Exhibit 4.5
EXECUTION COPY
================================================================================
SERIES B WARRANT AGREEMENT
between
AMF BOWLING WORLDWIDE, INC.
and
MELLON INVESTOR SERVICES LLC,
as Warrant Agent
March 8, 2002
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Appointment of Warrant Agent.............................. 1
SECTION 2. Issuances................................................. 1
SECTION 3. Form of Warrant Certificates.............................. 1
SECTION 4. Execution of Warrant Certificates......................... 2
SECTION 5. Registration and Countersignature......................... 2
SECTION 6. Registration of Transfers and Exchanges................... 3
SECTION 7. Duration and Exercise of Warrants......................... 6
SECTION 8. Cancellation of Warrants.................................. 10
SECTION 9. Mutilated or Missing Warrant Certificates................. 10
SECTION 10. Reservation of Shares..................................... 10
SECTION 11. Stock Exchange Listings................................... 11
SECTION 12. Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants...................... 11
SECTION 13. Fractional Shares......................................... 14
SECTION 14. Notices to Warrantholders................................. 14
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent.. 15
SECTION 16. Warrant Agent............................................. 15
SECTION 17. Change of Warrant Agent................................... 18
SECTION 18. Warrantholder Not Deemed a Stockholder.................... 19
SECTION 19. Notices to Company and Warrant Agent...................... 19
SECTION 20. Payment of Taxes and Charges.............................. 20
SECTION 21. Supplements and Amendments................................ 20
SECTION 22. Successors................................................ 21
SECTION 23. Termination............................................... 21
SECTION 24. Governing Law Venue and Jurisdiction...................... 21
SECTION 25. Benefits of this Agreement................................ 21
SECTION 26. Counterparts.............................................. 21
SECTION 27. Headings.................................................. 21
SECTION 28. Meaning of Terms Used in Agreement........................ 21
SECTION 29. Severability.............................................. 22
This SERIES B WARRANT AGREEMENT (this "Agreement") is dated as of March 8,
2002, between AMF BOWLING WORLDWIDE, INC., a Delaware corporation (the
"Company"), and MELLON INVESTOR SERVICES LLC, a New Jersey limited liability
company (in its capacity as warrant agent hereunder, the "Warrant Agent").
W I T N E S S E T H
-------------------
WHEREAS, pursuant to the Second Amended, Second Modified Plan of
Reorganization for the Company dated January 31, 2002 (as may be further
modified, supplemented or amended, the "Plan") under chapter 11 of title 11 of
the United States Code, 11 U.S.C. ss.ss.101 et seq., the Company proposes to
issue 1,724,138 Series B warrants (the "Warrants") entitling the holders to
purchase initially an aggregate of up to 1,724,138 shares (as may be adjusted
from time to time pursuant to this Agreement, the "Shares") of the Company's
Common Stock, par value $0.01 per share ("Common Stock");
WHEREAS, the Warrant Agent, at the request of the Company, has agreed to
act as the agent of the Company in connection with the issuance, registration,
transfer, exchange, exercise and conversion of the Warrants;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the
----------------------------
Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement; and the Warrant Agent
hereby accepts such appointment, upon the terms and conditions hereinafter set
forth.
SECTION 2. Issuances. Subject to the provisions of this Agreement, in
---------
accordance with the terms of the Plan, on (and from time to time after) the
Initial Distribution Date (as defined in the Plan), Warrants to purchase the
Shares will be issued and delivered by the Company in the amounts and to the
recipients specified in the Plan. On or after the Initial Distribution Date, the
Company will deliver, or cause to be delivered, one or more Global Warrant
Certificates (as defined below) evidencing the Warrants in accordance with the
terms of the Plan.
SECTION 3. Form of Warrant Certificates. Subject to Section 6 of this
----------------------------
Agreement, the Warrants shall initially be issued in the form of one or more
global certificates (the "Global Warrant Certificates"), the forms of election
to exercise and of assignment to be printed on the reverse thereof, in
substantially the form set forth in Exhibit A hereto (including the information
---------
set forth in footnote 1 thereto) together with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or with
any rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Warrant Certificates, as evidenced by
their execution of the Warrant Certificates.
The Global Warrant Certificates shall be deposited on or after the Initial
Distribution Date with, or with the Warrant Agent as custodian for, The
Depository Trust Company (the "Depositary") and registered in the name of Cede &
Co., as the Depositary's nominee. Each Global Warrant Certificate shall
represent such number of the outstanding Warrants as specified therein, and each
shall provide that it shall represent the aggregate amount of outstanding
Warrants from time to time endorsed thereon and that the aggregate amount of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate, in accordance with the terms of this Agreement. Upon
request, a Holder may receive from the Depositary and the Warrant Agent Warrants
in definitive form (the "Definitive Warrant Certificates" and, together with the
Global Warrant Certificates, the "Warrant Certificates"), substantially in the
form of Exhibit A (not including footnote 1 thereto) as set forth in Section 6
---------
below.
SECTION 4. Execution of Warrant Certificates. Warrant Certificates shall be
---------------------------------
signed on behalf of the Company by its Chairman of the Board of Directors, its
Chief Executive Officer, its President, a Vice President or its Treasurer (each,
an "Officer"). Each such signature upon the Warrant Certificates may be in the
form of a facsimile signature of any such Officer and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that purpose the
Company may adopt and use the facsimile signature of any Officer.
If any Officer who shall have signed any of the Warrant Certificates shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned by the Warrant Agent or disposed of by the Company, such
Warrant Certificates nevertheless may be countersigned and delivered or disposed
of as though such Officer had not ceased to be such Officer of the Company; and
any Warrant Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Warrant Certificate, shall be a
proper officer of the Company to sign such Warrant Certificate, although at the
date of the execution of this Agreement any such person was not such officer.
SECTION 5. Registration and Countersignature. The Warrant Agent shall, upon
---------------------------------
receipt of the Warrant Certificates duly executed on behalf of the Company,
countersign one or more Warrant Certificates evidencing the Warrants and shall
deliver such Warrant Certificates to or upon the written order of the Company. A
Warrant Certificate shall be, and shall remain, subject to the provisions of
this Agreement until such time as all of the Warrants evidenced thereby shall
have been duly exercised or shall have expired or been canceled in accordance
with the terms hereof.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that such Warrant Certificate so countersigned has been duly
issued hereunder.
The Warrant Agent shall keep, at an office designated for such purpose,
books (the "Warrant Register") in which, subject to such reasonable regulations
as it may prescribe, it shall register the Warrant Certificates and exchanges
and transfers of outstanding Warrant Certificates in accordance with the
procedures set forth in Section 6 of this Agreement, all in
-2-
form satisfactory to the Company and the Warrant Agent. No service charge shall
be made for any exchange or registration of transfer of the Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. The Warrant Agent
shall have no obligation to effect an exchange or register a transfer unless and
until any payments required by the immediately preceding sentence have been
made.
Prior to due presentment for registration of transfer or exchange of any
Warrant in accordance with the procedures set forth in this Agreement, the
Warrant Agent and the Company may deem and treat the person in whose name any
Warrant is registered (the "Holder" of such Warrant) as the absolute owner of
such Warrant (notwithstanding any notation of ownership or other writing made in
a Warrant Certificate by anyone), for the purpose of any exercise thereof, any
distribution to the Holder thereof and for all other purposes, and neither the
Warrant Agent nor the Company shall be affected by notice to the contrary.
SECTION 6. Registration of Transfers and Exchanges.
---------------------------------------
(a) Transfer and Exchange of Global Warrant Certificates or Beneficial
------------------------------------------------------------------
Interests Therein. The transfer and exchange of Global Warrant Certificates
-----------------
or beneficial interests therein shall be effected through the Depositary,
in accordance with this Agreement and the procedures of the Depositary
therefor.
(b) Exchange of a Beneficial Interest in a Global Warrant Certificate
for a Definitive Warrant Certificate.
(i) Any Holder of a beneficial interest in a Global Warrant
Certificate may, upon request, exchange such beneficial interest for a
Definitive Warrant Certificate. Upon receipt by the Warrant Agent from
the Depositary or its nominee of written instructions or such other
form of instructions as is customary for the Depositary on behalf of
any person having a beneficial interest in a Global Warrant
Certificate, the Warrant Agent shall cause, in accordance with the
standing instructions and procedures existing between the Depositary
and Warrant Agent, the number of Warrants represented by the Global
Warrant Certificate to be reduced by the number of Warrants to be
represented by the Definitive Warrant Certificates to be issued in
exchange for the interest of such person in the Global Warrant
Certificate and, following such reduction, the Company shall execute
and the Warrant Agent shall countersign and deliver to the transferee,
as the case may be, a Definitive Warrant Certificate.
