Exhibit 4.2
[Five-Year Warrant Agreement]
TiVo Inc.
and
The Bank of New York
as Warrant Agent
WARRANT AGREEMENT
DATED as of August 28, 2001
TABLE OF CONTENTS
Page Number
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SECTION 1. Definitions................................................................................... 1
SECTION 2. Appointment of Warrant Agent.................................................................. 4
SECTION 3. Form of Warrant Certificates.................................................................. 4
SECTION 4. Execution of Warrant Certificates............................................................. 4
SECTION 5. Registration, Countersignature and Issuance of Temporary Warrant Certificates................. 5
SECTION 6. Registration of Transfers and Exchanges....................................................... 6
SECTION 7. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates............................ 13
SECTION 8. Offices for Exercise, Etc..................................................................... 13
SECTION 9. Duration of Warrants; Early Termination of Warrants........................................... 14
SECTION 10. Exercise, Exercise Price, Settlement and Delivery............................................. 14
SECTION 11. Cancellation of Warrant Certificates.......................................................... 17
SECTION 12. Adjustment of Exercise Price and Number of Shares Issuable.................................... 17
SECTION 13. Effect of Reclassification, Consolidation, Merger or Sale..................................... 26
SECTION 14. Taxes on Shares Issued........................................................................ 27
SECTION 15. Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock....................... 27
SECTION 16. Fractional Warrants and Fractional Shares..................................................... 28
SECTION 17. Notice to Warrantholders Prior to Certain Actions............................................. 28
SECTION 18. Merger, Consolidation or Change of Name of Warrant Agent...................................... 29
SECTION 19. Warrant Agent................................................................................. 29
SECTION 20. Disposition of Proceeds of Exercise of Warrants............................................... 31
SECTION 21. Change of Warrant Agent....................................................................... 31
SECTION 22. Notices to Company and Warrant Agent.......................................................... 31
SECTION 23. Supplements and Amendments.................................................................... 32
SECTION 24. Successors.................................................................................... 33
SECTION 25. Termination................................................................................... 33
SECTION 26. Governing Law................................................................................. 33
SECTION 27. Benefits of This Agreement.................................................................... 33
SECTION 28. Counterparts.................................................................................. 33
Exhibit A Form of Warrant............................................................................... A-1
Exhibit B Form of Transfer Letter of Representations.................................................... B-1
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WARRANT AGREEMENT ("Agreement") dated as of August 28, 2001, between
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TiVo Inc., a Delaware corporation (together with any successor thereto, the
"Company"), and The Bank of New York, a New York banking corporation, not in its
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individual capacity but solely as warrant agent (together with any successor
warrant agent, the "Warrant Agent").
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WHEREAS, the Company has entered into purchase or acquisition
agreements with certain purchasers or acquirors (the "Purchasers"), in which the
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Company has agreed to issue and/or sell to the Purchasers (i) an aggregate
principal amount of $51,750,000 of its 7% Convertible Senior Notes due 2006 (the
"Notes") to be issued under an Indenture dated as of August 28, 2001 between the
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Company and The Bank of New York, a New York banking corporation, as trustee (in
such capacity, the "Trustee"), (ii) warrants (each a "Warrant," and collectively
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the "Warrants", and the certificates evidencing the Warrants hereinafter
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referred to as the "Warrant Certificates") to purchase 2,682,600 shares of the
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Company's common stock, par value $.001 per share (the "Common Stock"), (iii)
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and 4,064,542 units, each consisting of (a) one warrant to purchase one share of
Common Stock and (b) one warrant to purchase 0.33 of one share of Common Stock.
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company to assist the Company in connection with the issuance, exchange,
cancellation, replacement and exercise of the Warrants, and this Agreement sets
forth, among other things, the terms and conditions on which the Warrants may be
issued, exchanged, cancelled, replaced and exercised;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Definitions. The terms defined in this Section 1 (except as
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herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Agreement shall have the respective meanings specified
in this Section 1. The words "herein," "hereof," "hereunder," and words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision. The terms defined in this Section include the
plural as well as the singular.
Affiliate: The term "Affiliate" of any specified person shall mean any
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other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For the purposes of this
definition, "control," when used with respect to any specified person means the
power to direct or cause the direction of the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Board of Directors: The term "Board of Directors" shall mean the Board
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of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.
Board Resolution: The term "Board Resolution" means a copy of a
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resolution certified by the Secretary or any Assistant Secretary of the Company
to have been duly adopted by the Board of
Directors, or duly authorized committee thereof (to the extent permitted by
applicable law), and to be in full force and effect on the date of such
certification, and delivered to the Warrant Agent.
