EXHIBIT 10.17
ICON HOLDINGS CORP.
and
STATE STREET BANK AND TRUST CO.
as Warrant Agent
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WARRANT AGREEMENT
Dated as of January __, 1998
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WARRANT AGREEMENT
This Agreement is made as of January __, 1998 between ICON Holdings Corp.,
a Delaware corporation (the Company), and State Street Bank & Trust Co. (the
"Warrant Agent").
RECITALS
A. The Company proposes to sell, pursuant to an Underwriting Agreement
dated as of December __, 1997 between the Company and Friedman, Billings, Xxxxxx
& Co., Inc. ("FBR") (the "Underwriting Agreement"), 12,500,000 shares (the
"Initial Shares") of Common Stock, par value $.01 per share, of the Company (the
"Common Stock"), to certain underwriters, for which FBR is acting as
representative (the "Underwriter") and up to 1,875,000 shares (the "Option
Shares") of Common Stock, to cover over-allotment, if any.
B. The Company deems it advisable, in consideration for the services
rendered to the Company by FBR in connection with the offering of the Common
Stock, to issue to FBR warrants (the "Firm Warrants") entitling the holders
thereof to purchase an aggregate of 839,564 shares of Common Stock. The Company
also deems it advisable, for the same consideration, to issue to FBR certain
additional warrants (the "Optional Warrants") entitling the holders thereof to
purchase an aggregate of 93,750 shares of Common Stock, subject to certain
adjustments as provided for in Section 1.04. (The Firm Warrants and the
Optional Warrants shall together be referred to as the "Warrants".) The shares
of Common stock issued upon exercise of the Warrants are referred to as the
"Warrant Shares".
C. The Company desires to enter into this Agreement to set forth the terms
and conditions of the Warrants and the rights of the holders thereof.
D. The Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to act in connection with the issuance,
exchange, transfers substitution and exercise of Warrants;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, EXECUTION, EXPIRATION AND TRANSFER OF WARRANT CERTIFICATES
SECTION 1.01. Form of Warrant Certificates. The Warrants shall be
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evidenced by certificates in temporary or definitive fully registered form (the
"Warrant Certificates") substantially in the form of Exhibit A in the case of
the Firm Warrants or, in the case of the Optional Warrants, in the form of
Exhibit B 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 rule or regulation made pursuant thereto or with any
role or regulation of any securities exchange, or to conform to usage, or as
consistently herewith may be determined by the officers executing such Warrant
Certificates as evidenced by their execution of the Warrant Certificates. Each
Warrant Certificate shall evidence the right, subject to the
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provisions of this Agreement and of the Warrant Certificate, to purchase the
number of shares of Common Stock stated therein, adjusted as provided for in
Article III, upon payment of the Exercise Price (as defined in Section 2.01).
SECTION 1.02. Execution of Warrant Certificates. Each Warrant Certificate,
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whenever issued, shall be dated as of the date of countersignature thereof by
the Warrant Agent either upon initial issuance or upon exchange, substitution or
transfer, shall be signed manually by, or bear the facsimile signature of, the
Chairman of the Board or the President or a Treasurer or a Vice President of the
Company, shall have the Company's seal or a facsimile thereof affixed or
imprinted thereon and shall be attested by the manual or facsimile signature of
the Secretary or an Assistant Secretary of the Company. In case any officer of
the Company whose manual or facsimile signature has been placed upon any Warrant
Certificate shall have ceased to be such before such Warrant Certificate is
issued, it may be issued with the same effect as if such officer had not ceased
to be such at the date of issuance. Warrant Certificates shall be countersigned
manually by the warrant Agent (or successor Warrant Agent) and shall not be
valid for any purpose unless so countersigned. Warrant Certificates may be
countersigned by the Warrant Agent (or successor Warrant Agent), however,
notwithstanding that the persons whose manual or facsimile signatures appear
thereon as proper officers of the Company shall have ceased to be such officers
at the time of such countersignature, issuance or delivery. 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 this Agreement any such person was not such an officer.
SECTION 1.03. Issuance, Delivery and Registration of Warrant Certificates.
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Upon receipt of written instructions from the Company, the Warrant Agent shall
issue and deliver, at the closing of the sale of the Initial Shares to the
Underwriters as provided in the Underwriting Agreement, to FBR or its designees:
(a) a Warrant Certificate representing the Firm Warrants, in substantially the
form of Exhibit A, and (b) a Warrant Certificate representing the Optional
Warrants, substantially in the form of Exhibit B. Additionally, the Warrant
Agent shall countersign and deliver Warrant Certificates upon exchange, transfer
or substitution for one or more previously countersigned Warrant Certificates as
hereinafter provided. The Warrant Agent Shall maintain books for the
registration of transfer and registration of Warrant Certificates (the "Warrant
Register").
SECTION 1.04. Exercise of and Adjustments to the Optional Warrants. The
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Optional Warrants shall not be exercisable in whole or in part until the
Expiration Date, which shall be the day thirty days following the date of the
Underwriting Agreement between the Company and FBR. The number of shares of
Common Stock which a holder of the Optional Warrants is entitled to receive upon
the exercise of the Optional Warrants is subject to certain adjustments. In the
event that FBR fails to exercise its right to purchase the total maximum number
of Option Shares provided for in the Underwriting Agreement, then the Optional
Warrants shall cease to be exercisable with respect to that number of shares of
Common Stock equal to (i) 1,875,000, minus (ii) the total number of Option
Shares purchased by and delivered to FBB, multiplied by (iii) 0.05. In the event
that PBR does not purchase any Option Shares within thirty days following the
date hereof, the Optional Warrants will expire in their entirety. The Warrant
Agent may not deliver Warrant Shares unless and until the Warrant Agent receives
written notice signed by both the Company and FBR which sets out the number of
shares of Common Stock which the holder of the Optional Warrants will be
entitled to receive upon
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exercise of the Optional Warrants, after making the adjustments described in
this Section 1.04.
SECTION 1.05. Transfer and Exchange of Warrant Certificates. The Warrant
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Agent, from time to time, shall register the transfer of any outstanding Warrant
Certificates in the Warrant Register upon surrender at the office or agency
maintained in The City of New York for such purpose or at the principal office
of the Warrant Agent (or successor Warrant Agent) of Warrant Certificates
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Company and the Warrant Agent, duly executed by the Warrant
holder or the Warrantholders' attorney duly authorized in writing, and evidence,
satisfactory to the Warrant Agent, of compliance with the provisions of Section
6.04. Upon any such registration of transfer, a new Warrant Certificate shall be
countersigned by the warrant Agent and issued to the transferee and the
surrendered Warrant Certificate shall be canceled by the Warrant Agent. Warrant
Certificates may be exchanged at the option of the holder thereof, upon
surrender, properly endorsed, at the office or agency maintained in The City of
New York for such purpose or at the principal office of the warrant Agent (or
successor Warrant Agent), with written instructions, for other Warrant
certificates countersigned by the Warrant Agent entitling the registered holder
thereof, subject to the provisions thereof and of this Agreement, to purchase in
the aggregate a like number of shares of Common Stock as the Warrant Certificate
so surrendered. In the case of a Warrant Certificate representing Optional
Warrants, if such Warrant Certificate is exchanged for a new certificate prior
to the Expiration Date, the newly issued Warrant Certificate shall also
represent Optional Warrants. The Company or the Warrant Agent may require the
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any such exchange or transfer.
ARTICLE II
SHARES OF COMMON STOCK ISSUABLE, EXERCISE PRICE,
EXPIRATION DATE AND EXERCISE OF WARRANTS
SECTION 2.01. Warrant Shares Issuable; Exercise Price; Expiration Date.
