidated Damages with respect to any Warrant
Registration Default of $0.05 per week per Transfer Restricted Warrant or
$0.0125 per week per Transfer Restricted Warrant Share. All accrued Warrant
Liquidated Damages payable by the Company to Holders pursuant to this Section
5.08 shall be paid in cash quarterly in arrears on the next succeeding January
1, April 1, July 1 and October 1, as the case may be (each a "Liquidated Damages
Payment Date"), to Holders of record as of a record date determined by the
Company which is not less than 10 nor more than 30 days prior to any such
Liquidated Damages Payment Date.
(b) "Transfer Restricted Warrants" and "Transfer Restricted Warrant
Shares" means each Warrant or Warrant Share, as the case may be, until (i) the
date on which such Transfer Restricted Warrant or Transfer Restricted Warrant
has been effectively registered under the Securities Act and disposed of in
accordance with the Warrant Shelf Registration Statement or (ii) the date on
which such Transfer Restricted Warrant or Transfer Restricted Warrant Share is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.
25
ARTICLE 6
WARRANT AGENT
-------------
SECTION 6.01. Appointment of Warrant Agent. The Company hereby
----------------------------
appoints the Warrant Agent to act as agent for the Company in accordance with
the provisions of this Agreement and the Warrant Agent hereby accepts such
appointment.
SECTION 6.02. Rights and Duties of Warrant Agent. (a) Agent for the
---------------------------------- -------------
Company. In acting under this Warrant Agreement and in connection with the
-------
Warrant Certificates, the Warrant Agent is acting solely as agent of the Company
and does not assume any obligation or relationship or agency or trust for or
with any of the holders of Warrant Certificates or beneficial owners of
Warrants.
(b) Counsel. The Warrant Agent may consult with counsel satisfactory
-------
to it (who may be counsel to the Company), and the advice of such counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
the advice of such counsel.
(c) Documents. The Warrant Agent shall be protected and shall incur
---------
no liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
(d) No Implied Obligations. The Warrant Agent shall be obligated to
----------------------
perform only such duties as are specifically set forth herein and in the Warrant
Certificates, and no implied duties or obligations of the Warrant Agent shall be
read into this Agreement or the Warrant Certificates. The Warrant Agent shall
not be under any obligation to take any action hereunder which may tend to
involve it in any expense or liability for which it does not receive indemnity
if such indemnity is reasonably requested. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates countersigned by the Warrant Agent and delivered
by it to the Holders or on behalf of the Holders pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrants. The Warrant
Agent shall have no duty or responsibility in case of any default by the Company
in the performance of its covenants or agreements contained herein or in the
Warrant Certificates or in the case of the receipt of any written demand from a
Holder with respect to such default, including any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise.
(e) Not Responsible for Adjustments or Validity of Stock. The Warrant
----------------------------------------------------
Agent shall not at any time be under any duty or responsibility to any Holder to
determine whether any facts exist that may require an adjustment of the number
of shares of Common Stock issuable upon exercise of each Warrant or the Exercise
Price, or with respect to the nature or extent of any adjustment when made or
with respect to the method employed or provided to be employed herein or in any
supplemental agreement in making the same. The Warrant Agent
26
shall not be accountable with respect to the validity or value of any shares of
Common Stock or of any securities or property which may at any time be issued or
delivered upon the exercise of any Warrant or upon any adjustment pursuant to
Article 4, and it makes no representation with respect thereto. The Warrant
Agent shall not be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any shares of Common Stock or stock
certificates upon the surrender of any Warrant Certificate for the purpose of
exercise or upon any adjustment pursuant to Article 4, or to comply with any of
the covenants of the Company contained in Article 4.
SECTION 6.03. Individual Rights of Warrant Agent. The Warrant Agent
----------------------------------
and any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or its
affiliates or become pecuniarily interested in transactions in which the Company
or its affiliates may be interested, or contract with or lend money to the
Company or its affiliates or otherwise act as fully and freely as though it were
not the 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.
SECTION 6.04. Warrant Agent's Disclaimer'. The Warrant Agent shall
---------------------------
not be responsible for and makes no representation as to the validity or
adequacy of this Agreement or the Warrant Certificates and it shall not be
responsible for any statement in this Agreement or the Warrant Certificates
other than its countersignature thereon.