Business Day: The term "Business Day" means each Monday, Tuesday,
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Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Office
is located are authorized or obligated by law or executive order to close or be
closed.
Cashless Exercise. The term "Cashless Exercise" shall have the meaning
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specified in Section 10(b).
Cashless Exercise Ratio: The term "Cashless Exercise Ratio" shall have
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the meaning specified in Section 10(b).
Close of business: The term "close of business" means 5 p.m. (New York
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City time).
Corporate Office: The term "Corporate Office," or other similar term,
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shall mean the office of the Warrant Agent maintained for the purpose of
exchanging, transferring or exercising the Warrants, which office is, at the
date as of which this Agreement is dated, located at 000 Xxxxxxx Xxxxxx, Xxxxx
00X, Xxx Xxxx, N.Y. 10286, Attention: Corporate Trust Administration.
Exchange Act: The term "Exchange Act" means the Securities Exchange
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Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Exercise Date: The term "Exercise Date" shall have the meaning
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specified in Section 10(c).
Exercise Form: The term "Exercise Form" shall have the meaning
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specified in Section 10(a).
Exercise Price: The term "Exercise Price" shall mean the exercise price
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as specified in the form of the Warrant Certificate (herein called the "Exercise
Price"), attached as Exhibit A hereto, subject to adjustment from time to time
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upon the occurrence of the events enumerated in Section 12.
Exercise Price Per Share: The term "Exercise Price Per Share" shall
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have the meaning specified in Section 10(b).
Expiration Time: The term "Expiration Time" shall have the meaning
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specified in Section 12(f).
Individual Accredited Investor: The term "Individual Accredited
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Investor" shall mean an individual "accredited investor" as defined in Rule
501(a)(5) or (6) of Regulation D under the Securities Act.
Institutional Accredited Investor: The term "Institutional Accredited
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Investor" shall mean an institutional "accredited investor" as such term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.
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Officer's Certificate: The term "Officer's Certificate", when used with
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respect to the Company, shall mean a certificate signed by one of the President,
the Chief Executive Officer, Chief Financial Officer, Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word added before or after the title "Vice President"), that is
delivered to the Warrant Agent.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion
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in writing signed by legal counsel, who may be an employee of or counsel to the
Company, which is delivered to the Warrant Agent.
Person: The term "person" shall mean an individual, a corporation, a
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limited liability company, an association, a partnership, an individual, a joint
venture, a joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
Registration Rights Agreement: The term "Registration Rights Agreement"
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means that certain Registration Rights Agreement, dated as of August 28, 2001,
between the Company and the Purchasers, as such agreement may be amended from
time to time.
Restricted Securities: The term "Restricted Securities" has the
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meaning specified in Section 6(c).
Rule 144A: The term "Rule 144A" shall mean Rule 144A as promulgated
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under the Securities Act.
Securities Act: The term "Securities Act" means the Securities Act of
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1933, as amended, and the rules and regulations promulgated thereunder.
Subsidiary: The term "Subsidiary" means a corporation more than 50% of
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the outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
Trading Day: The term "Trading Day" has the meaning specified in
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Section 12(h)(v).
Warrant Exercise Office. The term "Warrant Exercise Office" shall have
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the meaning specified in Section 10(a).
Warrantholder or holder: The terms "Warrantholder" or "holder" as
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applied to any Warrant, or other similar terms (but excluding the term
"beneficial holder"), shall mean any person in whose name at the time a
particular Warrant is registered on the Warrant register.
Warrant register: The term "Warrant register" shall mean the register
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maintained in the Corporate Office and in any other office or agency of the
Company as designated herein, in which,
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subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of the Warrants and transfers of Warrants.
SECTION 2. Appointment of Warrant Agent. The Company hereby appoints
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the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 3. Form of Warrant Certificates. The Warrant Certificates may
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have such letters, numbers or other marks of identification and such notations,
legends and endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any securities exchange or automated quotation system
on which the Warrants may be listed or designated for issuance, or to conform to
usage.
The Warrants shall be substantially in the form set forth in Exhibit A,
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which exhibit is hereby incorporated in and expressly made a part of this
Agreement. Each Warrant Certificate shall represent such of the outstanding
Warrants as shall be specified thereon.
Warrants will be issued in registered form as definitive Warrant
Certificates.
Each Warrant shall evidence the right, subject to the provisions of
this Agreement and of the applicable Warrant Certificate, to purchase one share
of Common Stock, subject to adjustment pursuant to the provisions of Section 12
hereof.