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Each Warrant Certificate shall entitle the registered holder thereof, subject to
the provisions
thereof and of this Agreement, to purchase from the Company at any time from the
effective date (the "Effective Date") of the registration statement filed on
Form S-1 under the Securities Act of 1933, as amended (the "Securities Act")
(or, in the case of the Optional Warrants, at any time from the Expiration Date)
to the close of business on the fifth anniversary of such date (or, if such date
is not a Business Day (as defined below), the first following Business Day) the
number of shares of Common Stock stated therein, adjusted as provided in Article
III, upon payment of $__.00 per share (which price is equal to the initial
public offering price), adjusted as provided in Article III. Such price, as in
effect from time to time as provided in Article III, is referred to as the
Exercise Prices. Each share of Common Stock issuable upon exercise of a Warrant
is referred to as a "Warrant Share". Each Warrant not exercised during the
period set forth above shall become void, and all rights thereunder and all
rights in respect thereof under this Agreement shall cease, at the end of such
period. For purposes of this Agreement, the term "Business Day" means any day
of the week other than a Saturday, Sunday or a day which in The City of New York
or in the city in which the principal office of the Warrant Agent is located
shall be a legal holiday or a day on which banking institutions are authorized
or required by law to close.
SECTION 2.02. Exercise of Warrants. (a) Warrants may be exercised by
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surrendering the Warrant Certificate evidencing such Warrants at the office or
agency maintained in The City of New York for such purpose or at the principal
office of the Warrant Agent (or successor Warrant Agent), with the Election to
Exercise form set forth on the reverse of the Warrant Certificate duly completed
and signed, and by paying in full to the Warrant Agent for the account of the
Company (i) in cash, or (ii) by certified or official bank check, or (iii) by
any combination of the foregoing, the Exercise Price for each Warrant Share as
to which Warrants are exercised and any applicable taxes, other than taxes that
the Company is required to pay hereunder. A Warrant holder may exercise such
holder's Warrant for the full number of Warrant Shares issuable upon exercise
thereof or any lesser number of whole Warrants Shares.
(b) As soon as practicable after the exercise of any Warrants and payment
by the Warrant holder of the full Exercise Price for the Warrant Shares as to
which such Warrants are then being exercised, the Warrant Agent shall
requisition from the transfer agent of the shares of Common Stock and deliver to
or upon the order of such Warrant holder a certificate or certificates for the
number of full Warrant Shares to which such Warrant holder is entitled,
registered in the name of such Warrant holder or as such Warrant holder shall
direct. Fractional Warrant Shares that otherwise would be issuable in respect
of such exercise shall be paid in cash as provided in Section 2.03, and the
number of Warrant Shares issuable to such Warrant holder shall be rounded down
to the next nearest whole number. If such Warrant Certificate shall not have
been exercised in full, the Warrant Agent on behalf of the Company will issue to
such Warrant holder a new Warrant Certificate exercisable for the number of
shares of Common Stock as to which such Warrant shall not have been exercised.
The warrant Agent on behalf of the Company will cancel all Warrants so
surrendered.
(c) Each person in whose name any such certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the holder of record of
such Warrant Shares on the date on which the Warrant Certificate was surrendered
to the Warrant Agent and payment of the Exercise Price and any applicable taxes
was made to the Warrant Agent for the account of the Company, irrespective of
the date of delivery of such certificate for Warrant Shares.
(d) All Warrant Shares will be duly authorized, validly issued, fully paid
and nonassessable. The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares. The Company will not be
required, however, to pay any tax imposed in connection with any transfer
involved in the issue of the Warrant Shares in a name other than that of the
Warrant holder. In such case, the Company will not be required to issue any
certificate for Warrant Shares until the person or persons requesting the same
shall have paid to the Company the amount of any such tax or shall have
established to the Company's satisfaction that the tax has been paid or that no
tax is due.
(e) Promptly after the Warrant Agent shall have taken the action required
in Section 2.02(b) or at such later time as may be mutually agreeable to the
Company and the Warrant Agent, the Warrant Agent shall account to the Company
with respect to any Warrants exercised and shall pay to the Company the amount
of money received by it upon the exercise of Warrants.
SECTION 2.03. No Fractional Shares To Be Issued. If more than one Warrant
---------------------------------
Certificate shall be surrendered for exercise at one time by the came holder,
the number of full Warrant Shares which shall be issuable upon exercise thereof
shall be computed on the basis of
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the aggregate number of Warrants so surrendered. The Warrantholders, by their
acceptance of the Warrant Certificates, expressly waive their right to receive
any fraction of a Warrant Share or a share certificate representing a fraction
of a Warrant Share. In lieu thereof, the Company will purchase such fractional
interest for an amount in cash equal to the current market value of such
fractional interest, as reasonably determined by the Board of Directors of the
Company.
SECTION 2.04. Cancellation of Warrants The Warrant Agent shall cancel any
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Warrant Certificate delivered to it for exercise, in whole or in part, or
delivered to it for transfer, exchange or substitution, and no Warrant
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. On request of the Company, the Warrant
Agent shall destroy canceled warrant Certificates held by it and shall deliver
its certificates of destruction to the Company, subject to record retention
requirements applicable to the Warrant Agent pursuant to the Exchange Act. If
the Company shall acquire any of the Warrants, such acquisition shall not
operate as a redemption or termination of the right represented by such Warrants
unless and until the Warrant Certificates evidencing such Warrants are
surrendered to the Warrant Agent for cancellation.
ARTICLE III
ADJUSTMENT OF EXERCISE PRICE; MERGER, ACQUISITION,
ETC.; RESERVATION OF SHARES OF COMMON STOCK, PAYMENT
OF TAXES
SECTION 3.01. Adjustment of Exercise Price and Number of Warrant
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Shares. (a) The Exercise Price shall be subject to adjustment from time to time
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as provided in this Article III. After each adjustment of the Exercise Price,
each Warrant holder shall at any time thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of Warrant Shares
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant to the
provisions of such Warrant immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment
(b) Fox purposes of making adjustments of the Exercise price pursuant
to this Article 711, the "Current Market Price" shall be determined as of the
date of the issuance or sale giving rise to the adjustment and shall be equal to
the last sale price with respect to shares of Common Stock as reported in the
consolidated transaction reporting system on that date. If there are no
reported transactions in the consolidated transaction reporting system on that
date, the "Current Market Price" shall be the average of the highest current
independent bid and lowest current independent offer for the shares.
SECTION 3.02. Exercise Price Adjustment Formula. If the Company
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issues or sells any shares of Common Stock for a price per share that is less
than the Current Market Price in effect at the time of such issuance or sale,
the Exercise Price immediately shall be adjusted by multiplying the Exercise
Price by (a) an amount equal to the sum of (i) the number of shares of Common
stock outstanding and deemed (in accordance with the provisions of Section 3.03)
to be outstanding immediately prior to such issuance and sale multiplied by the
Current Market Price at the time of such Issuance or sale and (ii) the total
consideration received and deemed (in
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accordance with the provisions of Section 3.03) to be received by the Company
upon such issuance and sale and (b) dividing the result by an amount equal to
(i) the sum of (A) the amount determined in (a) and (B) the product of the
number of shares issued or sold multiplied by the Current Market Price, minus
(ii) the consideration received.
SECTION 3.03. Constructive Issuance of Shares. (a) If the Company
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grants any rights or options (collectively referred to as "options") to
subscribe for or purchase any shares of Common Stock or any securities
(collectively referred to as "convertible securities") convertible into or
exchangeable for shares of Common Stock, whether or not any such options or the
right to convert or exchange any such convertible securities are immediately
exercisable, and the price per share for which shares of Common Stock are
issuable upon the exercise of such options or upon conversion or exchange of
such convertible securities (determined by dividing (i) the total consideration
received or receivable by the Company for the granting of such options, plus any
additional consideration payable to the Company upon the exercise of such
options, plus in the case of any such options which relate to convertible
securities any additional consideration payable to the Company upon the
conversion or exchange thereof by (ii) the maximum number of shares of Common
Stock issuable upon the exercise of such options or upon the conversion or
exchange of such convertible securities) shall be less than the Current Market
Price in effect as of the time of granting such options, the maximum number of
shares of Common Stock issuable upon the exercise of such options or upon
conversion or exchange of all convertible securities issuable upon the exercise
of such options shall be deemed, upon the granting of such options, to be
outstanding and to have been issued for such price per share. Except as provided
in Section 3.03(c), no further adjustment of the Exercise price shall be made
upon the issue or sale of shares of Common Stock upon the exercise of such
options or the conversion or exchange of such convertible securities.