(ii) Definitive Warrant Certificates issued in exchange for a
beneficial interest in a Global Warrant Certificate pursuant to this
Section 6(b) shall be registered in such names as the Depositary,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Warrant Agent. The Warrant Agent shall
deliver such Definitive Warrant Certificates to the persons in whose
names such Warrants are so registered.
(c) Transfer and Exchange of Definitive Warrant Certificates. When
--------------------------------------------------------
Definitive Warrant Certificates are presented to the Warrant Agent with a
request:
-3-
(i) to register the transfer of the Definitive Warrant
Certificates; or
(ii) to exchange such Definitive Warrant Certificates for an
equal number of Definitive Warrant Certificates of other authorized
denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if its requirements for such transactions are met; provided, however, that the
-------- -------
Definitive Warrant Certificates presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Warrant Agent, duly executed
by the Holder thereof or by his attorney, duly authorized in writing.
(d) Restrictions on Exchange or Transfer of a Definitive Warrant
Certificate for a Beneficial Interest in a Global Warrant Certificate. A
Definitive Warrant Certificate may not be exchanged for a beneficial interest in
a Global Warrant Certificate except upon satisfaction of the requirements set
forth below. Upon receipt by the Warrant Agent of a Definitive Warrant
Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Warrant Agent, together with written
instructions directing the Warrant Agent to make, or to direct the Depositary to
make, an endorsement on the Global Warrant Certificate to reflect an increase in
the number of Warrants represented by the Global Warrant Certificate equal to
the number of Warrants represented by such Definitive Warrant Certificate, then
the Warrant Agent shall cancel such Definitive Warrant Certificate and cause, or
direct the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant Certificate to be increased
accordingly. If no Global Warrant Certificates are then outstanding, the Company
shall issue and the Warrant Agent shall countersign a new Global Warrant
Certificate representing the appropriate number of Warrants.
(e) Restrictions on Transfer and Exchange of Global Warrant
-------------------------------------------------------
Certificates. Notwithstanding any other provisions of this Agreement (other than
------------
the provisions set forth in Section 6(f)), unless and until it is exchanged in
whole for Definitive Warrant Certificates, a Global Warrant Certificate may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrant Certificates in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Warrant Certificates notifies
the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Warrant Certificates and a successor Depositary
for the Global Warrant Certificates is not appointed by the Company within
90 days after delivery of such notice; or
-4-
(ii) the Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Definitive
Warrant Certificates under this Agreement,
then the Company shall execute, and the Warrant Agent, upon written instructions
signed by an officer of the Company, shall countersign and deliver Definitive
Warrant Certificates, in an aggregate number equal to the number of Warrants
represented by the Global Warrant Certificates, in exchange for such Global
Warrant Certificates.
(g) No Warrants, or shares of Common Stock issuable upon exercise of
the Warrants, shall be sold, exchanged or otherwise transferred in violation of
the Securities Act of 1933, as amended (the "Securities Act"), or state
securities laws. The Company or the Warrant Agent may require that, as a
condition to any sale, exchange or transfer of a Warrant or such shares of
Common Stock that the Holder deliver to the Company and the Warrant Agent an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company and to the Warrant Agent, to the effect that such sale, exchange
or transfer is made in compliance with the Securities Act and all applicable
state securities laws or pursuant to an exempt transaction under the Securities
Act and state securities laws. The provisions of this paragraph (g) shall not
apply to the exercise of any Warrant to the extent that the Shares issued upon
such exercise (and any unexercised portion of the Warrant so exercised) shall be
issued to the same Holder that exercised such Warrant.
(h) The Warrant Certificates and the shares of Common Stock issuable
upon exercise of the Warrants shall bear such legends as the Company shall
determine reflecting the restrictions in the immediately preceding Section 6(g).
(i) Cancellation of Global Warrant Certificate. At such time as all
------------------------------------------
beneficial interests in Global Warrant Certificates have either been exchanged
for Definitive Warrant Certificates, redeemed, repurchased or cancelled, all
Global Warrant Certificates shall be returned to or retained and cancelled by
the Warrant Agent.
(j) Obligations with Respect to Transfers and Exchanges of Warrants.
---------------------------------------------------------------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent is hereby authorized to
countersign, in accordance with the provisions of Section 3 and this
Section 6, Definitive Warrant Certificates and Global Warrant Certificates
as required pursuant to the provisions of this Section 6 and for the
purpose of any distribution of Warrant Certificates contemplated by Section
12.
(ii) All Definitive Warrant Certificates and Global Warrant
Certificates issued upon any registration of transfer or exchange of
Definitive Warrant Certificates or Global Warrant Certificates shall be the
valid obligations of the Company, entitled to the same benefits under this
Agreement as the Definitive Warrant Certificates or Global Warrant
Certificates surrendered upon such registration of transfer or exchange.
-5-
(iii) No service charge shall be made to a Holder for any
registration, transfer or exchange.
(iv) So long as the Depositary, or its nominee, is the
registered owner of a Global Warrant Certificate, the Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of
the Warrants represented by such Global Warrant Certificate for all
purposes under this Agreement. Except as provided in Section 6(b) upon the
exchange of a beneficial interest in a Global Warrant Certificate for a
Definitive Warrant Certificate, owners of beneficial interests in a Global
Warrant Certificate will not be entitled to have any Warrants registered in
their names, and will not receive or be entitled to receive physical
delivery of any such Warrants as Definitive Warrant Certificates and will
not be considered the owners or holders thereof under the Warrants or this
Agreement. Neither the Company nor the Warrant Agent, in its capacity as
registrar for such Warrants, will have any responsibility or liability for
any aspect of the records relating to beneficial interests in a Global
Warrant Certificate or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
(v) Subject to Sections 6(b), (c), (d) and this Section 6(j),
the Warrant Agent shall, upon receipt of all information required to be
delivered hereunder, from time to time register the transfer of any
outstanding Warrants represented by Warrant Certificates in the Warrant
Register, upon surrender of Warrant Certificates representing such Warrants
at the Warrant Agent Office (as defined below), duly endorsed, and
accompanied by a completed form of assignment, duly signed by the Holder
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, such signature to be guaranteed by (i) a bank or trust
company, (ii) a broker or dealer that is a member of the National
Association of Securities Dealers, Inc. (the "NASD") or (iii) a member of a
national securities exchange. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee.
SECTION 7. Duration and Exercise of Warrants. (a) The Warrants shall expire
---------------------------------
at 5:00 p.m. on March 9, 2009 (such date, the "Expiration Date"). On the
Expiration Date, the Warrants will become void and of no value.
(b) Subject to the provisions of this Agreement, including Section
12, each Warrant shall entitle the holder thereof to purchase from the Company
(and the Company shall issue and sell to such holder) one fully paid and
nonassessable Share at a price equal to $27.19 per share (as the same may be
hereafter adjusted pursuant to Section 12, the "Exercise Price").
(c) From and after the Initial Distribution Date under, and as
defined in, the Plan and until 5:00 p.m., New York City time, on the Expiration
Date with respect to such Warrant, the Holder of a Warrant may exercise such
Holder's right to purchase Shares by
(i) providing written notice of such election ("Warrant Exercise
Notice") to exercise the Warrant to the Warrant Agent at the address set
forth in Section 19 hereof, "Re: AMF Bowling Worldwide, Inc. Warrant
Exercise", by hand or by facsimile, no later than 5:00 p.m., New York City
time, on the Expiration Date, which
-6-
Warrant Exercise Notice shall be in the form of an election to purchase
Shares of Common Stock of the Company substantially in the form set forth
either (x) in Exhibit B-1 hereto, properly completed and executed by the
Holder; provided that such written notice may only be submitted by persons
who hold Definitive Warrant Certificates, or (y) in Exhibit B-2 hereto,
properly completed and executed by the Holder; provided that such written
notice may only be submitted with respect to Warrants held through the
book-entry facilities of the Depositary, by or through persons that are
direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m., New York
City time, on the business day immediately prior to the Settlement Date, as
defined below, such Warrants to the Warrant Agent by book-entry transfer
through the facilities of the Depositary or (y) no later than 5:00 p.m.,
New York City time, on the business day immediately prior to the Settlement
Date, the Warrant Certificates evidencing such Warrants to the Warrant
Agent if Definitive Warrant Certificates have been issued and delivered
pursuant to Section 3; and
(iii) paying the applicable Exercise Price multiplied by the
number of Shares in respect of which such Warrants are being exercised (the
"Exercise Amount"), together with any applicable taxes and governmental
charges. The date three business days after a Warrant Exercise Notice is
delivered is referred to for all purposes under this Agreement as the
"Settlement Date".