SECTION 4. Execution of Warrant Certificates. Each Warrant Certificate,
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whenever issued, shall be dated as of the date of countersignature thereof by
the Warrant Agent pursuant to Section 5 either upon initial issuance or upon
exchange, substitution or transfer, shall be signed manually by, or bear the
facsimile signature of, the Chairman of the Board or the Chief Executive Officer
or the President or Executive or Senior Vice President or any Vice President
(whether or not designated by a number or number of words added before or after
the title "Vice President") of the Company, and shall be attested by the manual
or facsimile signature of the Chief Financial Officer or Treasurer or Assistant
Treasurer or Secretary or any Assistant Secretary of the Company.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent
pursuant to Section 5, or disposed of by the Company, such Warrant Certificates
nevertheless may be countersigned and delivered or disposed of as though such
person had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Warrant Agreement any such person was not such an officer.
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SECTION 5. Registration, Countersignature and Issuance of Temporary
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Warrant Certificates.
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(a) Registration and Countersignature. Warrant Certificates
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distributed as provided for herein shall be registered in the names of the
record holders of the Warrant Certificates to whom they are to be distributed.
The Company and the Warrant Agent may deem and treat the registered
holder of a Warrant Certificate as the absolute owner thereof (notwithstanding
any notation of ownership or other writing thereon made by anyone), for the
purpose of any exercise or conversion thereof and any distribution to the holder
thereof and for all other purposes, and neither the Company nor the Warrant
Agent shall be affected by any notice to the contrary.
(b) Countersignature and Delivery. Subject to the second
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paragraph of Section 4, Warrant Certificates shall be countersigned by manual
signature and dated the date of countersignature by the Warrant Agent and shall
not be valid for any purpose unless so countersigned and dated. The Warrant
Certificates shall be numbered and shall be registered.
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed manually by, or bear the facsimile
signature of, the Chairman of the Board, the Chief Executive Officer, the
President , any Executive or Senior Vice President , or any Vice President
(whether or not designated by a number or number of words added before or after
the title "Vice President") and attested by the manual or facsimile signature of
the Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or any
Assistant Secretary of the Company, and shall specify the number of Warrants to
be countersigned, the date of such Warrants and such other information as is
necessary or as the Warrant Agent may reasonably request. Without any further
action by the Company, the Warrant Agent is authorized, upon receipt from the
Company at any time and from time to time of the Warrant Certificates, duly
executed as provided in Section 4 hereof, to countersign the Warrant
Certificates and make them available for delivery. Such countersignature shall
be by a duly authorized signatory of the Warrant Agent (although it shall not be
necessary for the same signatory to sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
countersigned any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who countersigned such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
countersigned on behalf of the Warrant Agent by such persons as, at the actual
time of countersignature of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.
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(c) Temporary Warrant Certificates. Pending the preparation of
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definitive Warrant Certificates, the Company may execute, and the Warrant Agent
shall, upon written request of the Company, countersign and make available for
delivery, temporary Warrant Certificates, which are printed, lithographed,
typewritten or otherwise produced, substantially of the tenor of the definitive
Warrant Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, as evidenced by their
execution of such Warrant Certificates.
The Company will promptly execute and deliver to the Warrant Agent
definitive Warrant Certificates. After the preparation of definitive Warrant
Certificates, the temporary Warrant Certificates shall be exchangeable for
definitive Warrant Certificates upon surrender of the temporary Warrant
Certificates at any office or agency maintained by the Company for that purpose
pursuant to Section 8 hereof. Subject to the provisions of Section 6(h) hereof,
such exchange shall be without charge to the holder. Upon surrender for
cancellation of any one or more temporary Warrant Certificates, the Company
shall execute, and the Warrant Agent shall countersign and deliver in exchange
therefor, one or more definitive Warrant Certificates representing in the
aggregate a like number of Warrants. Until so exchanged, the holder of a
temporary Warrant Certificate shall in all respects be entitled to the same
benefits under this Agreement as a holder of a definitive Warrant Certificate.
SECTION 6. Registration of Transfers and Exchanges.
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(a) The Warrant Agent shall from time to time register in the
Warrant register the transfer of any outstanding Warrant Certificates, upon
surrender thereof accompanied by a written instrument of transfer in the form of
the assignment appearing at the end of the form of the Warrant Certificate
attached as Exhibit A hereto, duly executed by the registered holder or holders
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thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney. Such Warrant register shall be in written form or in any
form capable of being converted into written form within a reasonable period of
time. The Warrant Agent is hereby appointed "Warrant registrar" for the purpose
of registering Warrants and transfers of Warrants as herein provided. Upon any
such registration of transfer, a new Warrant Certificate of like tenor and
representing in the aggregate a like number of Warrants shall be issued to the
transferee and the surrendered Warrant Certificate shall be cancelled by the
Warrant Agent.