SECTION 6.05. Compensation and Indemnity. The Company and the
--------------------------
Warrant Agent have entered into an agreement pursuant to which the Company
agrees to pay the Warrant Agent from time to time reasonable compensation for
its services and to reimburse the Warrant Agent upon request for all reasonable
out-of-pocket expenses incurred by it, including the reasonable compensation and
expenses of the Warrant Agent's agents and counsel. The Company shall indemnify
the Warrant Agent against any loss, liability or expense (including agents' and
attorneys' fees and expenses) incurred by it without negligence or bad faith on
its part arising out of or in connection with the acceptance or performance of
its duties under this Agreement. The Warrant Agent shall notify the Company
promptly of any claim for which it may seek indemnity. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Warrant Agent through willful misconduct, negligence or bad faith. The
Company's payment obligations pursuant to this Section 6.05 shall survive the
termination of this Agreement.
To secure the Company's payment obligations under this Agreement, the
Warrant Agent shall have a lien prior to the Holders on all money or property
held or collected by the Warrant Agent.
SECTION 6.06. Successor Warrant Agent. (a) The Company to Provide
----------------------- ----------------------
Warrant Agent. The Company agrees for the benefit of the Holders that there
-------------
shall at all times be a Warrant Agent hereunder until all the Warrants have been
exercised or are no longer exercisable.
27
(b) Resignation and Removal. The Warrant Agent may at any time resign
-----------------------
by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than 60 days after the date
on which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective, which date shall not be
less than 60 days after such notice is given unless the Warrant Agent otherwise
agrees. Any removal under this Section 6.06 shall take effect upon the
appointment by the Company as hereinafter provided of a successor Warrant Agent
(which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent.
(c) The Company to Appoint Successor. In the event that at any time
--------------------------------
the Warrant Agent shall resign, or shall be removed, or shall become incapable
of acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under Federal bankruptcy laws, as now or hereafter constituted,
or under any other applicable Federal or state bankruptcy, insolvency or similar
law, or shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Warrant Agent or its property or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due, or shall take corporate action in
furtherance of any such action, or a decree or order for relief by a court
having jurisdiction in the premises shall have been entered in respect of the
Warrant Agent in an involuntary case under the Federal bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal or State bankruptcy,
insolvency or similar law, or a decree order by a court having jurisdiction in
the premises shall have been entered for the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or similar official) of
the Warrant Agent or of its property or affairs, or any public officer shall
take charge or control of the Warrant Agent or of its property or affairs for
the purpose of rehabilitation, conservation, winding up or liquidation, a
successor Warrant Agent, qualified as aforesaid, shall be appointed by the
Company by an instrument in writing filed with the successor Warrant Agent.
Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by
the successor Warrant Agent of such appointment, the Warrant Agent shall cease
to be the Warrant Agent hereunder; provided, however, that in the event of the
resignation of the Warrant Agent hereunder, such resignation shall be effective
on the earlier of (i) the date specified in the Warrant Agent's notice of
resignation and (ii) the appointment and acceptance of a successor Warrant Agent
hereunder.
(d) Successor To Expressly Assume Duties. Any successor Warrant Agent
------------------------------------
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and to the Company an instrument accepting such appointment hereunder, and
thereupon such successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the rights and obligations of such
predecessor with like effect as if originally named as Warrant Agent hereunder,
and such predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such
successor
28
Warrant Agent shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant Agent
hereunder.
(e) Successor by Merger. Any corporation into which the Warrant Agent
-------------------
hereunder may be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that it
shall be qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 7
MISCELLANEOUS
-------------
SECTION 7.01. SEC Resorts and Other Information. Notwithstanding
---------------------------------
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, for so long as any Warrants remain outstanding,
the Company shall file with the SEC at the times specified under Sections 13 and
15(d) of the Exchange Act such annual reports and such information, documents
and other reports as are specified in such Sections of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, shall provide such
reports and information to the Warrant Agent as promptly as practicable
thereafter and shall provide such reports and information to the registered
Holders of any outstanding Warrants at the same time and in the same manner as
provided generally to the shareholders of the Company.
SECTION 7.02. Persons Benefiting. Except as set forth in Section
------------------
5.05 of this Warrant Agreement, nothing in this Warrant Agreement is intended or
shall be construed to confer upon any Person other than the Company, the Warrant
Agent and the Holders any right, remedy or claim under or by reason of this
agreement or any part hereof.
SECTION 7.03. Rights of Holders. Holders of unexercised Warrants are
-----------------
not entitled to (i) receive dividends or other distributions, (ii) receive
notice of or vote at any meeting of the stockholders, (iii) consent to any
action of the stockholders, (iv) receive notice as stockholders of any other
proceedings of the Company, (v) exercise any preemptive rights or (vi) exercise
any other rights whatsoever as stockholders of the Company.