(d) The Exercise Amount shall be payable in lawful money of the
United States of America either (i) by wire transfer in immediately available
funds of the Exercise Amount to an account of the Warrant Agent specified in
writing by the Warrant Agent for such purpose, no later than 5:00 p.m., New York
City time, on the business day immediately prior to the Settlement Date, (ii) by
surrender to the Warrant Agent through the facilities of the Depositary for
cancellation of shares of Common Stock newly acquired upon exercise of the
Warrant, valued at the Market Price (as hereinafter defined) equal to the
Exercise Amount or (iii) by a combination of the methods described in clauses
(i) and (ii) of this subparagraph (d). The term "Market Price" shall mean (x)
the average closing price of a share of Common Stock for the ten consecutive
trading days immediately preceding, but not including, the date of exercise of
this Warrant as reported on the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading or (y) if not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and asked prices during such ten trading day period in the
over-the-counter market as reported by the NASD Automated Quotation System
("Nasdaq") National Market or any comparable system or (z) in all other cases,
as determined in good faith by the Board of Directors of the Company (including
any authorized committee thereof, the "Board of Directors"), whose determination
shall be conclusive absent manifest error.
(e) Any exercise of a Warrant pursuant to the terms of this Agreement
shall be irrevocable and shall constitute a binding agreement between the Holder
and the Company, enforceable in accordance with its terms.
-7-
(f) The Warrant Agent shall notify the Depositary of (x) the Warrant
Agent's account at the Depositary to which the Warrants must be delivered by the
business day immediately prior to the Settlement Date for those Warrants to be
exercised through the book-entry facilities of the Depositary and (y) the
address, phone number and facsimile number where holders of the Warrants can
contact the Warrant Agent to which Warrant Exercise Notices are to be submitted.
(g) Promptly following delivery of Warrants to a Holder, the Warrant
Agent shall notify such Holder (through the clearing system) of (i) the Warrant
Agent's account at the Depositary to which holders must deliver Warrants on the
business day immediately prior to the Settlement Date, (ii) the Warrant exercise
procedures of the Depositary and (iii) the address, telephone number and
facsimile number where Holders can contact the Warrant Agent and to which
Holders must submit Warrant Exercise Notices if they decide to exercise their
Warrants. At such time, the Warrant Agent shall also provide then Holders with a
Warrant Exercise Notice and the pertinent instructions as to how to exercise
their Warrants.
(h) The Warrant Agent shall:
(i) examine all Warrant Exercise Notices and all other documents
delivered to it by or on behalf of holders as contemplated by the Warrant
Certificates to ascertain whether, on their face, such Warrant Exercise
Notices and any such other documents have been executed and completed in
accordance with their terms and the terms of the Warrant Certificates;
(ii) determine whether the exercising Warrant Holder has
delivered the related Warrants to the Warrant Agent's account at the
Depositary. In each case where a Warrant Exercise Notice or other document
appears on its face to have been improperly completed or executed or some
other irregularity in connection with the exercise of the Warrants exists,
the Warrant Agent shall endeavor to inform the appropriate parties
(including the person submitting such instrument) of the need for
fulfillment of all requirements, specifying those requirements which appear
to be unfulfilled. Except to the extent provided in the immediately
preceding sentence, the Warrant Agent shall be under no duty to give notice
to any person of any irregularities in Warrant Exercise Notices, delivery
of Warrants or any other document completed or executed in connection
therewith nor shall it incur any liability for failure to give such notice;
(iii) inform the Company of and cooperate with and assist the
Company in resolving any reconciliation problems between Warrant Exercise
Notices received and delivery of Warrants to the Warrant Agent's account;
(iv) advise the Company no later than one business day after
receipt of a Warrant Exercise Notice, of (i) the receipt of such Warrant
Exercise Notice and the number of Warrants exercised in accordance with the
terms and conditions of this Agreement, (ii) the instructions with respect
to delivery of the shares of Common Stock of the Company deliverable upon
such exercise, subject to timely receipt from the
-8-
Depositary of the necessary information, and (iii) such other
information as the Company shall reasonably require;
(v) notify, by such time as necessary to ensure a
prompt closing, the Depositary, with a copy to the Company, each
account at the Depositary to be credited with Common Stock and the
amount thereof to be credited to each such account; and
(vi) subject to Common Stock being made available to
the Warrant Agent by or on behalf of the Company for delivery to
accounts within the Depositary, liaise with the Depositary and
endeavor to effect such delivery to the relevant accounts at the
Depositary in accordance with its requirements.
(i) All questions as to the validity, form and sufficiency
(including time of receipt) of a Warrant exercise will be determined by the
Company in its sole discretion, which determination shall be final and
binding. The Warrant Agent shall incur no liability for or in respect of
such determination by the Company. The Company reserves the right to reject
any and all Warrant Exercise Notices not in proper form or for which any
corresponding agreement by the Company to exchange would, in the opinion of
the Company, be unlawful. Such determination by the Company shall be final
and binding on the Holders, absent manifest error. Moreover, the Company
reserves the absolute right to waive any of the conditions to the exercise
of Warrants or defects in Warrant Exercise Notices with regard to any
particular exercise of Warrants. The Company shall be under no duty to give
notice to the holders of the Warrants of any irregularities in any exercise
of Warrants, nor shall it incur any liability for the failure to give such
notice.
(j) As soon as practicable after the exercise of any
Warrant, the Company shall issue, or otherwise deliver, in authorized
denominations to or upon the order of the Holder of the Warrant
Certificates evidencing such Warrants, either
(i) if such Holder holds the Warrants being exercised
through the Depositary's book-entry transfer facilities, by same-day
credit to such Holder's account at the Depositary or to the account of
a participant in the Depositary the number of Shares to which such
Holder is entitled, in each case registered in such name and delivered
to such account as directed in the Warrant Exercise Notice by such
Holder or by the direct participant in the Depositary through which
such Holder is acting, or
(ii) if such Holder holds the Warrants being exercised
in the form of Definitive Warrant Certificates, by delivery to the
address designated by such Holder in its Warrant Exercise Notice of a
physical certificate representing the number of Shares to which such
Holder is entitled, in fully registered form, registered in such name
or names as may be directed by such Holder. If less than all of the
Warrants evidenced by a Warrant Certificate surrendered upon the
exercise of Warrants are exercised at any time prior to the date of
expiration for the Warrants, a new Warrant Certificate or Certificates
shall be issued for the remaining number of Warrants evidenced by the
Warrant Certificate so surrendered, and the Warrant Agent is hereby
authorized to
-9-
countersign the required new Warrant Certificate or Certificates
pursuant to the provisions of Section 6 and this Section 7.
SECTION 8. Cancellation of Warrants. If the Company shall purchase or
------------------------
otherwise acquire Warrants, the Warrant Certificates representing such Warrants
shall thereupon be delivered to the Warrant Agent and be cancelled by it and
retired. The Warrant Agent shall cancel all Warrant Certificates surrendered for
exchange, substitution, transfer or exercise in whole or in part. Such cancelled
Warrant Certificates shall thereafter be disposed of in a manner satisfactory to
the Company.
SECTION 9. Mutilated or Missing Warrant Certificates. If any of the Warrant
-----------------------------------------
Certificates shall be mutilated, lost, stolen or destroyed, the Company shall
issue, and the Warrant Agent shall countersign and deliver, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company and the Warrant Agent of the loss, theft or
destruction of such Warrant Certificate and the posting of an indemnity or bond,
if requested by either the Company or the Warrant Agent, also satisfactory to
them. Applicants for such substitute Warrant Certificates shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe and as required by Section 8-405 of
the Uniform Commercial Code as in effect in the State of New York.
SECTION 10. Reservation of Shares. For the purpose of enabling it to
---------------------
satisfy any obligation to issue Shares upon exercise of Warrants, the Company
will at all times through the Expiration Date, reserve and keep available, free
from preemptive rights and out of its aggregate authorized but unissued or
treasury shares of Common Stock, the number of Shares deliverable upon the
exercise of all outstanding Warrants, and the transfer agent for the Company's
Common Stock (such agent, in such capacity, as may from time to time be
appointed by the Company, the "Transfer Agent") is hereby irrevocably authorized
and directed at all times to reserve such number of authorized and unissued or
treasury shares of Common Stock as shall be required for such purpose. The
Company will keep a copy of this Agreement on file with such Transfer Agent and
with every transfer agent for any shares of the Company's capital stock issuable
upon the exercise of Warrants pursuant to Section 7. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
stock certificates issuable upon exercise of outstanding Warrants, and the
Company will supply such Transfer Agent with duly executed stock certificates
for such purpose.