(b) If the Company issues or sells any convertible securities (other
than securities referred to in Section 3.03(a)), whether or not the right to
convert or exchange any such convertible securities is immediately exercisable,
and the price per share for which the shares of Common stock are issuable upon
such conversion or exchange (determined by dividing (i) the total consideration
received or receivable by the Company for the issue or sale of such convertible
securities, plus any additional consideration payable to the Company upon the
conversion or exchange of such convertible securities by (ii) the maximum number
of shares of Common Stock issuable upon the conversion or exchange of such
convertible securities) shall be less than the Current Market Price in effect as
of the time of such issue or sale, the maximum number of shares of Common Stock
issuable upon conversion or exchange of all such convertible securities shall be
deemed, upon the issue or sale of such convertible securities, to be outstanding
and to have been issued for such price per share. Except as provided in Section
3.03(c), no further adjustment of the Exercise Price shall be made upon the
issue or sale of shares of Common Stock upon conversion or exchange of any such
convertible securities.
(c) If the exercise provided for in any option referred to in Section
3.03(a), or the rate at which any convertible security referred to in Section
3.03(a) or 3.03(b) is convertible into or exchangeable for shares of Common
Stock, shall change or a different exercise price or rate shall become effective
at any time or from time to time, the Exercise Price immediately shall be
adjusted to the Exercise Price that would have obtained had the adjustments made
and required to be made under this Section 3.03 upon the issuance or sale of
such options or such convertible securities been made upon the basis of (i) the
issuance of the number of Shares of Common Stock theretofore delivered upon the
exercise of such options or upon the conversion or
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exchange of such convertible securities and the total consideration received
therefor, (ii) the issuance of all shares of Common Stock and all other options
or convertible securities and the total consideration received therefor and
(iii) the original issuance at the time of such change of exercise price or rate
of any such options or convertible securities then outstanding and the total
consideration received therefor. On the expiration of any such option or the
termination of any such right to convert or exchange any such convertible
securities, the Exercise Price immediately shall be adjusted to the Exercise
Price that would have obtained (iv) had the adjustments made upon the issuance
of such options or such convertible securities been made upon the issuance of
only the number of shares of Common Stock actually delivered and the total
consideration received therefor upon the exercise of such options or upon the
conversion or exchange of such convertible securities and (v) had adjustments
been made on the basis of the Exercise Price as adjusted under clause (iv) of
this Section 3.03(c) for all issues or sales of shares of Common Stock, options
or convertible securities made after the issuance of such options or convertible
securities. If the exercise price provided for in any option referred to in
Section 3.03(a), or the rate at which any convertible security referred to in
Section 3.03(a) or 3.03(b) is convertible or exchangeable for shares of Common
Stock, shall decrease at any time pursuant to applicable provisions thereof
designed to protect against dilution, the Exercise price immediately shall be
decreased in the case of delivery of shares of Common Stock upon the exercise of
any such option or upon the conversion or exchange of any such convertible
securities, to the Exercise Price that would have obtained had the adjustment
made upon the issue or sale of such option or such convertible security been
made upon the basis of the issuance of the shares of Common Stock so delivered
and the total consideration received therefor.
(d) If any shares of Common Stock or any convertible securities or any
option shall be issued or sold for cash, the consideration received by the
Company shall be deemed to be the amount payable to the company therefor without
deduction of any expense incurred or any underwriting commission, concession or
discount paid or allowed by the Company in connection therewith. If any shares
of Common Stock or any convertible securities or any option shall be issued or
sold for a consideration other than cash, the consideration received by the
Company shall be deemed to be the fair value of such consideration as determined
by the Board of Directors of the Company without deduction of any expense
incurred or any underwriting commission, concession or discount paid or allowed
by the Company in connection therewith. If any shares of Common Stock or any
convertible securities or any option shall be issued in connection with a merger
of another corporation into the Company, the consideration received by the
Company shall be deemed to be the fair value as determined by the Board of
Directors of the Company of such portion of the assets of such merged
corporation as the Board of Directors shall reasonably determine to be
attributable to such shares of Common Stock or such option or convertible
securities, as the case may be.
SECTION 3.04. Stock Dividends. If the Company shall declare a
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dividend or any other distribution upon any capital stock which is payable in
shares of Common Stock, the Exercise Price shall be reduced to the quotient
obtained by dividing (i) the number of shares of Common Stock outstanding and
deemed (in accordance with the provisions of Section 3.03(c)) to be outstanding
immediately prior to such declaration multiplied by the then effective Exercise
Price by (ii) the total number of shares of Common Stock outstanding and deemed
(in accordance with the provisions of Section 3.03(c) to be outstanding
immediately after such declaration. All shares of Common Stock and all
convertible securities issuable in payment of any dividend or other distribution
upon the capital stock of the Company shall be deemed to have been issued or
sold without consideration.
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SECTION 3.05. Extraordinary Dividends and Distribution. If the
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Company shall declare a dividend or any other distribution upon the shares of
Common Stock payable otherwise than out of current earnings, retained earnings
or earned surplus and otherwise than in shares of Common Stock or convertible
securities, the Exercise Price shall be reduced by an amount equal, in the case
of a dividend or distribution in cash, to the amount thereof payable per share
of Common Stock or, in the case of any other dividend or other distribution, to
the fair value thereof per share of Common Stock at the time such dividend or
other distribution was declared, as reasonably determined by the Board of
Directors of the Company. A dividend or distribution other than in cash shall
be considered payable out of current earnings, retained earnings or earned
surplus only to the extent that such current earnings, retained earnings or
earned surplus are charged an amount equal to the fair value of such dividend or
distribution as reasonably determined by the Board of Directors of the Company.
SECTION 3.06. Stock Splits and Reverse Stock Splits. If the Company
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shall subdivide its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price shall be proportionately reduced and the number of
Warrant Shares issuable upon exercise of each Warrant shall be proportionately
increased. If the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price shall be proportionately
increased and the number of Warrant Shares issuable upon exercise of each
Warrant shall be proportionately decreased.
SECTION 3.07. Reorganizations and Asset Sales. If any capital
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reorganization or reclassification of the Company, or any consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of the assets of the Company shall be effected in such a way
that the holders of the shares of Common Stock shall be entitled to receive
securities or assets with respect to or in exchange for shares of Common Stock,
adequate provision shall be made, prior to and as a condition of such
reorganization, reclassification, consolidation, merger or sale, whereby each
Warrant holder shall have the right to receive, upon the terms and conditions
specified herein and in lieu of the Warrant Shares otherwise receivable upon the
exercise of such Warrants, such securities or assets as may be issued or payable
with respect to or in exchange for the number of outstanding shares of Common
Stock equal to the number of Warrant Shares otherwise receivable had such
reorganization, reclassification, consolidation, merger or sale not taken place.
In any such case appropriate provision shall be made with respect to the rights
and interests of such Warrant holder so that the provisions of this Agreement
shall be applicable with respect to any securities or assets thereafter
deliverable upon exercise of the Warrants. The Company shall not effect any
such consolidation, merger or sale unless prior to or simultaneously with the
consummation thereof the survivor or successor corporation resulting from such
consolidation or merger or the purchaser of such assets shall assume by written
instrument delivered to each holder of Warrants the obligation to deliver to
such holder such securities or assets as such holder may be entitled to receive.
SECTION 3.08. Covenant to Reserve Shares for Issuance on Exercise.
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(a) The Company will cause an appropriate number of shares of Common Stock to
be duly and validly authorized and reserved and will keep available out of its
authorized shares of Common Stock, solely for the purpose of issue upon exercise
of Warrants as herein provided, the full number of shares of Common Stock, if
any, then issuable if all outstanding Warrants then exercisable were to be
exercised. The Company covenants that all shares of Common Stock that shall be
so issuable shall be duly and validly issued and, upon payment of the Exercise
Price, fully paid and
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non-assessable.