SECTION 7.04. Amendment. This Warrant Agreement may be amended by
---------
the parties hereto without the consent of any Holder for the purpose of curing
any ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or adding or changing any other provisions with respect to
matters or questions arising under this Warrant Agreement as the Company and the
Warrant Agent may deem necessary or desirable (including without limitation any
addition or modification to provide for compliance with the transfer
restrictions set forth herein); provided, however, that such action shall not
adversely affect the rights of any of the Holders. Any amendment or supplement
to this Warrant Agreement that has an adverse effect on the interests of the
Holders shall require the written consent of the Holders
29
of a majority of the then outstanding Warrants. The consent of each Holder
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares issuable upon exercise
of Warrants would be decreased (other than pursuant to adjustments provided
herein). In determining whether the Holders of the required number of Warrants
have concurred in any direction, waiver or consent, Warrants owned by the
Company or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Warrant Agent shall be protected in relying on any such direction,
waiver or consent, only Warrants which the Warrant Agent knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Warrants
outstanding at the time shall be considered in any such determination.
SECTION 7.05. Notices. Any notice or communication shall be in
-------
writing and delivered in Person or mailed by first-class mail addressed as
follows:
if to the Company:
One City Centre
000 X. Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: President
with a copy (which shall not constitute notice) to:
Xxxxx, Xxxxxxxx & Xxxxxxx
Suite 3100, Promenade II
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx, Esq.
if to the Warrant Agent:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
The Company or the Warrant Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the Certificate Register and
shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
30
SECTION 7.06. Governing Law. The laws of the State of New York shall
-------------
govern this Agreement and the Warrant Certificates.
SECTION 7.07. Successors. All agreements of the Company in this
----------
Agreement and the Warrant Certificates shall bind its successors. All
agreements of the Warrant Agent in this Agreement shall bind its successors.
SECTION 7.08. Multiple Originals. The parties may sign any number of
------------------
copies of this Warrant Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement.
SECTION 7.09. Table of Contents. The table of contents and headings
-----------------
of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 7.10. Severability. The provisions of this Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to
be duly executed as of the date first written above.
TRANS WORLD AIRLINES, INC.
by /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY, as
Warrant Agent,
by /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
Title: Vice President
31
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE WERE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY
OF 12% SENIOR SECURED NOTES DUE 2002 OF TRANS WORLD AIRLINES, INC. (THE
"NOTES") AND ONE WARRANT. PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EARLIEST OF (i) JUNE 29, 1997, (ii) THE DATE ON WHICH AN EXCHANGE OFFER
REGISTRATION STATEMENT OR OF A SHELF REGISTRATION STATEMENT FOR THE NOTES IS
DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION OR (iii) OR SUCH
EARLIER DATE, AS PAINEWEBBER INCORPORATED MAY, IN ITS DISCRETION, DEEM
APPROPRIATE, THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED
OR EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER
WITH, THE NOTES.
THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE COMPANY FOR WHICH THIS
WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS. ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO
EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i)
A REGISTRATION STATEMENT UNDER THE SECURITIES ACT RELATING TO THE SHARES OF
COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAS BEEN FILED WITH, AND
DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), AND
NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS
BEEN ISSUED BY THE SEC, OR (ii) THE ISSUANCE OF SUCH SHARES IS PERMITTED
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
32
[TRANSFERS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY STATE
SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL,
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE RESALE RESTRICTION TERMINATION
DATE WHICH IS THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE AND THE LAST DATE ON WHICH THE CORPORATION OR ANY AFFILIATE OF
THE CORPORATION WAS THE OWNER OF THESE SECURITIES (OR ANY PREDECESSOR OF THESE
SECURITIES) ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE CORPORATION'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE, OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND
33
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE
FOREGOING CASES, TO REQUIRE A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THESE SECURITIES IS COMPLETED AND DELIVERED BY THE TRANSFEROR
TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S.
No. [ ] Certificate for ____ Warrants
REDEEMABLE WARRANTS TO PURCHASE COMMON STOCK OF
TRANS WORLD AIRLINES, INC.