Before taking any action that would cause an adjustment pursuant to Section
12 reducing any Exercise Price below the then par value (if any) of the Shares
issuable upon exercise of the Warrants, the Company will take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Shares at
such Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock issued upon exercise
of the Warrants will, upon issuance in accordance with the terms of this
Agreement, be fully paid
-10-
and nonassessable and free from all taxes, liens, charges and security interests
created by or imposed upon the Company with respect to the issuance and holding
thereof.
SECTION 11. Stock Exchange Listings. So long as any Warrants remain
-----------------------
outstanding, the Company will use commercially reasonable efforts to take all
necessary action to have the shares of Common Stock, immediately upon their
issuance upon exercise of Warrants, (i) listed on each national securities
exchange on which the Common Stock is then listed or (ii) if the Common Stock is
not then listed on any national securities exchange, listed for quotation on the
Nasdaq National Market System or such other over-the-counter quotation system,
if any, on which the Common Stock may then be listed.
SECTION 12. Adjustment of Exercise Price and Number of Shares Purchasable
-------------------------------------------------------------
or Number of Warrants. The Exercise Price, the number of shares of Common Stock
---------------------
purchasable upon the exercise of each Warrant and the number of Warrants
outstanding are subject to adjustment from time to time upon the occurrence of
the events enumerated in this Section 12.
(a) If the Company shall (i) pay a dividend or make a distribution on
Common Stock consisting of shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) issue,
in a reclassification of the Common Stock, other securities of the Company
(including any such reclassification in connection with a consolidation or
merger of the Company in which the Company is the surviving entity), the
number of Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the holder of each Warrant shall be
entitled upon exercise to receive the kind and number of Shares or other
securities of the Company which such holder would have owned or have been
entitled to receive after the happening of any of the events described
above, had such Warrant been exercised immediately prior to the happening
of such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for
such event.
(b) (i) If the Company at any time or from time to time after the date
hereof shall distribute to all holders of Common Stock (including any such
distribution made to the shareholders of the Company in connection with a
consolidation or merger in which the Company is the continuing corporation)
evidences of its indebtedness, cash or assets (other than (A) distributions
and dividends payable in shares of Common Stock or (B) cash dividends or
distributions paid out of retained earnings or surplus legally available
for such dividends or distributions), then, in each case, the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of shareholders
entitled to receive such distribution by a fraction, the numerator of which
shall be the Market Price (as determined pursuant to Section 7(d)) per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive for all purposes) of the portion of the
evidences of indebtedness or assets so to be distributed, applicable to one
share, and the denominator of which shall be such Market Price per share of
Common Stock. Such adjustment shall become effective at the close of
business on such record date.
-11-
(ii) If any capital reorganization of the Company, or any
reclassification of the Common Stock, or any consolidation or merger
of the Company with or into any other person, or any sale, lease or
other transfer of all or substantially all of the assets of the
Company to any other person, shall be effected in such a way that the
holders of the holders of the Common Stock shall be entitled to
receive stock, securities, cash or other property (whether such stock,
securities, cash or other property are issued or distributed by the
Company or any other person) with respect to or in exchange for the
Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, lease or other
transfer, lawful and adequate provision shall be made whereby the
holders of the Warrants shall have the right to acquire and receive
upon exercise of such Warrants such shares of stock, securities, cash
or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger, sale, lease or other
transfer) with respect to or in exchange for such number of
outstanding shares of Common Stock as would have been received upon
exercise of such Warrants had such Warrants been exercised immediately
before such reorganization, reclassification, consolidation, merger,
sale, lease or other transfer, subject to adjustments (as determined
in good faith by the Board of Directors of the Company). Adjustments
for events subsequent to the effective date of such reorganization,
reclassification, consolidation, merger, sale, lease or other transfer
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Agreement. In any such event, effective
provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving person, or in any contract
of sale, merger, conveyance, lease, transfer or otherwise, so that the
provisions set forth herein for the protection of the rights of the
holders of the Warrants shall thereafter continue to be applicable;
and any such resulting or surviving person shall expressly assume the
obligation to deliver, upon exercise of the Warrants, such shares of
stock, securities, cash and other property. The provisions of this
Section 12(b)(ii) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, leases or other
transfers.
(c) No adjustment in the number of Shares purchasable hereunder shall
be required unless such adjustment would require an increase or decrease of
at least one percent (1.0%) in the number of Shares purchasable upon the
exercise of each Warrant; provided, however, that any adjustments that by
-----------------
reason of this Section 12(c) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations shall be made to the nearest cent and to the nearest
one-hundredth of a share, as the case may be.
(d) Whenever the number of shares of Common Stock purchasable upon the
exercise of any Warrant is adjusted as herein provided (whether or not the
Company then or thereafter elects to issue additional Warrants in
substitution for an adjustment in the number of Shares as provided in
Section 12(f)), the Exercise Price payable upon exercise of such Warrant
shall be adjusted by multiplying such Exercise Price immediately prior to
such adjustment by a fraction, of which the numerator shall be the number
of Shares purchasable upon the exercise of such Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Shares so purchasable immediately thereafter.
-12-
(e) For the purpose of this Section 12, the term "shares of Common
Stock" shall mean (i) the shares of stock designated as the Common Stock of
the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. If at any time, as a result of an
adjustment made pursuant to Section 12(a), the holders of Warrants shall
become entitled to purchase any shares of the Company other than shares of
Common Stock, thereafter the number of such other shares so purchasable
upon exercise of each Warrant and the applicable Exercise Price of such
shares shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
such shares contained in Section 12(a) through (d), inclusive, above, and
the provisions contained in this Agreement with respect to such shares,
shall apply on like terms to any such other shares.
(f) The Company may elect, in its sole discretion, on or after the
date of any adjustment required by paragraphs (a) of this Section 12, to
adjust the number of Warrants in substitution for an adjustment in the
number of Shares purchasable upon the exercise of a Warrant. Each of the
Warrants outstanding after such adjustment of the number of Warrants shall
be exercisable for the same number of Shares as immediately prior to such
adjustment. Each Warrant held of record prior to such adjustment of the
number of Warrants shall become that number of Warrants (calculated to the
nearest one-hundredth) obtained by dividing the applicable Exercise Price
in effect prior to adjustment of such Exercise Price by the applicable
Exercise Price in effect after adjustment of such Exercise Price. The
Company shall notify the holders of Warrants of its election to adjust the
number of Warrants in the same manner as provided in the first paragraph of
Section 14, indicating the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made, and shall give prompt
written notice thereof to the Warrant Agent. This record date may be the
date on which the Exercise Price is adjusted or any day thereafter. Upon
each adjustment of the number of Warrants pursuant to this Section 12(f)
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Warrants on such record date Warrant Certificates
evidencing, subject to Section 13, the additional Warrants to which such
holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Warrant Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Warrant Certificates evidencing all the
Warrants to be issued, executed and registered in the manner specified in
Sections 4 and 5 (and which may bear, at the option of the Company, the
applicable adjusted Exercise Price) and shall be registered in the names of
the holders of record of Warrant Certificates on the record date specified
in the notice.
(g) Except as provided in Section 12(a), no adjustment in respect of
any dividends shall be made during the term of a Warrant or upon the
exercise of a Warrant.
(h) Irrespective of any adjustments in an Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement. 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
-13-
the Warrant Certificate (including the rights, duties or obligations of the
Warrant Agent), and any Warrant Certificate thereafter issued, whether in
exchange or substitution for an outstanding Warrant Certificate or otherwise,
may be in the form as so changed.
SECTION 13. Fractional Shares. Notwithstanding any adjustment pursuant to
-----------------
Section 12 in the number of Shares purchasable upon the exercise of a Warrant,
the Company shall not be required to issue Warrants to purchase fractions of
Shares, or to issue fractions of Shares upon exercise of the Warrants, or to
distribute certificates which evidence fractional Shares.