(b) The Company hereby authorizes and directs its current and future
transfer agents for the shares of Common Stock at all times to reserve such
number of authorized shares as shall be requisite for such purpose. The Warrant
Agent is hereby authorized to requisition from time to time from any such
transfer agents share certificates required to honor outstanding Warrants upon
exercise thereof in accordance with the terms of this Agreement, and the Company
hereby authorizes and directs such transfer agents to comply with all such
requests of the Warrant Agent. The Company will supply such transfer agents
with duly executed stock certificates for such purposes. Promptly after the
date of expiration of the Warrants, the Warrant Agent shall certify to the
Company the aggregate number of Warrants then outstanding, and thereafter no
shares shall be reserved in respect of such Warrants.
SECTION 3.09. Warrant Agent Not Responsible for Validity of Shares.
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The Warrant Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock or of any securities or
property that at any time may be issued or delivered upon the exercise of any
Warrant or upon any adjustment pursuant to Article III, and it makes no
representation with respect thereto. The Warrant Agent shall not be responsible
for any failure of the Company to make any cash payment or to issue, transfer or
deliver any shares of Common Stock or share certificates or other securities or
property upon the surrender of any Warrant for the purpose of exercise or upon
any adjustment pursuant to Article III, or to comply with any of the covenants
of the Company contained in this Article III.
SECTION 3.10. Statements on Warrants. The form of Warrant
----------------------
Certificate need not be changed because of any adjustment made pursuant to this
Article III, and Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock as are stated
in the Warrant Certificates initially issued pursuant to this Agreement. The
Company, however, may at any time in its sole discretion (which shall be
conclusive) make any change in the form of Warrant Certificate that it may deem
appropriate and that does not affect the substance thereof; and any Warrant
Certificates thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant Certificate or otherwise, may be in the
form as so changed .
SECTION 3.11. Notice of Change in Securities Issuable, etc. Whenever
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the securities issuable or deliverable in exchange for Warrants is changed
pursuant to this Article III, the Company promptly shall file with the Warrant
Agent a certificate executed by its chief financial officer, setting forth in
reasonable detail the facts requiring the change and specifying the effective
date of such change and the number or amount of, and describing the shares or
other securities issuable or deliverable in exchange for, each Warrant as so
changed. The Company also shall mail such a notice to each Warrant holder.
Failure to file such statement or to publish such notice, or any defect in such
statement or notice, shall not affect the legality or validity of any such
change.
SECTION 3.12. References to Common Stock. Unless the context
--------------------------
otherwise indicates, all references to Common Stock in this Agreement and in the
Warrant Certificates, in the event of a change under this Article III, shall be
deemed to refer also to any other securities issuable or deliverable in exchange
for Warrants pursuant to such change.
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ARTICLE XV
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS
SECTION 4.01. No Rights as Shareholders. Nothing contained in this
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Agreement or in any Warrant Certificate shall be construed as conferring on any
Warrant holder any rights whatsoever as a shareholder of the Company, including
the right to vote at, or to receive notice of, any meeting of shareholders of
the Company; nor shall the consent of any such holder be required with respect
to any action or proceeding of the Company; nor shall any such holder, by reason
of the ownership or possession of a Warrant or the Warrant Certificate
representing the same, either at, before or after exercising such Warrant, have
any right to receive any cash dividends, stock dividends, allotments or rights,
or other distributions (except as specifically provided herein), paid, allotted
or distributed or distributable to the shareholders of the Company prior to the
date of the exercise of such Warrant, nor shall such holder have any right not
expressly conferred by such holder's Warrant or Warrant certificate,
SECTION 4.02. Mutilated or Missing Warrant Certificates. If any
-----------------------------------------
Warrant Certificate is lost, stolen, mutilated or destroyed, the Company in its
discretion may issue and the Warrant Agent may countersign, 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, upon receipt of proper affidavit or other evidence satisfactory to
the Company and the Warrant Agent (and surrender of any mutilated Warrant
Certificate) and bond of indemnity in fore and amount and with corporate surety
satisfactory to the Company and the Warrant Agent in each instance protecting
the Company and the Warrant Agent, a new Warrant Certificate of like tenor and
exercisable for an equivalent number of shares of Common Stock as the Warrant
Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate at any time shall be enforceable by anyone. An applicant for such a
substitute Warrant Certificate also shall comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe. All Warrant Certificates shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to
the replacement of lost, stolen, mutilated or destroyed Warrant Certificates,
and shall preclude any and all other rights or remedies notwithstanding any law
or statute existing or hereafter enacted to the contrary with respect to the
replacement of negotiable instruments or other securities without their
surrender.
SECTION 4.03. Liquidation, Merger, etc.; Notice to Warrantholders.
---------------------------------------------------
If:
(a) the Company shall authorize the issuance to all holders of Common
Stock of rights or warrants to subscribe for or purchase capital stock of the
Company or of any other subscription rights or warrants: or
(b) the Company shall authorize the distribution to all holders of
Common Stock of evidences of its indebtedness or assets (other than cash
dividends or cash distributions payable out of current earnings, retained
earnings or earned surplus or dividends payable in Common Stock); or
(c) there shall be proposed any consolidation or merger to which the
Company is to be a party and for which approval of the holders of Common Stock
is required, or the conveyance or transfer of the properties and assets of the
Company substantially as an
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entirety; or
(d) there shall be proposed the voluntary or involuntary dissolution,
liquidation or winding up of the Company; the Company shall cause to be filed
with the Warrant Agent and shall cause to be given to each Warrant holder, by
first-class mail, postage prepaid, a written notice stating (i) the date as of
which the holders of record of shares of Common Stock to be entitled to receive
any such rights, warrants or distribution are to be determined or (ii) the date
on which any consolidation, merger, conveyance, transfer, reorganization,
reclassification, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange the shares for securities
or other property, if any, deliverable upon the consolidation, merger,
conveyance, transfer, reorganization, reclassification, dissolution, liquidation
or winding up. Such notice shall be filed and mailed in the case of a notice
pursuant to (i) above at least ten calendar days before the record date
specified and in the case of a notice pursuant to clause (ii) above at least 20
calendar days before the earlier of the dates specified. From the time notice
is required to be given pursuant to this Section 4.03, the holders of Warrants
shall be entitled to exercise such Warrants regardless of the provisions of
Section 2.01.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Change of Warrant Agent. (a) The Warrant Agent, or
-----------------------
any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving 60 days' notice
in writing to the Company, except that such shorter notice may be given as the
Company, in writing, shall accept as sufficient. If the office of the Warrant
Agent becomes vacant by resignation or incapacity to act or otherwise, the
Company shall appoint a successor Warrant Agent in place of the Warrant Agent.
If the Company shall fail to make such appointment within a period of 60 days
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any holder of Warrants (who, with
such notice, shall submit such holder's Warrant Certificate for inspection by
the Company), then the holder of any Warrants may apply to any court of
competent jurisdiction for the appointment of a successor Warrant Agent.
(b) The Warrant Agent may be removed by the Company at any time upon
30 days' written notice to the Warrant Agent; provided, however, that the
-------- -------
Company shall not remove the Warrant Agent until a successor Warrant Agent
meeting the requirements hereof shall have been appointed.
(c) Any successor Warrant Agent, whether appointed by the Company or
by a court of competent jurisdiction, shall be a corporation or association
(including the Company) organized, in good standing and doing business under the
laws of the United states of America or any state thereof or the District of
Columbia. After appointment, any successor Warrant Agent shall be vested with
all the authority, powers, rights, immunities, duties and obligations of its
predecessor Warrant Agent with like effect as if originally named as warrant
Agent hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers and rights of such predecessor
Warrant Agent hereunder; and upon request of any successor Warrant Agent,
-12-
the Company shall make, execute, acknowledge and deliver any and all instruments
in writing to more fully and effectually vest in and confirm to such successor
Warrant Agent all such authority, powers, rights, immunities, duties and
obligations. Upon assumption by a successor Warrant Agent of the duties and
responsibilities hereunder, the predecessor Warrant Agent shall deliver and
transfer, at the expense of the Company, to the successor Warrant Agent any
property at the time held by it hereunder. As soon as practicable after such
appointment, the Company shall give notice thereof to the predecessor Warrant
Agent, the Warrantholders and each transfer agent for the shares of Common
Stock. Failure to give such notice, or any defect therein, shall not affect the
validity of the appointment of the successor Warrant Agent.