THIS CERTIFIES THAT [ ], or its registered
assigns, is the registered holder of the number of Warrants set forth above (the
"Warrants"). Each Warrant entitles the holder thereof (the "Holder"), at its
option and subject to the provisions contained herein and in the Warrant
Agreement referred to below, to purchase from Trans World Airlines, Inc., a
Delaware corporation ("the Company"), 126.26 shares of Common Stock, par value
of $0.01 per share, of the Company (the "Common Stock") at the per share
exercise price of $7.92 (the "Exercise Price"). This Warrant Certificate shall
terminate and become void as of the close of business on April 1, 2002 (the
"Expiration Date") or upon the exercise hereof as to all the shares of Common
Stock subject hereto. The number of shares issuable upon exercise of the
Warrants and the Exercise Price per share shall be subject to adjustment from
time to time as set forth in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of March 31, 1997 (the "Warrant Agreement"), between
the Company and American Stock Transfer & Trust Company (the "Warrant Agent",
which term includes any successor Warrant Agent under the Warrant Agreement),
and is subject to the terms and provisions contained in the Warrant Agreement,
to all of which terms and provisions the Holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is hereby incorporated
herein by reference and made a part hereof. Reference is hereby made to the
34
Warrant Agreement for a full statement of the respective rights, limitations of
rights, duties and obligations of the Company, the Warrant Agent and the Holders
of the Warrants. Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Warrant Agreement. A copy of the Warrant
Agreement may be obtained for inspection by the Holder hereof upon written
request to the Warrant Agent at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
attention Corporate Trust Department.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by presentation of this Warrant Certificate with
the Election to Purchase attached hereto duly executed and with the simultaneous
payment of the Exercise Price (subject to adjustment) to the Warrant Agent for
the account of the Company at the office of the Warrant Agent. At the option of
the Holder, payment of the Exercise Price may be made either (i) in cash or by
certified or official bank check payable to the order of the Company or by wire
transfer of funds to an account designated by the Company for such purpose or
(ii) prior to the maturity of the Notes, by the surrender to the Company for
cancellation of Notes with a principal amount equal to the aggregate Exercise
Price for all shares issuable upon exercise of such Warrant. If payment of the
Exercise Price is to be made by the cancellation of Notes, the holder of such
Note shall not be entitled to receive or otherwise be credited with, and by
surrendering such Note for cancellation expressly waives any and all rights to
receive or otherwise be credited with, any accrued but unpaid interest on, or
liquidated damages with respect to, such tendered Note.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time on
or after March 31, 1998; provided, however, that Holders of Warrants will be
able to exercise their Warrants only if a Shelf Registration Statement relating
to the Warrant Shares is effective or the exercise of such Warrants is exempt
from the registration requirements of the Securities Act of 1933 and such
securities are qualified for sale or exempt from qualification under the
applicable securities laws of the states or other jurisdictions in which such
Holders reside; provided further, however, that no Warrant shall be exercisable
after the Expiration Date.
Commencing April 1, 2000, the Company may, under certain circumstances
set forth in the Warrant Agreement, redeem outstanding Warrants, in whole or in
part, upon not less than 20 nor more than 60 days' prior written notice to the
registered Holder hereof, at a price of $.01 per Warrant. Payment of such
Redemption Price will be made by the Warrant Agent upon presentation and
surrender of this Warrant Certificate to the Warrant Agent in the City of New
York, New York. If fewer than all Warrants represented by this Warrant
Certificate are redeemed, the Warrant Agent will issue a new Warrant Certificate
representing the number of Warrants remaining in the name of the registered
Holder hereof following such redemption. Any Warrants which are not exercised
by 5:00 p.m., New York time on the Redemption Date shall no longer be deemed to
be outstanding and the Holders thereof will be entitled to receive only the
Redemption Price with respect to such Warrants without interest.
In the event the Company enters into a Combination, the Holder hereof
will be entitled to receive upon exercise of the Warrants the kind and amount of
shares of capital stock or other securities or other property of such surviving
entity as the Holder would have been
35
entitled to receive upon or as a result of the combination had the Holder
exercised its Warrants immediately prior to such Combination; provided, however,
that in the event that, in connection with such Combination, consideration to
holders of Common Stock in exchange for their shares is payable solely in cash
or in the event of the dissolution, liquidation or winding-up of the Company,
the Holder hereof will be entitled to receive such cash distributions as the
Holder would have received had the Holder exercised its Warrants immediately
prior to such Combination, less the Exercise Price.
As provided in the Warrant Agreement, the number of shares of Common
Stock issuable upon the exercise of the Warrants and the Exercise Price are
subject to adjustment upon the happening of certain events.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to Section 2.06 of the Warrant
Agreement, but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate
representing those Warrants which were not exercised. This Warrant Certificate
may be exchanged at the office of the Warrant Agent by presenting this Warrant
Certificate properly endorsed with a request to exchange this Warrant
Certificate for other Warrant Certificates evidencing an equal number of
Warrants. No fractional Warrant Shares will be issued upon the exercise of the
Warrants, but the Company shall pay an amount in cash equal to the Current
Market Value per Warrant Share on the day immediately preceding the date the
Warrant is exercised, multiplied by the fraction of a Warrant Share that would
be issuable on the exercise of any Warrant.