Warrant Certificates may be exchanged at the option of the holders
thereof, when surrendered to the Warrant Agent at its Corporate Office, for
another Warrant Certificate or other Warrant Certificates of like tenor and
representing in the aggregate a like number of Warrants. Warrant Certificates
surrendered for exchange, transfer, exercise or conversion shall be cancelled by
the Warrant Agent. Warrant Certificates cancelled as provided in this Section 6
shall then be disposed of by the Warrant Agent in accordance with its customary
procedures.
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Neither the Company nor the Warrant Agent shall be required to exchange
or register a transfer of any of the Warrants surrendered for exercise or, if a
portion of any Warrant is surrendered for exercise, such portion thereof
surrendered for exercise.
The Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of Section 5 and this Section 6, the new Warrant
Certificates required pursuant to the provisions of this Section, and for the
purpose of any distribution of Warrant Certificates contemplated herein.
(b) Prior and as a condition to any sale or transfer of a Warrant
or the Common Stock issued upon exercise thereof that bears the restrictive
legend set forth in Section 6(c) or Section 6(d), respectively (other than to a
"Qualified Institutional Buyer" within the meaning of Rule 144A under the
Securities Act or pursuant to a registration statement that has been declared
effective under the Securities Act), such transferee shall, unless the Company
otherwise agrees in writing and so notifies the Warrant Agent, furnish to the
Company and the Warrant Agent a signed letter containing representations and
agreements relating to restrictions on transfer substantially in the form set
forth in Exhibit B to this Agreement and an opinion of counsel if the Company so
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requests (other than with respect to a transfer pursuant to an effective
registration statement under the Securities Act) and such certificates and other
information as the Company and/or the Warrant Agent reasonably may require to
confirm that any such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the Securities
Act.
(c) Every Warrant that bears or is required under this Section
6(c) to bear the legend set forth in this Section 6(c) (together with any Common
Stock issued upon exercise of the Warrants and required to bear the legend set
forth in Section 6(d), collectively, the "Restricted Securities") shall be
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subject to the restrictions on transfer set forth in this Section 6(c)
(including the legend set forth below), unless such restrictions on transfer
shall be waived by written consent of the Company, and the holder of each such
Restricted Security, by such holder's acceptance thereof, agrees to be bound by
all such restrictions on transfer. As used in Sections 6(c) and 6(d), the term
"transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.
Until two (2) years after the original issuance date of any Warrant,
any certificate evidencing such Warrant (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
exercise thereof which shall bear the legend set forth in Section 6(d), if
applicable) shall bear a legend in substantially the following form (unless such
Warrants have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or unless otherwise
agreed by the Company in writing, with notice thereof to the Warrant Agent):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
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AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE ISSUER,
(2) SO
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LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER APPEARING ON THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
APPEARING ON THIS SECURITY), (4) TO A PERSON THAT IS AN ACCREDITED
INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON THIS
SECURITY) AND THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION, AND A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS AN
EXHIBIT TO THE WARRANT AGREEMENT GOVERNING THIS SECURITY AND MAY BE
OBTAINED FROM THE WARRANT AGENT) IS DELIVERED PRIOR TO SUCH TRANSFER BY
THE TRANSFEREE TO THE ISSUER AND THE WARRANT AGENT, (5) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT, (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (7) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS. THE HOLDER
HEREOF AGREES, THAT PRIOR TO SUCH TRANSFER, IT WILL FURNISH TO THE
ISSUER AND THE WARRANT AGENT AN OPINION OF COUNSEL IF THE ISSUER SO
REQUESTS (OTHER THAN WITH RESPECT TO A TRANSFER PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT) AND SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS AND IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THE HOLDER HEREOF
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AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
SUCH LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS
AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN
ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT AND THAT IT IS HOLDING
THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3)
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT.
The Company may, but is not obligated to instruct the Warrant Agent to
place the following legend on any Warrant held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities Act)
of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY
BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO A
VALID EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
Any Warrant (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms may, upon surrender of the Warrant Certificate representing such
Warrant for exchange to the Warrant registrar in accordance with the provisions
of this Section 6, be exchanged for a new Warrant Certificate, of like tenor and
representing the same aggregate number of Warrants, which shall not bear the
restrictive legend required by this Section 6(c).