(d) Any corporation or association into which the Warrant Agent may be
merged or with which it may be consolidated, or any corporation or association
resulting from any merger or consolidation to which the Warrant Agent shall be a
party, shall be the successor Warrant Agent under this Agreement without any
further act. In case at the time such successor to the Warrant Agent shall
succeed to the agency created by this Agreement, any of the Warrant Certificates
shall have been countersigned but not delivered, any such successor to the
Warrant Agent may adopt the countersignature of the original Warrant Agent and
deliver such Warrant Certificates so countersigned, and in case at that time any
of the Warrant Certificates shall not have been countersigned, any successor 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 Warrant Certificates shall have the full force provided in
the in the Warrant Certificates and in this Agreement.
(e) In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent may adopt the countersignatures under its
prior name and deliver such Warrant Certificates 60 countersigned: and in case
at that time any of the Warrant Certificates shall not have been countersigned,
the Warrant Agent may countersign such Warrant Certificates either in its prior
name or in its changed name; and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates and in this
Agreement.
SECTION 5.02 Compensation; Further Assurances. The Company agrees
--------------------------------
(i) that it will pay the warrant Agent reasonable compensation for its Services
as Warrant Agent hereunder and, except as otherwise expressly provided, will pay
or reimburse the Warrant Agent upon demand for all reasonable expenses,
disbursements and advances incurred or made by the Warrant Agent in accordance
with any of the provisions of this Agreement (including the reasonable
compensation, expenses and disbursements of its agents and counsel) except any
such expense, disbursement or advance as may arise from its or any of their
negligence or bad faith; and (ii) 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 reasonably may be required
by the Warrant Agent for the carrying out or performing of the provisions of
thin Agreement.
SECTION 5.03. Reliance on Counsel. The Warrant Agent may consult
-------------------
with legal counsel (who may be legal counsel for the Company), and the written
opinion of such counsel or any advice of legal counsel subsequently confirmed by
a written opinion of such counsel shall be full and complete authorization and
protection to the Warrant Agent as to any action taken or omitted by it in good
faith and in accordance with such written opinion or advice.
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SECTION 5.04. Proof of Actions Taken. Whenever in the performance of
----------------------
its duties under this Agreement the Warrant Agent shall deem it necessary or
desirable that any matter be proved or established by the Company prior to
taking or suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed), in the absence
of bad faith on the part of the Warrant Agent, may be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the Warrant
Agent; and such Officers' Certificate, in the absence of bad faith on the part
of the Warrant Agent, shall be full warrant to the Warrant Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate: but in its discretion the Warrant
Agent in lieu thereof may accept other evidence of such fact or matter or may
require such further or additional evidence as to it may seem reasonable.
SECTION 5.05. Correctness of Statements. The Warrant Agent shall not
-------------------------
be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement or in the Warrant Certificates (except its
countersignature thereon) or be required to verify the same, and all such
statements and recitals are and shall be deemed to have been made by the Company
only.
SECTION 5.06. Validity of Agreement. The Warrant Agent shall not be
---------------------
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof or in respect of the validity or execution of any
Warrant Certificates (except its countersignature thereon); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Warrant Certificate; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or Any Warrants or as to whether any shares of Common Stock,
when issued, will be validly issued and fully paid and nonassessable.
SECTION 5 07. Use of Agents. The Warrant Agent may execute and
-------------
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents and the Warrant
Agent shall not be responsible for the misconduct or negligence of any agent or
attorney, provided due care had been exercised in the appointment and continued
employment thereof.
SECTION 5.08. Liability of Warrant Agent. The Warrant Agent shall
--------------------------
incur no liability or responsibility to the company or to any holder of Warrants
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. The Company agrees to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted in good faith by the Warrant Agent in
the execution of this Warrant Agreement, except as a result of the Warrant
Agent's gross negligence or willful misconduct or bad faith.
SECTION 5.09. Legal Proceedings. The Warrant Agent shall be under no
-----------------
obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one or more holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses that may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as
-14-
the Warrant Agent may consider proper, whether with or without any such security
or indemnity.
SECTION 5.10. Other Transactions in Shares of the Company. The
-------------------------------------------
Warrant Agent in its individual or any other capacity may become the owner of
the Warrants or other securities of the Company, or become pecuniarily
interested in any transaction in which the company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Warrant Agent under this Warrant Agreement. Nothing herein
shall preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
SECTION 5.11. Actions as Agent. The Warrant Agent shall act
----------------
hereunder solely as agent and not in a ministerial capacity, and its duties
shall be determined solely by the provisions hereof. The Warrant Agent shall
not be liable for anything which it may do or refrain from doing in good faith
in connection with this Agreement except for its own negligence or willful
misconduct or bad faith.
SECTION 5.12. Appointment and Acceptance of Agency. The Company
hereby appoints the Warrant Agent to act as agent for the Company in accordance
with the instructions set forth in this Agreement, and the Warrant Agent hereby
accepts the agency established by this Agreement and agrees to perform the same
upon the terms and conditions herein set forth.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Reservation of Shares. The Company at all times shall
---------------------
reserve and keep available such number of shares of its authorized but unissued
Common Stock as from time to time shall be sufficient to permit the exercise of
all outstanding Warrants. If at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient for such purpose, the Company
will take such action as, in the opinion of its counsel, may be necessary to
increase its authorized but unissued Common Stock to such number of shares as
shall be sufficient for such purpose. Prior to the issuance of any Warrant
Shares, the Company shall secure the listing of such Warrant Shares upon any
securities exchange upon which shares of Common Stock are then listed, if any.
SECTION 6.02. Registration of Warrant Shares. (a) The Company shall
------------------------------
cause the Warrant Shares to be registered under the Securities Act on the date
that they are issuable to FBR pursuant to the Underwriting Agreement and will
use its best efforts to keep such registration effective through the close of
business on the fifth anniversary of the Effective Date.
(b) If, at any time prior to the close of business on the fifth
anniversary of the Effective Date, there is no registration statement in effect
for the Warrant Shares, the Company, upon the written request of holders of
Warrants and of Warrant Shares representing an aggregate of 50% or more of the
Warrant Shares, will file with the Securities and Exchange Commission under the
Securities Act, such registration statements and amendments thereto and such
other fillings as may be required to permit the public offering and sale of such
Warrant Shares in compliance with the Securities Act. The Company shall be
required to register Warrant Shares only once pursuant to this Section 6.02(b).
-15-
(c) The Company will permit any Warrant Shares to be included, at the
request of the holders of such Warrant Shares, in any registration of securities
of the Company (other than shares of Common Stock for an employees' option or
stock purchase plan) under a registration statement filed by the Company under
the Securities Act at any time prior to the close of business on the seventh
anniversary of the Effective Date. The Company shall provide written notice to
the record holders of all Warrants and Warrant Shares at least 30 days prior to
the filing of any such registration statement sent by registered mail to the
address of record of each such holder.
(d) Each such holder shall pay the underwriting discount attributable
to such holder's Warrant Shares, any transfer tax payable with respect thereto
and the fees and expenses of such holder's counsel. All other expenses of
registration under Section 6.02(a), Section 6.02(b) or Section 6.02(c) shall be
borne by the Company.
(e) The Company will agree to indemnify the holders of Warrant Shares
that are included in a registration statement or amendments to existing
registration statements pursuant to this Section 6.02 substantially to the same
extent as the Company has agreed to indemnify the Underwriters in the
Underwriting Agreement and such holders will agree to indemnify the Company and
any underwriter with respect to information furnished by them in writing to the
Company for inclusion therein substantially to the same extent as the
Underwriters have indemnified the Company in the Underwriting Agreement.