SECTION 14. Notices to Warrantholders. Upon any adjustment of the number of
-------------------------
shares of Common Stock purchasable upon exercise of each Warrant, any Exercise
Price or the number of Warrants outstanding including any adjustment pursuant to
Section 12, the Company, within 20 calendar days thereafter, shall (i) cause to
be filed with the Warrant Agent a certificate signed by the Chairman of the
Board, Chief Executive Officer, the President or any Vice President of the
Company setting forth the event giving rise to such adjustment, such Exercise
Price and either the number of Shares purchasable upon exercise of each Warrant
or the additional number of Warrants to be issued for each previously
outstanding Warrant, as the case may be, after such adjustment and setting forth
in reasonable detail the method of calculation and the facts upon which such
adjustment was made, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant Certificates at such holder's address
appearing on the Warrant Register, written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 14. The Warrant Agent shall be fully protected
in relying in good faith on any such certificate and in making any adjustment
described therein and shall have no duty with respect to, and shall not be
deemed to have knowledge of, any adjustment unless and until it shall have
received such a certificate.
If:
(a) the Company shall order, declare, make or pay any dividend payable
in any securities upon its shares of Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Common Stock;
or
(b) the Company shall offer to the holders of its shares of Common
Stock any additional shares of Common Stock or securities convertible into
shares of Common Stock or any right to subscribe thereto; or
(c) there shall be a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation, merger or sale of
all or substantially all of its property, assets and business as an
entirety);
then the Company shall (i) cause written notice of such event to be filed with
the Warrant Agent and shall cause written notice of such event to be given to
each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrant Register, by first-class mail, postage prepaid,
and (ii) make a public announcement in a daily newspaper of general
-14-
circulation in New York City of such event, and make prompt written
notification thereof to the Warrant Agent, such giving of notice and publication
to be completed at least 10 calendar days (or 20 calendar days in any case
specified in clause (c) above) prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution or subscription rights, or for the
determination of stockholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be. The failure to give the
notice required by this Section 14 or any defect therein shall not affect the
legality or validity of any distribution, right, warrant, dissolution,
liquidation or winding up or the vote upon or any other action taken in
connection therewith.
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent. Any
--------------------------------------------------------
person into which the Warrant Agent may be merged or converted or with which it
may be consolidated, or any person resulting from any merger, conversion or
consolidation to which the Warrant Agent is a party, or any person succeeding to
the shareholder services business of the Warrant Agent, shall be the successor
to the Warrant Agent hereunder without the execution or filing of any document
or any further act on the part of any of the parties hereto, if such person
would be eligible for appointment as a successor Warrant Agent under the
provisions of Section 17. If any of the Warrant Certificates have been
countersigned but not delivered at the time such successor to the Warrant Agent
succeeds under this Agreement, any such successor to the Warrant Agent may adopt
the countersignature of the original Warrant Agent; and if at that time any of
the Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor Warrant Agent; and
in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.
If at any time the name of the Warrant Agent is changed and at such time
any of the Warrant Certificates have been countersigned but not delivered, the
Warrant Agent whose name has changed may adopt the countersignature under its
prior name; and if at that time any of the Warrant Certificates have not been
countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name; and in all such cases such
Warrant Certificates shall have the full force provided in the Warrant
Certificates and in this Agreement.
SECTION 16. Warrant Agent. The Warrant Agent undertakes only the duties and
-------------
obligations expressly imposed by this Agreement and the Warrant Certificate, in
each case upon the following terms and conditions, by all of which the Company
and the holders of Warrants, by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company, and the Warrant Agent assumes
no responsibility for the accuracy of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. Except as
otherwise provided herein, the Warrant Agent assumes no responsibility with
respect to the execution, delivery or distribution of the Warrant
Certificates.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or
in the Warrant
-15-
Certificates to be complied with by the Company, nor shall it at any time be
under any duty or responsibility to any holder of a Warrant to make or cause to
be made any adjustment in any Exercise Price or in the number of Shares issuable
upon exercise of any Warrant (except as instructed by the Company), or to
determine whether any facts exist that may require any such adjustments, or with
respect to the nature or extent of or method employed in making any such
adjustments when made.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may also be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company or
any holder of any Warrant Certificate in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with
the opinion or the advice of such counsel, absent gross negligence, bad
faith or willful misconduct (each as determined by a final order, judgment,
ruling or decree of a court of competent jurisdiction) in the selection and
continued retention of such counsel and the reliance on such counsel's
advice.
(d) The Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant Certificate for any action
taken in reliance on any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent under this
Agreement, to reimburse the Warrant Agent upon demand for all expenses,
taxes and governmental charges and other charges of any kind and nature
incurred by the Warrant Agent in the preparation, administration, delivery,
execution and amendment of this Agreement and the performance of its duties
under this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all losses, liabilities and expenses, including
judgments, damages, fines, penalties, claims, demands, settlements, costs
and reasonable counsel fees and expenses, for anything done or omitted by
the Warrant Agent arising out of or in connection with this Agreement
except as a result of its gross negligence, bad faith or willful misconduct
(each as determined by a final order, judgment, ruling or decree of a court
of competent jurisdiction). The costs and expenses incurred by the Warrant
Agent in enforcing the right to indemnification shall be paid by the
Company unless it is determined by a final order, judgment, decree or
ruling of a court of competent jurisdiction that the Warrant Agent is not
entitled to indemnification due to its gross negligence, bad faith or
willful misconduct.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of
Warrant Certificates furnishes the Warrant Agent with reasonable security
and indemnity for any costs or expenses that may be incurred. All rights of
action under this Agreement or under any of the Warrants may be enforced by
the Warrant Agent without the possession of any of the Warrant Certificates
or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any recovery
-16-
or judgment shall be for the ratable benefit of the registered holders of the
Warrants, as their respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, affiliate, director,
officer or employee thereof, may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company is interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it was
not the Warrant Agent under this Agreement, or a stockholder director,
officer or employee of the Warrant Agent, as the case may be. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity
for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything that it may do
or refrain from doing in connection with this Agreement except in
connection with its own gross negligence, bad faith or willful misconduct
(each as determined by a final order, judgment, decree or ruling of a court
of competent jurisdiction). In no event will the Warrant Agent be liable
for special, indirect, incidental, punitive or consequential loss or damage
of any kind whatsoever, even if the Warrant Agent has been advised of the
possibility of such loss or damage. Any liability of the Warrant Agent
under this Agreement to the Company will be limited to the amount of fees
paid by the Company to the Warrant Agent.
(i) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Warrant Agent for the carrying out or performing of the
provisions of this Agreement.
(j) The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due and validly authorized execution hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant
Certificate (except its due and validly authorized countersignature
thereof), nor shall the Warrant Agent by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation
of the Shares to be issued pursuant to this Agreement or any Warrant
Certificate or as to whether the Shares will when issued be validly issued,
fully paid and nonassessable or as to the Exercise Price or the number of
Shares issuable upon exercise of any Warrant.
(k) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Treasurer, the Secretary
or an Assistant Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and such instructions
shall be full authorization and protection to the Warrant Agent and the
Warrant Agent shall not be liable for any action taken, suffered to be
taken, or omitted to be taken by it in good faith in accordance with
instructions of any such officer or in good faith reliance upon any
statement signed by any one of such officers of the Company with respect to
any fact or matter (unless
-17-
other evidence in respect thereof is herein specifically prescribed) which may
be deemed to be conclusively proved and established by such signed statement.
(l) No provision of this Agreement shall require the Warrant Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(m) If the Warrant Agent shall receive any notice or demand (other
than notice of or demand for exercise of Warrants) addressed to the Company
by the holder of the Warrant Certificates pursuant to the provisions of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
(n) The provisions of this Section 16 shall survive the termination of
this Agreement, the exercise or expiration of the Warrants and the
resignation or removal of the Warrant Agent.