(d) Until the end of the holding period under Rule 144(k) of the
Securities Act (or any successor provision) applicable to the Common Stock
issued upon exercise of a Warrant, the stock certificate representing such
Common Stock shall bear a legend in substantially the following form (unless
such Common Stock has been sold pursuant to the exemption from registration
provided by Rule 144 under the Securities Act or pursuant to a registration
statement that has been declared effective under the Securities Act, and which
continues to be effective at the time of such transfer, or such Common Stock has
been issued upon the exercise of Warrants that have been transferred pursuant to
a registration statement that has been declared effective under the Securities
Act, and which was effective at the time of such transfer, or unless otherwise
agreed by the Company in writing with written notice thereof to the Warrant
Agent and any transfer agent for the Common Stock):
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
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AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE ISSUER,
(2) IN THE EVENT THIS SECURITY BECOMES ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE
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SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER APPEARING ON THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER APPEARING ON THIS SECURITY), (4) TO A PERSON THAT IS AN
ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON
THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION, AND A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS AN
EXHIBIT TO THE WARRANT AGREEMENT GOVERNING THIS SECURITY AND MAY BE
OBTAINED FROM THE TRANSFER AGENT) IS DELIVERED PRIOR TO SUCH TRANSFER
BY THE TRANSFEREE TO THE ISSUER AND THE TRANSFER AGENT, (5) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT, (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (7) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS. THE
HOLDER HEREOF AGREES, THAT PRIOR TO SUCH TRANSFER, IT WILL FURNISH TO
THE ISSUER AND THE TRANSFER AGENT AN OPINION OF COUNSEL IF THE ISSUER
SO REQUESTS (OTHER THAN WITH RESPECT TO A TRANSFER PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT) AND
-10-
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY THE HOLDER OF THIS SECURITY COMPLIES
WITH THE FOREGOING RESTRICTIONS AND IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER HEREOF AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR
THE BENEFIT OF THE ISSUER THAT IT IS (1) AN ACCREDITED INVESTOR AS
DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (2) A NON-U.S. PERSON
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
The Company may, but is not obligated to instruct the transfer agent
for the Company's Common Stock to place the following legend on any certificate
evidencing shares of Common Stock held by or transferred to an "affiliate" (as
defined in Rule 501(b) of Regulation D under the Securities Act) of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY
BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO A
VALID EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of the
certificates representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be exchanged for
a new certificate or certificates for a like aggregate number of shares of
Common Stock, which shall not bear the restrictive legend required by this
Section 6(d).
(e) Any Warrant or Common Stock issued upon the exercise of a
Warrant that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor rule), is
purchased or owned by the Company or any Affiliate thereof may not be resold by
the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction that results in such Warrants or Common Stock,
as the case may be, no longer being
-11-
"restricted securities" (as defined under Rule 144). Notwithstanding any
provision of Section 6 to the contrary, in the event Rule 144(k) as promulgated
under the Securities Act (or any successor rule) is amended to change the two-
year period under Rule 144(k) (or the corresponding period under any successor
rule), from and after receipt by the Warrant Agent of the Officer's Certificate
and Opinion of Counsel provided for in this Section 6(f), (i) each reference in
Section 6(c) and 6(d) to "two (2) years" shall be deemed for all purposes hereof
to be references to such changed period and (ii) all corresponding references in
the Warrants shall be deemed for all purposes hereof to be references to such
changed period, provided that such changes shall not become effective if they
are otherwise prohibited by, or would otherwise cause a violation of, the then-
applicable federal securities laws. As soon as practicable after the Company has
knowledge of the effectiveness of any such amendment to change the two-year
period under Rule 144(k) (or the corresponding period under any successor rule),
unless such changes would otherwise be prohibited by, or would otherwise cause a
violation of, the then-applicable securities law, the Company shall provide to
the Warrant Agent an Officer's Certificate and Opinion of Counsel informing the
Warrant Agent of the effectiveness of such amendment and the effectiveness of
the foregoing changes to Sections 6(c) and 6(d) and the Warrants. The provisions
of this Section 6(f) will not be effective until such time as the Opinion of
Counsel and Officer's Certificate have been received by the Warrant Agent
hereunder. This Section 6(f) shall apply to successive amendments to Rule 144(k)
(or any successor rule) changing the holding period thereunder.
(g) The Warrant Agent shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Agreement or under applicable law with respect to any
transfer of any interest in any Warrant other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Agreement, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof and thereof.
(h) No service charge shall be charged to the Warrantholder for
any exchange or registration of transfer of Warrants, but the Company may
require payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection with the issue and
delivery of Warrant Certificates in any name other than that of such
Warrantholder.