(f) If the offering pursuant to any registration statement provided
for herein is made through underwriters, the Company will enter into an
underwriting agreement in customary form and indemnity, in customary form, such
underwriters and each person who controls any such underwriter within the
meaning of the Securities Act. Such underwriting agreement shall contain
provisions for the indemnification of the Company in customary form, provided
that the aggregate amount that may be recovered from any such underwriter
pursuant to such provisions shall be limited to the total price at which the
Warrant Shares purchased by any such underwriter under such underwriting
agreement were offered to the public.
SECTION 6.03 Enforcement of Warrant Rights. All rights of action are
-----------------------------
vested in the respective Warrantholders. Any holder of any Warrant, in his own
behalf and for his own benefit, may enforce, and may institute and maintain any
suit, action or proceeding against the company or the warrant Agent suitable to
enforce, or otherwise in respect of, his right to exercise his Warrant for the
purchase of the number of Warrant Shares issuable or deliverable in exchange
therefor, in the manner provided in the Warrant and in this Agreement.
SECTION 6.04. Negotiability and Ownership. The Warrants issued
---------------------------
hereunder shall not, for a period of one year following the Effective Date, be
sold, transferred, assigned or hypothecated by the holders thereof except (a) to
persons who are officers of FBR or (b) in the case of an individual, pursuant to
such individual's last will and testament or the laws of descent and
distribution and, in any case, only in compliance with the Securities Act. For
the purposes of this Section 6.04, the term "officers" shall refer to those
persons who are officers of FBR or who become officers of FBR at any time before
the expiration of the Warrants regardless of whether such persons are officers
of FBR at the time they sell, transfer, assign or hypothecate a Warrant. Any
attempt to sell, transfer, assign or hypothecate in contravention of this
Section shall be null and void.
-16-
SECTION 6.05. Warrant Legend. (a) Each Warrant shall contain a legend
--------------
in substantially the following form:
"THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT ARE SUBJECT TO THE CONDITIONS SPECIFIED IN THE AGREEMENT,
DATED JANUARY __, 1998, BETWEEN ICON HOLDINGS CORP. AND STATE STREET BANK
AND TRUST CO. ANY ATTEMPT TO TRANSFER THIS WARRANT OR ANY SHARE OF COMMON
STOCK ISSUED UPON EXERCISE OF THIS WARRANT, PRIOR TO JANUARY __, 1999, TO
ANY UNAUTHORIZED TRANSFEREE, SHALL BE NULL AND VOID. NO TRANSFER IN
VIOLATION OF SAID AGREEMENT SHALL BE EFFECTIVE. THIS WARRANT MAY NOT BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE AND CURRENT
REGISTRATION STATEMENT OR POSTEFFECTIVE AMENDMENT THERETO FOR SUCH SHARES
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR AN APPLICABLE EXEMPTION
UNDER THE ACT. THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
MAY NOT BE SOLD OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
OR POSTEFFECTIVE AMENDMENT THERETO FOR SUCH SHARES UNDER THE ACT OR AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER THIS ACT."
(b) Each certificate representing Warrant Shares, unless registered
pursuant to Section 6.02, shall contain a legend substantially in the following
form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
TRANSFERRED WITHOUT AN EFFECTIVE AND CURRENT REGISTRATION STATEMENT OR
POSTEFFECTIVE AMENDMENT THERETO FOR SUCH SHARES UNDER THE SECURITIES ACT OF
1933 OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THAT ACT. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE CONDITIONS SPECIFIED IN
THE AGREEMENT, DATED JANUARY __, 1998, BETWEEN ICON HOLDINGS CORP. AND
STATE STREET BANK & TRUST CO. ANY ATTEMPT TO TRANSFER THE SHARES
REPRESENTED BY THIS CERTIFICATE, PRIOR TO JANUARY __, 1999, TO ANY
UNAUTHORIZED TRANSFEREE, SHALL BE NULL AND VOID. NO TRANSFER IN VIOLATION
OF SAID AGREEMENT SHALL BE EFFECTIVE."
SECTION 6.06. Supplements and Amendments. (a) Notwithstanding the
--------------------------
provisions of Section 6 06(b), the Warrant Agent, without the consent or
concurrence of the registered holders of the Warrants, may enter into one or
more supplemental agreements or amendments with the Company for the purpose of
evidencing the rights of Warrantholders upon consolidation, merger, sale,
transfer or reclassification pursuant to Section 3.07, making any changes or
corrections in this Agreement that are required to cure any ambiguity, to
correct or supplement any provision contained hereon that may be defective or
inconsistent with any other
-17-
provision herein or any clerical omission or mistake or manifest error herein
contained, or making such other provisions in regard to matters or questions
arising under this Agreement as shall not adversely affect the interests of the
holders of the Warrants or be inconsistent with this Agreement or any
supplemental agreement or amendment.
(b) With the consent of the registered holders of at least a majority
in number of the Warrants at the time outstanding, the Company and the Warrant
Agent at any time and from time to time by supplemental agreement or amendment
may add any provisions to or change in any manner or eliminate any of the
provisions of this Agreement or of any supplemental agreement or modify in any
manner the rights and obligations of the Warrantholder and of the Company;
provided, however, that no such supplemental agreement or amendment, without the
consent of the registered holder of each outstanding Warrant affected thereby,
shall:
(1) alter the provisions of this Agreement so as to affect adversely
the terms upon which the Warrants are exercisable or may be redeemed; or
(2) reduce the number of Warrants outstanding the consent of whose
holders is required for any such supplemental agreement or amendment.
SECTION 6.07. Successors and Assigns. 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 6.08. Notices. Any notice or demand authorized by this
-------
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant to or on the Company shall be sufficiently given or made if sent by mail
first-class, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
ICON Holdings Corp.
000 Xxxxxxxxxx Xxx.
Xxxxxxxx, XX 00000-0000
Attention: Beaufort X.X. Xxxxxx
Any notice or demand authorized by this Agreement to be given or made
by the holder of any Warrant or by the Company to or on the Warrant Agent shall
be sufficiently givenor made if sent by mail first-class, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company), as follows:
State Street Bank and Trust & Co.
c/o Boston EquiServe
Corporate Reorganization
00 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: __________________
Any notice or demand authorized by this Agreement to be given or made
to the holder of any Warrants shall be sufficiently given or made if sent by
first-class mail, postage prepaid to the last address of such holder as it shall
appear on the Warrant Register.
-18-
SECTION 6.09. Applicable Law. The validity, interpretation and
--------------
performance of this Agreement and of the Warrant Certificate shall be governed
by the law of the State of New York without giving effect to the principles of
conflicts of laws thereof.
SECTION 6.10. Benefits of this Agreement. Nothing in this Agreement
--------------------------
expressed and nothing that may be implied from any of the provisions hereof is
intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the parties hereto and the holders of the Warrants any
right, remedy or claim under or by reason of this Agreement or of any covenant,
condition, stipulation, promise or agreement hereof, and all covenants,
conditions, stipulations, promises and agreements in this Agreement contained
shall be for the sole and exclusive benefit of the parties hereto and theft
successors and of the holders of the Warrants.
SECTION 6.11. Registered Warrantholders. Prior to due presentment
-------------------------
for registration of transfer, the Company and the Warrant Agent may deem and
treat the person in whose name any Warrants are registered in the Warrant
Register as the absolute owner thereof for all purposes whatever
(notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company or the Warrant Agent) and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary or be bound to
recognize any equitable or other claim to or interest in any Warrants on the
part of any other person and shall not be liable for any registration of
transfer of Warrants that are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with actual knowledge that a
fiduciary or nominee is committing a breach of trust in requesting such
registration of transfer or with such knowledge of such facts that its
participation therein amounts to bad faith. The terms "Warrantholder" and
"holder" of any "Warrants" and all other similar terms used herein shall mean
such person in whose name Warrants are registered in the Warrant Register.