All shares of Common Stock issuable by the Company upon the exercise
of the Warrants shall, upon such issue, be duly and validly issued and fully
paid and non-assessable.
The holder in whose name the Warrant Certificate is registered may be
deemed and treated by the Company and the Warrant Agent as the absolute owner of
the Warrant Certificate for all purposes whatsoever and neither the Company nor
the Warrant Agent shall be affected by notice to the contrary.
Holders of unexercised Warrants are not entitled to (i) receive
dividends or other distributions, (ii) receive notice of or vote at any meeting
of the Company's stockholders, (iii) consent to any action of the Company's
stockholders, (iv) receive notice as stockholders of any other proceedings of
the Company, (v) exercise any preemptive rights or (vi) exercise any other
rights whatsoever as stockholders of the Company.
36
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
TRANS WORLD AIRLINES, INC.
By
------------------------------
Title:
[SEAL]
Attest:
---------------------------
Secretary
DATED:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent,
By
---------------------------------
Authorized Signatory
37
FORM OF ELECTION TO PURCHASE WARRANT CERTIFICATES
(to be executed only upon exercise of Warrants)
TRANS WORLD AIRLINES, INC.
The undersigned hereby irrevocably elects to exercise [ ]
Warrants at an exercise price per Warrant (subject to adjustment) of $ to
acquire [ ] shares of Common Stock, par value $0.01 per share, of Trans
World Airlines, Inc. on the terms and conditions specified within the Warrant
Certificate and the Warrant Agreement therein referred to, surrenders this
Warrant Certificate and all right, title and interest therein to Trans World
Airlines, Inc. and directs that the shares of Common Stock deliverable upon the
exercise of such Warrants be registered or placed in the name and at the address
specified below and delivered thereto.
Date: __________, ____
________________________________/1/
(Signature of Owner)
________________________________
(Xxxxxx Xxxxxxx)
________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
________________________________
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION(Banks,
Stock Brokers, Savings and
Loan Associations, and
Credit Unions) WITH
MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION
PROGRAM PURSUANT TO
S.E.C. RULE 17A-15
--------------
1. The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
38
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants represented by the Warrant Certificate to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
39
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of Trans World Airlines,
Inc. (the "Company")
This Certificate relates to Warrants held in definitive form by
_______________ (the "Transferor").
The Transferor has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants. In connection with
such request and in respect of each such Warrant, the Transferor does hereby
certify that the Transferor is familiar with the Warrant Agreement relating to
the above captioned Warrants and that the transfer of this Warrant does not
require registration under the Securities Act of 1933, (the "Securities Act")
because/*/:
[ ] Such Warrant is being transferred to the Company.
[ ] Such Warrant is being transferred pursuant to an effective
Registration Statement under the Securities Act.
[ ] Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act) in reliance on Rule
144A.
[ ] Such Warrant is being transferred pursuant to an offshore
transaction in accordance with Rule 904 under the Securities Act.
[ ] Such Warrant is being transferred to an Institutional "Accredited
Investor" within the meaning of Subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act.
[ ] Such Warrant is being transferred in a transaction meeting the
requirements of Rule 144 under the Securities Act.
The Warrant Agent and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
--------------------------------
[INSERT NAME OF TRANSFEROR]
by
-----------------------------
Date:
-------------------------
------------
/*/ Please check applicable box.
40
EXHIBIT B
ASSIGNMENT FORM
For value received __________ hereby sells, assigns and transfers unto
________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF REGISTERED ASSIGNEE
+---------------------------------------+
| |
+---------------------------------------+
________________________________________________________________________________
(Please print name and address including zip code of assignee)
________________________________________________________________________________
________________________________________________________________________________
the within Warrant Certificate together with all right, title and interest in
the Warrant evidenced thereby, and does hereby irrevocably constitute and
appoint _______________ attorney, to transfer Warrant Certificate number _____
of Trans World Airlines, Inc., on the books of Trans World Airlines, Inc., with
full power of substitution in the premises.
Dated this _____ day of __________, 19__
Signature:______________________________
Signature Guaranteed by:
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION
(Banks, Stock Brokers, Savings
and Loan Associations, and
Credit Unions) WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17A-15
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever.
41