(i) All Warrants surrendered for the purpose of exercise,
repurchase, exchange or registration of transfer, shall, if surrendered to the
Company or any Warrant registrar, be surrendered to the Warrant Agent and
promptly canceled by it, or if surrendered to the Warrant Agent, shall be
promptly canceled by it, and no Warrants shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Agreement. The Warrant
Agent shall dispose of canceled Warrants in accordance with its customary
procedures. If the Company shall acquire any of the Warrants, such acquisition
shall not operate as a redemption of satisfaction of the indebtedness
represented by such Warrants unless and until the same are delivered to the
Warrant Agent for cancellation.
(k) During any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, Warrantholders (or holders of interests
therein) and prospective purchasers
-12-
designated by such Warrantholders (or such holders of interests therein) shall
have the right to obtain from the Company upon request by such Warrantholders
(or such holders of interests) or prospective purchasers the information
required by paragraph (d)(4)(i) of Rule 144A in connection with any transfer or
proposed transfer of such Warrants or interests. In addition, if the Common
Stock is eligible for sale pursuant to Rule 144A, the holders of the shares of
Common Stock issuable upon exercise of the Warrants and prospective purchasers
designated by such holders shall have the right to obtain from the Company upon
request by such holder or prospective purchasers, during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, the
information required by paragraph (d)(4)(i) of Rule 144A in connection with any
transfer or proposed transfer of such shares of Common Stock.
SECTION 7. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
-----------------------------------------------------
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent of
------------
the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity satisfactory to them and, in the
case of mutilation or defacement, upon surrender thereof to the Warrant Agent
for cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide purchaser
---- ----
or holder in due course, the Company shall execute, and an authorized signatory
of the Warrant Agent shall manually countersign and make available for delivery,
in exchange for or in lieu of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate, a new Warrant Certificate representing a like number of
Warrants, bearing a number or other distinguishing symbol not contemporaneously
outstanding. Every substitute Warrant Certificate executed and delivered
pursuant to this Section 7 in lieu of any lost, stolen or destroyed Warrant
Certificate shall constitute an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of
(but shall be subject to all the limitations of rights set forth in) this
Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section 7 are exclusive with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates and shall preclude (to the
extent lawful) any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates.
The Warrant Agent is hereby authorized to countersign in accordance
with the provisions of this Agreement and make available for delivery the new
Warrant Certificates required pursuant to the provisions of this Section 7.
SECTION 8. Offices for Exercise, Etc. So long as any of the Warrants
-------------------------
remain outstanding, the Company shall designate and maintain in the Borough of
Manhattan, the City of New York: (a) an office or agency where the Warrant
Certificates may be presented for exercise, (b) an office or agency where the
Warrant Certificates may be presented for registration of transfer and for
exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 5(c) hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The
-13-
Company may from time to time change or rescind such designation, as it may deem
desirable or expedient; provided, however, that an office or agency shall at all
times be maintained in the Borough of Manhattan, City of New York, as provided
in the first sentence of this Section 8. In addition to such office or offices
or agency or agencies, the Company may from time to time designate and maintain
one or more additional offices or agencies within or outside the Borough of
Manhattan, City of New York, where Warrant Certificates may be presented for
exercise or for registration of transfer or for exchange, and the Company may
from time to time change or rescind such designation, as it may deem desirable
or expedient. The Company will give to the Warrant Agent written notice of the
location of any such office or agency and of any change of location thereof. The
Company hereby designates the Warrant Agent's Corporate Office, as the initial
agency maintained for each such purpose. In case the Company shall fail to
maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands may
be made and notice may be served at the Corporate Office and the Company
appoints the Warrant Agent as its agent to receive all such presentations,
surrenders, notices and demands.
SECTION 9. Duration of Warrants; Early Termination of Warrants.
---------------------------------------------------
(a) The Warrants shall expire at 5:00 p.m., New York City time,
on August 28, 2006 (such date, the "Expiration Date"). Each Warrant may be
---------------
exercised on any Business Day on or prior to the close of business on the
Expiration Date.
Any Warrant not exercised before the close of business on the Expiration
Date as the case may be, shall become void, and all rights of the holder under
the Warrant Certificate evidencing such Warrant and under this Agreement shall
cease.
SECTION 10. Exercise, Exercise Price, Settlement and Delivery.