SECTION 6.12. Inspection of Agreement. A copy of this Agreement
-----------------------
shall be available at all reasonable times for inspection by any Warrantholder
at the principal office of the Warrant Agent (or successor Warrant Agent). The
Warrant Agent may require any such Warrantholder to submit his Warrant
certificate for inspection by it before allowing such Warrantholder to inspect a
copy of this Agreement
SECTION 6.13. Headings. The Article and Section headings herein are
--------
for convenience only and are not a part of this Agreement and shall not affect
the interpretation thereof.
SECTION 6.14. Counterparts. The Agreement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original.
* * * * *
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto under their respective seals as of the day and year first above
written.
ICON HOLDINGS CORP.
[CORPORATE SEAL]
By:
Name:
----------------------------------
Title:
Attest:
Name:
Title:
STATE STREET BANK & TRUST CO.,
as Warrant Agent
[CORPORATE SEAL]
By:
Name:
----------------------------------
Title:
Attest:
Name:
Title:
-20-
EXHIBIT A
Exhibit A
[FORM OF FIRM WARRANT CERTIFICATE]
No. ________ ________ Warrants
WARRANTS
TO PURCHASE SHARES OF COMMON STOCK OF
ICON HOLDING CORP.
ICON Holdings Corp., a Delaware corporation (the "Company"), for value
received, hereby certifies that
or registered assigns, is the owner of the number of Firm Warrants, set forth
above, each of which represents the right, subject to the terms and conditions
hereof and of the Warrant Agreement hereafter referred to (the "Warrant
Agreement"), to purchase from the Company at any time, or from time to time,
from the date of original issuance of the Firm Warrants to the close of business
on the fifth anniversary of such date (or, if such date is not a Business Day
(as defined below), the first following Business Day) (the "Exercise Period"),
the number of shares of Common Stock, par value $.01 per share, of the Company
(the "Common Stock") described in the Warrant Agreement (each share of Common
Stock issuable upon exercise of a Firm Warrant is referred to as a "Warrant
Share"). Subject to the terms and conditions of the Warrant Agreement, the
exercise price per Firm Warrant represented by this Warrant Certificate shall be
$__.00 per share, adjusted as provided in Article III of the Warrant Agreement,
payable in full as to each Firm Warrant exercised at the time of purchase. The
term "Underwriting Agreement" as used herein refers to the Underwriting
Agreement dated ___________, 1997 between the Company and Friedman, Billings,
Xxxxxx & Co., Inc. The term "Exercise Price" as used herein refers to the
foregoing price per share in effect at any time.
This Firm Warrant may be exercised in whole or in part at any time or
from time to time during the Exercise Period. The portion of any Firm Warrant
not exercised during the Exercise Period shall become void, and all rights
hereunder and all rights in respect hereof and under the Warrant Agreement shall
cease at the end of the Exercise Period.
Each such purchase of Warrant Shares shall be made, and shall be
deemed effective for the purpose of determining the date of exercise, only upon
surrender hereof to the Company at the office or agency maintained for such
purpose in The City of New York or the principal office of [Name of Warrant
Agent], Warrant Agent (or any successor Warrant Agent), with the form of
Election to Exercise on the reverse hereof duly filled in and signed, and upon
payment in full to the Warrant Agent for the account of the Company of the
Exercise Price (i) in cash or (ii) by certified or official bank check or (iii)
by any combination of the foregoing, all as provided in the Warrant Agreement
and upon compliance with and subject to the conditions set forth herein and in
the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as
A-1
of January __, 1998 (the "Warrant Agreement"), between the Company and the
Warrant Agent and is subject to the terms and provisions of the Warrant
Agreement, which terms and provisions are hereby incorporated by reference
herein and made a part hereof. Copies of the Warrant Agreement and of the
Underwriting Agreement are available for inspection by the registered holder at
the principal office of the Warrant Agent (or successor Warrant Agent).
The Company shall not be required upon the exercise of the Firm
Warrants represented hereby to issue fractions of warrant shares or to
distribute share certificates that evidence fractional Warrant Shares. Every
holder of this Warrant Certificate expressly waives its right to receive any
fraction of a Warrant Share or a share certificate representing a fraction of a
Warrant Share. Fractional Warrant Shares that otherwise would be issuable in
respect of such exercise shall be paid in cash as provided in the Warrant
Agreement, and the number of Warrant Shares issuable to such Warrant holder
shall be rounded down to the next nearest whole number. If such Warrant
Certificate shall not have been exercised in full, the Warrant Agent on behalf
of the Company will issue to such Warrant holder a new Warrant Certificate
exercisable for the number of shares of Common Stock as to which such Firm
Warrant shall not have been exercised.
This Warrant Certificate may be exchanged either separately or in
combination with other Warrant Certificates at the office or agency maintained
in The City of New York for such purpose or at the principal office of the
Warrant Agent (or successor Warrant Agent) for new Warrant Certificates
representing the same aggregate number of Firm Warrants as were evidenced by the
Warrant Certificate or Warrant Certificates exchanged, upon surrender of this
Warrant Certificate and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement.
This Warrant Certificate is transferable (subject to restrictions set
forth in the Warrant Agreement) at the office or agency maintained in The City
of New York for such purpose or at the principal office of the Warrant Agent (or
successor Warrant Agent) by the registered holder hereof in person or by his
attorney duly authorized in writing, upon (i) surrender of this Warrant
Certificate and (ii) upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement. Upon any such transfer, a new
Warrant Certificate or new Warrant Certificates of different denominations,
representing in the aggregate a like number of Firm Warrants, will be issued to
the transferee. Every holder of Firm Warrants, by accepting this Warrant
Certificate, consents and agrees with the Company, the Warrant Agent and with
every subsequent holder of this Warrant Certificate that until due presentation
for the registration of transfer of this Warrant Certificate on the Warrant
Register maintained by the Warrant Agent, the Company and the Warrant Agent may
deem and treat the person in whose name this Warrant Certificate is registered
as the absolute and lawful owner for all purposes whatsoever and neither the
Company nor the Warrant Agent shall be affected by any notice to the contrary.
Nothing contained in the Warrant Agreement or in this Warrant
Certificate shall be construed as conferring on the holder of any Firm Warrants
or his transferee any rights whatsoever as a shareholder of the Company.
This Warrant Certificate shall not be valid unless countersigned
manually by the Warrant Agent.
A-2
The Warrant Agreement and each Warrant Certificate, including this
Warrant Certificate, shall be deemed a contract made under the laws of the State
of New York and for all purposes shall be construed in accordance with the laws
of the State of New York without giving effect to the principles of conflicts of
law thereof.
* * * * *
A-3
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated:
ICON HOLDINGS CORP.
[CORPORATE SEAL] By:
---------------------------
A-4
--------------------------------
ATTEST:
COUNTERSIGNED: [NAME OF WARRANT AGENT], as
Warrant Agent
By:
----------------------------
Authorized Signature
A-5
ELECTION TO EXERCISE
(To be executed upon exercise of Warrant)
TO [NAME OF COMPANY]:
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
____________ shares of Common Stock, as provided for therein, and tenders
herewith payment of the purchase price in full in the form of cash or a
certified or official bank check (or combination thereof) in the amount of $
___________ .
Please issue a certificate or certificates for such shares of Common Stock
in the name of:
PLEASE INSERT SOCIAL SECURITY Name________________________________
OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
______________________________ Address_____________________________
______________________________ Signature___________________________
____________________________________
Note: The above signature should
correspond exactly with the name on
the face of this Warrant Certificate
or with the name of assignee appearing
in the assignment form below.
Dated:______________________, 1998
A-6
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________________ hereby sells, assigns and transfer
unto, the within Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
__________________________ attorney, to transfer said Warrant Certificate on the
books of the within-named Company, with full power of substitution in the
premises.
Dated: ____________________________, 1998
________________________________________
NOTE: The above signature should correspond
exactly with the name on the face of this Warrant
Certificate.