SECTION 17. Change of Warrant Agent. If the Warrant Agent resigns (such
-----------------------
resignation to become effective not earlier than 90 calendar days after the
giving of written notice thereof to the Company and the registered holders of
Warrant Certificates) or shall be adjudged a bankrupt or insolvent, or shall
file a voluntary petition in bankruptcy or make an assignment for the benefit of
its creditors or consent to the appointment of a receiver of all or any
substantial part of its property or affairs or shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay or meet
its debts generally as they become due, or if an order of any court shall be
entered approving any petition filed by or against the Warrant Agent under the
provisions of bankruptcy laws or any similar legislation, or if a receiver,
trustee or other similar official of it or of all or any substantial part of its
property shall be appointed, or if any public officer shall take charge or
control of it or of its property or affairs, for the purpose of rehabilitation,
conservation, protection, relief, winding up or liquidation, or becomes
incapable of acting as Warrant Agent or if the Board of Directors of the Company
by resolution removes the Warrant Agent (such removal to become effective not
earlier than 30 calendar days after the filing of a certified copy of such
resolution with the Warrant Agent and the giving of written notice of such
removal to the registered holders of Warrant Certificates), the Company shall
appoint a successor to the Warrant Agent. If the Company fails to make such
appointment within a period of 60 calendar days after such removal or after it
has been so notified in writing of such resignation or incapacity by the Warrant
Agent or by the registered holder of a Warrant Certificate (in the case of
incapacity), then the registered holder of any Warrant Certificate may apply to
any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor to the Warrant Agent, either
by the Company or by such a court, the duties of the Warrant Agent shall be
carried out by the Company. Any successor Warrant Agent, whether appointed by
the Company or by such a court, shall be a bank or trust company, in good
standing, incorporated under the laws of any state or of the United States of
America. As soon as practicable after appointment of the successor Warrant
Agent, the Company shall cause written notice of the change in the Warrant Agent
to be given to each of the registered holders of the Warrant Certificates at
such holder's address appearing on the Warrant Register. After appointment, the
successor Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
-18-
further act or deed. The former Warrant Agent shall deliver and transfer to the
successor Warrant Agent any property at the time held by it hereunder and
execute and deliver, at the expense of the Company, any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided for in this Section 17 or any defect therein, shall not affect the
legality or validity of the removal of the Warrant Agent or the appointment of a
successor Warrant Agent, as the case may be.
SECTION 18. Warrantholder Not Deemed a Stockholder. Nothing contained in
--------------------------------------
this Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the holders thereof the right to vote or to receive dividends or
to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or any other
matter, or any rights whatsoever as stockholders of the Company.
SECTION 19. Notices to Company and Warrant Agent. Any notice or demand
------------------------------------
authorized by this Agreement to be given or made by the Warrant Agent or by any
registered holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made if sent by certified mail, return receipt requested,
addressed (until another address is filed in writing by the Company with the
Warrant Agent), or by facsimile transmission with receipt confirmed, as follows:
AMF Bowling Worldwide, Inc.
0000 XXX Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel and Chief Financial Officer
Facsimile No.: (000) 000-0000
If the Company fails to maintain such office or agency or fails to give
such notice of any change in the location thereof, presentation may be made and
notices and demands may be served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by any
registered holder of any Warrant Certificate to the Warrant Agent shall be
sufficiently given if sent by certified mail, return receipt requested,
addressed (until another address is filed in writing by the Warrant Agent with
the Company), or by facsimile transmission with receipt confirmed, as follows:
Mellon Investor Services LLC
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
-19-
With a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
The Warrant Agent maintains a Warrant Agent Office at:
Mellon Investor Services LLC
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
SECTION 20. Payment of Taxes and Charges. The Company will from time to
----------------------------
time promptly pay to the Warrant Agent, or make provisions satisfactory to the
Warrant Agent for the payment of, all taxes and charges that may be imposed by
the United States or any state upon the Company or the Warrant Agent in
connection with the issuance or delivery of shares of Common Stock upon the
exercise of any Warrants, but any taxes or charges in connection with the
issuance of Warrant Certificates or certificates for shares of Common Stock in
any name other than that of the registered holder of the Warrant Certificate
surrendered shall be paid by such registered holder; and, in such case, the
Company shall not be required to issue or deliver any Warrant Certificate or
certificate for shares of Common Stock until such taxes or charges shall have
been paid or it has been established to the Company's satisfaction that no tax
or charge is due. The Warrant Agent shall have no duty or obligation under this
Section unless and until it is satisfied that all such taxes and/or charges have
been paid.
SECTION 21. Supplements and Amendments.
--------------------------
This Agreement constitutes the entire agreement and supersedes all other
prior agreements and understandings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof and may not be
amended, except in a writing signed by both of them.
The Company and the Warrant Agent may from time to time supplement or amend
this Agreement (a) without the approval of any holders of Warrant Certificates
in order to cure any ambiguity, manifest error or other mistake in this
Agreement, or to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder that the
Company and the Warrant Agent may deem necessary or desirable and that shall not
adversely affect, alter or change the interests of the holders of the Warrants
or (b) with the prior written consent of holders of the Warrants exercisable for
a majority of the Shares then issuable upon exercise of the Warrants then
outstanding; provided, however that each amendment or supplement that decreases
-----------------
the Warrant Agent's rights or increases its duties and responsibilities
hereunder shall also require the prior written consent of the Warrant Agent.
-20-
SECTION 22. Successors. All the covenants and provisions of this Agreement
----------
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
SECTION 23. Termination. This Agreement shall terminate on the Expiration
-----------
Date. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when all Warrants have been exercised. The provisions of Section
16, this Section 23, Section 24 and Section 25 shall survive such termination
and the resignation or removal of the Warrant Agent.
SECTION 24. Governing Law Venue and Jurisdiction. This Agreement and each
------------------------------------
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the laws of such State, irrespective of any
contrary result otherwise required by applicable conflict or choice of law
rules. Each party hereto consents and submits to the jurisdiction of the courts
of the State of New York and of the federal courts of the Southern District of
New York in connection with any action or proceeding brought against it that
arises out of or in connection with, that is based upon, or that relates to this
Agreement or the transactions contemplated hereby. In connection with any such
action or proceeding in any such court, each party hereto hereby waives personal
service of any summons, complaint or other process and hereby agrees that
service thereof may be made in accordance with the procedures for giving notice
set forth in Section 19 hereof. Each party hereto hereby waives any objection to
jurisdiction or venue in any such court in any such action or proceeding and
agrees not to assert any defense based on lack of jurisdiction or venue in any
such court in any such action or proceeding.
SECTION 25. Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement, and this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 26. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
SECTION 27. Headings. The headings of sections of this Agreement have been
--------
inserted for convenience of reference only, are not to be considered a part
hereof and in no way modify or restrict any of the terms or provisions hereof.
SECTION 28. Meaning of Terms Used in Agreement. The language used in this
----------------------------------
Agreement shall be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction shall be applied against
any party. Any references to any federal, state, local or foreign statute or law
shall also refer to all rules and regulations promulgated thereunder, unless the
context otherwise requires. Unless the context otherwise requires: (a) a term
has the meaning assigned to it by this Agreement; (b) forms of the word
"include" mean that the inclusion is not limited to the items listed; (c) "or"
is disjunctive but not exclusive; (d) words in the singular include the plural,
and in the plural include the singular; (e) provisions apply to successive
events and transactions; (f) "hereof", "hereunder", "herein" and
-21-
"hereto" refer to the entire Agreement and not any section or subsection; (g)
"$" means the currency of the United States; (h) "business day" means any day,
except for Saturday and Sunday, on which banks are not required or authorized by
law or executive order to close in New York City; and (i) "person" means a
natural person, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or other entity, or a governmental entity or any department, agency
or political subdivision thereof.
SECTION 29. Severability. If any part of this Agreement shall be held to be
------------
invalid or unenforceable by any court, or regulatory agency or body, such
invalidity or unenforceability shall attach only to such part and shall not
affect the validity or enforceability of the rest of this Agreement.
Furthermore, in lieu of any such invalid or unenforceable provision or
condition, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms and commercial effect to such invalid
or unenforceable provision as may be possible and be valid and enforceable.
[The next page is the signature page]
-22-
IN WITNESS WHEREOF, the parties hereto have caused this Series B Warrant
Agreement to be executed and delivered as of the day and year first above
written.
AMF BOWLING WORLDWIDE, INC.
By:
--------------------------------------------
Name:
Title:
MELLON INVESTOR SERVICES LLC
By:
--------------------------------------------
Name:
Title:
-23-
EXHIBIT A
[FORM OF FACE OF SERIES B WARRANT CERTIFICATE]
VOID AFTER MARCH 9, 2009
This Global Warrant Certificate is held by The Depositary Trust Company (the
"Depositary") or its nominee in custody for the benefit of the beneficial owners
hereof, and is not transferable to any person under any circumstances except
that (i) this Global Warrant Certificate may be exchanged in whole but not in
part pursuant to Section 6(a) of the Warrant Agreement, (ii) this Global Warrant
Certificate may be delivered to the Warrant Agent for cancellation pursuant to
Section 6(i) of the Warrant Agreement and (iii) this Global Warrant Certificate
may be transferred to a successor Depositary with the prior written consent of
the Company.(1)
Unless this Global Warrant Certificate is presented by an authorized
representative of the Depositary to the Company or the Warrant Agent for
registration of transfer, exchange or payment and any certificate issued is
registered in the name of Cede & Co. or such other entity as is requested by an
authorized representative of the Depositary (and any payment hereon is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of the Depositary), any transfer, pledge or other use hereof for
value or otherwise by or to any person is wrongful because the registered owner
hereof, Cede & Co., has an interest herein.(1)
Transfers of this Global Warrant Certificate shall be limited to transfers in
whole, but not in part, to nominees of the Depositary or to a successor thereof
or such successor's nominee, and transfers of portions of this Global Warrant
Certificate shall be limited to transfers made in accordance with the
restrictions set forth in Section 6 of the Warrant Agreement.(1)
No registration or transfer of the securities issuable pursuant to the Warrant
will be recorded on the books of the Company until such provisions have been
complied with.