-------------------------------------------------
(a) Warrants may be exercised during the period commencing on the
day after the date of the Warrant Agreement and ending at 5:00 p.m., New York
City time, on the Expiration Date, by (i) surrendering, at any office or agency
maintained for that purpose by the Company pursuant to Section 8 (each a
"Warrant Exercise Office"), the Warrant Certificate evidencing such Warrants
-----------------------
with the exercise form appended to the Warrant Certificate (the "Exercise Form")
-------------
duly completed and signed by the registered holder or holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney,
and in the case of a transfer, such signature shall be guaranteed by an eligible
guarantor institution, (ii) sending copies of such Exercise Form via facsimile
to the Company, attention General Counsel ((000) 000-0000) and Xxxxxx & Xxxxxxx,
attention Xxxx Xxxxxxx ((000) 000-0000), (iii) paying in full the Exercise Price
for each such Warrant exercised and any other amounts required to be paid
pursuant to Section 10(b) hereof, (iv) except in the event of a Cashless
Exercise (as defined in Section 10(b)) or in the event of the exercise of a
Warrant that has been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, and which was effective at the
time of such transfer, furnishing to the Company and the Warrant Agent a signed
letter containing certain representations and agreements relating to the
restrictions on transfer set forth in Exhibit B hereto and an opinion of
---------
-14-
counsel if the Company so requests, and (v) providing such additional
documentation or certifications as the Company and/or the Warrant Agent may
reasonably request.
(b) Simultaneously with the exercise of each Warrant, payment in
full of the Exercise Price shall be made:
(i) in cash or by certified or official bank check to
be delivered to the office or agency where the Warrant Certificate is being
surrendered;
(ii) by tendering a principal amount of Notes in
integral multiples of $1,000, including any accrued but unpaid interest thereon
up to, but not including, the Exercise Date, equal to, together with any payment
of cash pursuant to Section 10(b)(i) above, the Exercise Price; or
(iii) solely by the surrender of the applicable Warrant
Certificate, and without the payment of the Exercise Price in cash, for such
number of shares of Common Stock equal to the product of (1) the number of
shares of Common Stock for which such Warrant is exercisable upon payment of the
Exercise Price in cash as of the date of exercise and (2) the Cashless Exercise
Ratio (such exercise, a "Cashless Exercise").
-----------------
For purposes of this Agreement, the "Cashless Exercise Ratio" shall equal a
-----------------------
fraction, the numerator of which is the excess of the Closing Price per share of
the Common Stock on the last Trading Day before the Exercise Date (determined as
set forth in Section 10(c)) over the Exercise Price Per Share (as defined below)
as of the last Trading Day before the Exercise Date and the denominator of which
is the Closing Price per share of the Common Stock on the last Trading Day
before the Exercise Date. Upon surrender of a Warrant Certificate representing
more than one Warrant in connection with the holder's option to elect a Cashless
Exercise, the number of shares of Common Stock deliverable upon a Cashless
Exercise shall be equal to the number of shares of Common Stock for which such
Warrants are exercisable (or if only a portion of such Warrants are being
exercised, such number of shares of Common Stock issuable upon exercise of the
Warrants that the holder specifies are to be exercised pursuant to a Cashless
Exercise) upon payment of the Exercise Price in cash as of the date of exercise
multiplied by the Cashless Exercise Ratio.
In accordance with Section 10(e) hereof and subject to Section 16
hereof, if any holder exercises less than all of the Warrants evidenced by a
Warrant Certificate, a new Warrant Certificate will be issued to such holders
for the remaining number of Warrants. All provisions of this Agreement shall be
applicable with respect to an exercise of a Warrant Certificate pursuant to a
Cashless Exercise for less than the full number of Warrants represented thereby.
"Exercise Price Per Share" means with respect to the Common Stock the Exercise
------------------------
Price divided by the number of shares of Common Stock for which a Warrant is
then exercisable (without giving effect to the Cashless Exercise option). No
payment or adjustment shall be made on account of any dividends on the shares of
Common Stock issued upon exercise of a Warrant.
-15-
(c) Upon such surrender of a Warrant Certificate, payment and
collection of the Exercise Price at any Warrant Exercise Office (other than the
Corporate Office), delivery of the letter and opinion of counsel referenced in
Section 10(a), if required, and delivery of such additional documentation or
certifications as the Company and/or the Warrant Agent may reasonably request,
such Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "Exercise Date" for a Warrant shall be the date when all of the
-------------
applicable items referred to in the first sentence of paragraphs (a) and (b) of
this Section 10 are received by the Warrant Agent, the Company and Xxxxxx &
Xxxxxxx, at or prior to 11:00 a.m., New York City time, on a Business Day and
the exercise of the Warrants will be effective as of such Exercise Date. If any
items referred to in the first sentence of such paragraphs (a) and (b) are
received after 11:00 a.m., New York City time, on a Business Day, the exercise
of the Warrants to which such item relates will be effective on the next
succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on the Expiration Date, if all of the items referred to in
the first sentence of paragraphs (a) and (b) are received by the Warrant Agent,
the Company and Xxxxxx & Xxxxxxx, as applicable, at or prior to 5:00 p.m., New
York City time, on such Expiration Date, the exercise of the Warrants to which
such items relate will be effective on the Expiration Date. For purposes of
determining satisfaction of the requirement set forth above with respect to the
Exercise Date for any Warrant, any facsimile required to be sent shall be deemed
to have been received on a given day if such facsimile was sent before 11:00
a.m., New York City time, on such date (or 5:00 p.m., New York City time, if
such date is the Expiration Date), to the number listed above in Section 10(a)
(unless a different number is specified in a notice filed with the Warrant Agent
and mailed by the Warrant Agent at the Company's expense to each holder of
Warrants at such holder's address appearing on the Warrant register) and
confirmation of the transmission of such facsimile is obtained.