A-7
Exhibit B
[FORM OF OPTIONAL WARRANT CERTIFICATE]
No. ________ ________ Warrants
WARRANTS
TO PURCHASE SHARES OF COMMON STOCK OF
ICON HOLDINGS CORP.
ICON Holdings Corp., a Delaware corporation (the "Company"), for value
received, hereby certifies that or registered assigns, is the owner
of the number of Optional Warrants, set forth above, each of which represents
the right, subject to the terms and conditions hereof and of the Warrant
Agreement hereafter referred to (the "Warrant Agreement"), to purchase from the
Company at any time, or from time to time, from the Expiration Xxxx, which is
thirty days following the date of the Underwriting Agreement, to the close of
business on the fifth anniversary of such date (or, if such date is not a
Business Day (as defined below), the first following Business Day) (the
"Exercise Period"), the number of shares of Common Stock, par value $.01 per
share, of the Company (the "Common Stocks") described in the Warrant Agreement
(each share of Common Stock issuable upon exercise of an Optional Warrant is
referred to as a "Warrant Share"), subject to certain adjustments. Subject to
the terms and conditions of the Warrant Agreement, the exercise price per
Optional Warrant represented by this Warrant Certificate shall be $__.00 per
share, adjusted as provided in Article III of the Warrant Agreement, payable in
full as to each Optional Warrant exercised at the time of purchase. The term
"Underwriting Agreement" as used herein refers to the Underwriting Agreement
dated December __, 1997 between the Company and Friedman, Billings, Xxxxxx &
Co., Inc. The term "Exercise Price" as used herein refers to the foregoing
price per share in effect at any time.
Subject to the terms and conditions of the Warrant Agreement, the
number of shares of Common Stock which the holder of this Warrant Certificate is
entitled to receive upon exercise of the Optional Warrants represented hereby is
subject to certain adjustments, as follows: in the event that FBR fails to
exercise its right to receive the total maximum number of Option Shares, then
the Optional Warrants shall cease to be exercisable with respect to that number
of shares of Common Stock equal to (i) 1,875,000, minus (ii) the total number of
Option Shares purchased by and delivered to FBR, multiplied by (iii) 0.05. In
the event that FBR does not purchase any Option Shares within thirty days
following the date hereof, the Optional Warrants will expire in their entirety.
The Warrant Agent may not deliver Warrant Shares pursuant to this Optional
Warrant unless and until the Warrant Agent receives written notice signed by
both the Company and FBR which sets out the number of shares of Common Stock
which the holder of the Optional Warrants will be entitled to receive.
This Optional Warrant may be exercised in whole or in part at any time
or from time to time during the Exercise Period. The portion of any Optional
Warrant not exercised during the Exercise Period shall become void, and all
rights hereunder and all rights in respect hereof and under the Warrant
Agreement shall cease at the end of the Exercise Period.
Each such purchase of Warrant Shares shall be made, and shall be
deemed effective for the purpose of determining the date of exercise, only upon
surrender hereof to the
B-1
Company ah the office or agency maintained for such purpose in The City of New
York or the principal office of [Name of Warrant Agent], Warrant Agent (or any
successor Warrant Agent), with the form of Election to Exercise on the reverse
hereof duly filled in and signed, and upon payment in full to the Warrant Agent
for the account of the Company of the Exercise Price (i) in cash or (ii) by
certified or official bank check or (iii) by any combination of the foregoing,
all as provided in the Warrant Agreement and upon compliance with and subject to
the conditions set forth herein and in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of January __, 1998 (the "Warrant Agreement"),
between the Company and the Warrant Agent and is subject to the terms and
provisions of the Warrant Agreement, which terms and provisions are hereby
incorporated by reference herein and made a part hereof. Copies of the Warrant
Agreement and of the Underwriting Agreement are available for inspection by the
registered holder at the principal office of the Warrant Agent (or successor
Warrant Agent).
The Company shall not be required upon the exercise of the Firm
Warrants represented hereby to issue fractions of Warrant Shares or to
distribute share certificates that evidence fractional Warrant Shares. Every
holder of this Warrant Certificate expressly waives its right to receive any
fraction of a Warrant Share or a share certificate representing a fraction of a
Warrant Share. Fractional Warrant Shares that otherwise would be issuable in
respect of such exercise shall be paid in cash as provided in the Warrant
Agreement, and the number of Warrant Shares issuable to such Warrant holder
shall be rounded down to the next nearest whole number. If such Warrant
Certificate shall not have been exercised in full, the Warrant Agent on behalf
of the Company will issue to such Warrant holder a new Warrant Certificate
exercisable [or the number of shares of Common Stock as to which such Firm
Warrant shall not have been exercised.
This Warrant Certificate may be exchanged either separately or in
combination with other Warrant Certificates at the office or agency maintained
in The City of New York for such purpose or at the principal office of the
Warrant Agent (or Successor Warrant Agent) for new Warrant Certificates
representing the same aggregate number of Firm Warrants as were evidenced by the
Warrant Certificate or Warrant Certificates exchanged, upon surrender of this
Warrant Certificate and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement.
This Warrant Certificate is transferable (subject to restrictions set
forth in the Warrant Agreement) at the office or agency maintained in The City
of New York for such purpose or at the principal office of the Warrant Agent (or
successor Warrant Agent) by the registered holder hereof in person or by his
attorney duly authorized in writing, upon (i) surrender of this Warrant
Certificate and (ii) upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement. Upon any such transfer, a new
warrant Certificate or new Warrant Certificates of different denominations,
representing in the aggregate a like number of Firm Warrants, will be issued to
the transferee. Every holder of Firm Warrants, by accepting this Warrant
Certificate, consents and agrees with the company, the Warrant Agent and with
every subsequent holder of this Warrant Certificate that until due presentation
for the registration of transfer of this Warrant Certificate on the Warrant
Register maintained by the Warrant Agent, the Company and the Warrant Agent may
deem and treat the person in whose name this Warrant Certificate is registered
as the absolute and lawful owner for all purposes whatsoever and neither the
Company nor the warrant Agent shall be affected by any
B-2
notice to the contrary.
Nothing contained in the Warrant Agreement or in this Warrant Certificate shall
be construed as conferring on the holder of any Firm Warrants or his transferee
any rights whatsoever as a shareholder of the Company,
This Warrant Certificate shall not be valid unless countersigned
manually by the Warrant Agent.
The Warrant Agreement and each Warrant Certificate, including this
Warrant Certificate, shall be deemed a contract made under the laws of the State
of New York and for all purposes shall be construed in accordance with the laws
of the State of New York without giving effect to the principles of conflicts of
law thereof.
* * * * *
B-3
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated:
ICON HOLDINGS CORP.
[CORPORATE SEAL] By:
---------------------------
B-4
--------------------------------
ATTEST:
COUNTERSIGNED: [NAME OF WARRANT AGENT], as
Warrant Agent
By:
-------------------------------
Authorized Signature
B-5
ELECTION TO EXERCISE
(To be executed upon exercise of Warrant)
TO [NAME OF COMPANY]:
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
____________ shares of Common Stock, as provided for therein, and tenders
herewith payment of the purchase price in full in the form of cash or a
certified or official bank check (or combination thereof) in the amount of $
___________ .
Please issue a certificate or certificates for such shares of Common Stock
in the name of:
PLEASE INSERT SOCIAL SECURITY Name_________________________
OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
______________________________ Address________________________
______________________________ Signature_______________________
_______________________________
Note: The above signature should
correspond exactly with the name
on the face of this Warrant
Certificate or with the name of
assignee appearing in the
assignment form below.
Dated:______________________, 1998
B-6
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________________ hereby sells, assigns and transfer
unto, the within Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
__________________________ attorney, to transfer said Warrant Certificate on the
books of the within-named Company, with full power of substitution in the
premises.
Dated: ____________________________, 1998
________________________________________
NOTE: The above signature should correspond
exactly with the name on the face of this Warrant
Certificate.
B-7