------------------
(1) These paragraphs are to be included only if the Warrant is in the form of
Global Warrant Certificate.
A-1
CUSIP No. 030985 12 1
No. _____ WARRANT TO PURCHASE _____________
SHARES OF COMMON STOCK
AMF BOWLING WORLDWIDE, INC.
WARRANT TO PURCHASE COMMON STOCK
This Series B Warrant Certificate ("Warrant Certificate") certifies that
____________ or its registered assigns, is the registered holder of a Warrant
(the "Warrant") of AMF Bowling Worldwide, Inc., a Delaware corporation (the
"Company"), to purchase the number of shares (the "Shares") of Common Stock, par
value $0.01 per share (the "Common Stock"), of the Company set forth above. This
Warrant expires on March 9, 2009 (such date, the "Expiration Date") and entitles
the holder to purchase from the Company the number of fully paid and
nonassessable Shares set forth above at the exercise price (the "Exercise
Price") multiplied by the number of Shares set forth above (the "Exercise
Amount"), payable to the Company (i) by wire transfer in immediately available
funds of the Exercise Amount to an account of the Warrant Agent specified in
writing by the Warrant Agent for such purpose, no later than 5:00 p.m., New York
City time, on the business day immediately prior to the Settlement Date (as
defined in the Warrant Agreement), (ii) by surrender to the Warrant Agent
through the facilities of the Depositary for cancellation of shares of Common
Stock newly acquired upon exercise of the Warrant, valued at the Market Price
(as defined in the Warrant Agreement) equal to the Exercise Amount or (iii) by a
combination of the methods described in clauses (i) and (ii) above. The initial
Exercise Price shall be $27.19.
Subject to the terms and conditions set forth herein and in the Warrant
Agreement, this Warrant may be exercised by the Holder thereof, by:
(i) providing written notice of such election ("Warrant Exercise
Notice") to exercise the Warrant to the Warrant Agent at the address set
forth in the Warrant Agreement, "Re: AMF Bowling Worldwide, Inc. Warrant
Exercise", by hand or by facsimile, no later than 5:00 p.m., New York City
time, on the Expiration Date, which Warrant Exercise Notice shall be in the
form of an election to purchase Shares of Common Stock of the Company
substantially in the form set forth either (x) in Exhibit B-1 to the
Warrant Agreement, properly completed and executed by the Holder; provided
that such written notice may only be submitted by persons who hold
Definitive Warrant Certificates, or (y) in Exhibit B-2 to the Warrant
Agreement, properly completed and executed by the Holder; provided that
such written notice may only be submitted with respect to Warrants held
through the book-entry facilities of the Depositary, by or through persons
that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m., New York City
time, on the business day immediately prior to the Settlement Date, such
Warrants to the Warrant Agent by book-entry transfer through the facilities
of the Depositary or (y)
A-2
no later than 5:00 p.m., New York City time, on the business day
immediately prior to the Settlement Date, the Warrant Certificates
evidencing such Warrants to the Warrant Agent if Definitive Warrant
Certificates have been issued and delivered pursuant to the Warrant
Agreement; and
(iii) paying the applicable Exercise Amount, together with any
applicable taxes and governmental charges.
The Exercise Price and the number of shares of Common Stock
purchasable upon exercise of this Warrant are subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement.
No Warrant may be exercised prior to the Initial Distribution Date or
after the Expiration Date. After the Expiration Date, the Warrants will become
wholly void and of no value.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT
CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
A-3
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed by its duly authorized officer.
Dated:
--------------------------
AMF BOWLING WORLDWIDE, INC.
By
----------------------------
Name:
Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
as Warrant Agent
By:
----------------------
Name:
Title:
A-4
[FORM OF REVERSE OF SERIES B WARRANT CERTIFICATE]
AMF BOWLING WORLDWIDE, INC.
The Warrant evidenced by this Warrant Certificate is a part of a duly
authorized issue of Warrants to purchase a maximum of 1,724,138 shares of Common
Stock issued pursuant to that certain Series B Warrant Agreement, dated as of
March 8, 2002 (the "Warrant Agreement"), duly executed and delivered by the
Company and Mellon Investor Services LLC, as Warrant Agent (the "Warrant
Agent"). The Warrant Agreement hereby is incorporated by reference in and made a
part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy of
the Warrant Agreement may be inspected at the Warrant Agent Office and is
available upon written request addressed to the Company. All capitalized terms
used herein but not defined that are defined in the Warrant Agreement shall have
the meanings assigned to them therein.
Warrants may be exercised to purchase Shares from the Company from the
Initial Distribution Date through 5:00 p.m., New York City time, on the
Expiration Date, at the Exercise Price set forth on the face hereof, subject to
adjustment as described in the Warrant Agreement. Subject to the terms and
conditions set forth herein and in the Warrant Agreement, the Holder of the
Warrant evidenced by this Warrant Certificate may exercise such Warrant by:
(i) providing a Warrant Exercise Notice to the Warrant Agent at the
address set forth in the Warrant Agreement, "Re: AMF Bowling Worldwide,
Inc. Warrant Exercise", by hand or by facsimile, no later than 5:00 p.m.,
New York City time, on the Expiration Date, which Warrant Exercise Notice
shall be in the form of an election to purchase Shares of Common Stock of
the Company substantially in the form set forth either (x) in Exhibit B-1
to the Warrant Agreement, properly completed and executed by the Holder;
provided that such written notice may only be submitted by persons who hold
Definitive Warrant Certificates, or (y) in Exhibit B-2 to the Warrant
Agreement, properly completed and executed by the Holder; provided that
such written notice may only be submitted with respect to Warrants held
through the book-entry facilities of the Depositary, by or through persons
that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m., New York City
time, on the business day immediately prior to the Settlement Date, such
Warrants to the Warrant Agent by book-entry transfer through the facilities
of the Depositary or (y) no later than 5:00 p.m., New York City time, on
the business day immediately prior to the Settlement Date, the Warrant
Certificates evidencing such Warrants to the Warrant Agent if Definitive
Warrant Certificates have been issued and delivered pursuant to Section 3;
and
(iii) paying the applicable Exercise Amount, together with any
applicable taxes and governmental charges.
A-1-R
The Exercise Amount shall be payable (i) by wire transfer in immediately
available funds of the Exercise Amount to an account of the Warrant Agent
specified in writing by the Warrant Agent for such purpose, no later than 5:00
p.m., New York City time, on the business day immediately prior to the
Settlement Date, (ii) by surrender to the Warrant Agent through the facilities
of the Depositary for cancellation of shares of Common Stock newly acquired upon
exercise of the Warrant, valued at the Market Price (as defined in the Warrant
Agreement) equal to the Exercise Amount or (iii) by a combination of the methods
described in clauses (i) and (ii) above. The initial Exercise Price shall be
$27.19.
In the event that upon any exercise of the Warrant evidenced hereby the
number of Shares actually purchased shall be less than the total number of
Shares purchasable upon exercise of the Warrant evidenced hereby, there shall be
issued to the holder hereof, or such holder's assignee, a new Warrant
Certificate evidencing a Warrant to purchase the Shares not so purchased. No
adjustment shall be made for any cash dividends on any Shares issuable upon
exercise of this Warrant. After the Expiration Date, unexercised Warrants shall
become wholly void and of no value.
The Company shall not be required to issue fractions of Shares or any
certificates that evidence fractional Shares.
Warrant Certificates, when surrendered at the Warrant Agent Office by the
registered holder thereof in person or by a legal representative or attorney
duly authorized in writing, by mail or by book-entry delivery through the
facilities of the Depositary may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing a Warrant to purchase in the aggregate a like number of Shares.
No Warrants may be sold, exchanged or otherwise transferred in violation of
the Securities Act or state securities laws. The Company or the Warrant Agent
may require that, as a condition to any sale, exchange or transfer of a Warrant
that the holder deliver to the Company and the Warrant Agent an opinion of
counsel, which opinion of counsel shall be reasonably satisfactory to the
Company, to the effect that such sale, exchange or transfer is made in
compliance with the Securities Act and all applicable state securities laws or
pursuant to an exempt transaction under the Securities Act and such state
securities laws. The provisions of this paragraph shall not apply to the
exercise of any Warrant to the extent that the Shares issued upon such exercise
(and any unexercised portion of the Warrant so exercised) shall be issued to the
same registered holder that exercised such Warrant.
The Company and Warrant Agent may deem and treat the registered holder
hereof as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone) for the purpose of
any exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
[Balance of page intentionally remains blank]
A-2-R
EXHIBIT B-1
[FORM OF ELECTION TO EXERCISE FOR WARRANT HOLDERS
HOLDING WARANTS IN FORM OF DEFINITIVE WARRANT
CERTIFICATES WHEN WARRANT CERTIFICATES WILL BE
PHYSICALLY DELIVERED IN CONNECTION WITH THE
WARRANT EXERCISE]
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase ____ newly issued shares of Common Stock
of AMF Bowling Worldwide, Inc. (the "Company") at the Exercise Price of $____
per share. The undersigned represents, warrants and promises that it has the
full power and authority to exercise and deliver the Warrants exercised hereby.
The undersigned represents, warrants and promises that it has delivered or will
deliver in payment for such Shares $__________ [select one of the following]
[(i) by wire transfer in immediately available funds of the Exercise Amount to
an account of the Warrant Agent specified in writing by the Warrant Agent for
such purpose, no later than 5:00 p.m., New York City time, on the business day
immediately prior to the Settlement Date], [(ii) by surrender to the Warrant
Agent for cancellation of shares of Common Stock newly acquired upon exercise of
the Warrant, valued at the Market Price (as defined in the Warrant Agreement)
equal to the Exercise Amount] or [(iii) by a combination of the methods
described in clauses (i) and (ii) above, in accordance with the terms hereof]:
The undersigned requests that a certificate representing the Shares be
registered and delivered as follows:
------------------------------------
Name
------------------------------------
Address
------------------------------------
Delivery Address (if different)
B-1-1
If such number of Shares is less than the aggregate number of Shares purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the balance of such Shares shall be registered and delivered as follows:
------------------------------------
Name
------------------------------------
Address
------------------------------------
Delivery Address (if different)
--------------------------------- -------------------------------------
Social Security or Other Taxpayer Signature
Identification Number of Holder
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. If
the certificate representing the Shares
or any Warrant Certificate representing
Warrants not exercised is to be
registered in a name other than that in
which this Warrant Certificate is
registered, the signature of the holder
hereof must be guaranteed.
SIGNATURE GUARANTEED:
---------------------------------
X-0-0
XXXXXXX X-0
[FORM OF ELECTION TO EXERCISE WARRANT FOR
HOLDERS HOLDING WARRANTS THROUGH BOOK-ENTRY
FACILITIES OF THE DEPOSITORY TRUST COMPANY
WHEN EXERCISE OF WARRANT WILL OCCUR THROUGH
SUCH FACILITIES]
[TO BE COMPLETED BY DIRECT PARTICIPANT IN THE DEPOSITORY TRUST COMPANY]
AMF Bowling Worldwide, Inc.
Warrants to Purchase _____ Shares of Common Stock
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right,
represented by ______ Warrants held for its benefit through the book-entry
facilities of The Depository Trust Company (the "Depositary"), to purchase ____
newly issued shares of Common Stock of AMF Bowling Worldwide, Inc. (the
"Company") at the Exercise Price of $____ per share.
The undersigned represents, warrants and promises that (1) it has delivered
or will deliver no later than 5:00 p.m., New York time, on two business days
after the date on which this Warrant Exercise Notice is delivered the number of
Warrants specified below to the Warrant Agent's account at the Depositary by
book-entry transfer; (2) it has the full power and authority to exercise and
deliver the Warrants exercised hereby; and (3) it has delivered the exercise
price of U.S. $___ for each Warrant exercised hereby, [(i) by wire transfer in
immediately available funds of the Exercise Amount to an account of the Warrant
Agent specified in writing by the Warrant Agent for such purpose, no later than
5:00 p.m., New York City time, on the business day immediately prior to the
Settlement Date], [(ii) by surrender to the Warrant Agent through the facilities
of the Depositary for cancellation of shares of Common Stock newly acquired upon
exercise of the Warrant, valued at the Market Price (as defined in the Warrant
Agreement) equal to the Exercise Amount] or [(iii) by a combination of the
methods described in clauses (i) and (ii) above, in accordance with the terms
hereof]
The undersigned requests that the principal amount of Warrants exercised
hereby be in registered form in the authorized denominations, registered in such
names and delivered, all as specified in accordance with the instructions set
forth below; provided, that if the shares of Common Stock are evidenced by
global securities, the shares of Common Stock shall be registered in the name of
the Depositary or its nominee.
B-2-1
Dated: _______________
NOTE: THIS EXERCISE NOTICE MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. THE WARRANT AGENT SHALL NOTIFY
YOU (THROUGH THE CLEARING SYSTEM) OF (1) THE WARRANT AGENT'S ACCOUNT AT THE
DEPOSITARY TO WHICH YOU MUST DELIVER YOUR WARRANTS ON THE EXERCISE DATE AND (2)
THE ADDRESS, PHONE NUMBER AND FACSIMILE NUMBER WHERE YOU CAN CONTACT THE WARRANT
AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED.
NAME OF DIRECT PARTICIPANT IN THE DEPOSITARY:
------------------------------------------------------------------------------
(PLEASE PRINT)
ADDRESS:
---------------------------------------------------------------------
------------------------------------------------------------------------------
CONTACT NAME:
-----------------------------------------------------------------
ADDRESS:
----------------------------------------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
-------------------------------------
------------------------------------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
------------------------------------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
--------------------------------------------------------------
ACCOUNT FROM WHICH WARRANTS ARE BEING DELIVERED:
DEPOSITARY ACCOUNT NO.
--------------------------------------------------------
WARRANT EXERCISE NOTICES WILL ONLY BE VALID IF DELIVERED IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH IN THIS NOTIFICATION (OR AS OTHERWISE DIRECTED), MARKED
TO THE ATTENTION OF "AMF BOWLING WORLDWIDE, INC. WARRANT EXERCISE".
WARRANT HOLDER DELIVERING WARRANTS, IF OTHER THAN THE DIRECT DTC PARTICIPANT
DELIVERING THIS WARRANT EXERCISE NOTICE
NAME:
-------------------------------------------------------------------------
(PLEASE PRINT)
CONTACT NAME:
-----------------------------------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
-------------------------------------
------------------------------------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
------------------------------------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE):
------------------------------------------------------------------------------
ACCOUNT TO WHICH THE SHARES OF COMMON STOCK ARE TO BE CREDITED:
DEPOSITARY ACCOUNT NO.
--------------------------------------------------------
B-2-2
FILL IN FOR DELIVERY OF THE COMMON
STOCK, IF OTHER THAN TO THE PERSON
DELIVERING THIS WARRANT EXERCISE NOTICE:
NAME:
------------------------------------------------
(PLEASE PRINT)
ADDRESS:
---------------------------------------------
CONTACT NAME:
----------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL
CODE):
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFICATION NUMBER (IF APPLICABLE):
-----------------------------------------------------
NUMBER OF WARRANTS BEING EXERCISED:
-----------------------------------------------------
(ONLY ONE EXERCISE PER WARRANT
EXERCISE NOTICE)
Signature:
-------------------------------------------
Name:
------------------------------------------------
Capacity in which Signing:
---------------------------
Signature Guaranteed:
-----------------------------------------------------
B-2-3
EXHIBIT C
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, the undersigned registered holder hereby sells, assigns and
transfers unto
______________________________________
Name of Assignee
______________________________________
Address of Assignee
this Warrant Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint _________________ attorney, to
transfer the within Warrant Certificate to purchase _________ shares of Common
Stock to which the Warrant Certificate relates on the books of the Warrant
Agent, with full power of substitution.
______________________________________ ______________________________________
Dated Signature
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.
______________________________________
Social Security or Other Taxpayer
Identification Number of Assignee
SIGNATURE GUARANTEED:
_________________________________
C-1