(d) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise Price
(or election of the Cashless Exercise option), the Warrant Agent shall: (i)
except to the extent exercise of the Warrant has been effected through Cashless
Exercise, cause an amount equal to the Exercise Price to be paid to the Company
by crediting the same to the account designated by the Company in writing to the
Warrant Agent for that purpose; (ii) promptly advise the Company by telephone of
the amount so deposited to the Company's account and promptly confirm such
telephonic advice in writing; and (iii) as soon as practicable, advise the
Company in writing of the number of Warrants exercised in accordance with the
terms and conditions of this Agreement and the Warrant Certificates, the
instructions of each exercising holder of the Warrant Certificates with respect
to delivery of the shares of Common Stock to which such holder is entitled upon
such exercise, and such other information as the Company shall reasonably
request.
(e) Subject to Section 6 hereof, the Company shall use its
reasonable best efforts to issue or cause to be issued to or upon the written
order of the registered holder of the Warrant Certificate evidencing such
exercised Warrant or Warrants, the shares of Common Stock to which such holder
is entitled, in fully registered form, registered in such name or names as may
be directed by such holder pursuant to the Exercise Form, as appended to the
Warrant Certificate, within three (3) Business Days of such Exercise Date, and
in any event, shall issue or caused to be issued such shares within ten (10)
Business Days of such Exercise Date. Such shares of Common Stock shall be
-16-
deemed to have been issued and any persons who are designated to be named
therein shall be deemed to have become the holder of record of such shares of
Common Stock as of the close of business on the Exercise Date. After such
exercise of any Warrant or Warrants, the Company shall also issue or cause to be
issued to or upon the written order of the registered holder of such Warrant
Certificate, a new Warrant Certificate, countersigned by the Warrant Agent
pursuant to written instruction, evidencing the number of Warrants, if any,
remaining unexercised unless such Warrants shall have expired.
SECTION 11. Cancellation of Warrant Certificates. The Warrant Agent
------------------------------------
shall cancel all Warrant Certificates properly surrendered for exchange,
substitution, transfer or exercise. The Warrant Agent shall dispose of such
canceled Warrant Certificates in accordance with its customary procedures.
SECTION 12. Adjustment of Exercise Price and Number of Shares Issuable.
----------------------------------------------------------
The Exercise Price, the number of Shares issuable upon the exercise of each
Warrant and the number of Warrants outstanding are subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 12.
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Exercise Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the Record Date
(as defined in Section 12(h)) fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
Record Date. If any dividend or distribution of the type described in this
Section 12(a) is declared but not so paid or made, the Exercise Price shall
again be adjusted to the Exercise Price which would then be in effect if such
dividend or distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Exercise Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Exercise Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(c) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for the determination
of stockholders entitled to receive such rights or warrants) to
-17-
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price (as defined in Section 12(h)) on the Record Date fixed
for the determination of stockholders entitled to receive such rights or
warrants, the Exercise Price shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in effect at the opening of
business on the date after such Record Date by a fraction of which the numerator
shall be the sum of the number of shares of Common Stock outstanding at the
close of business on the Record Date plus the number of shares that the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Current Market Price, and of
which the denominator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the total number of
additional shares of Common Stock so offered for subscription or purchase.
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered pursuant to such rights or warrants,
upon the expiration or termination of such rights or warrants the Exercise Price
shall be readjusted to the Exercise Price that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Exercise Price shall again be adjusted to be the Exercise Price that would then
be in effect if such date fixed for the determination of stockholders entitled
to receive such rights or warrants had not been fixed. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase shares
of Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received for such rights or warrants, the value
of such consideration, if other than cash, to be determined by the Board of
Directors.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
12(a) applies) or evidences of its indebtedness or other assets (including
securities, but excluding (1) any rights or warrants referred to in Section
12(c) and (2) dividends and distributions paid exclusively in cash (except as
set forth in Section 12(e) and (f), (the foregoing hereinafter in this Section
12(d) called the "Securities")), unless the Company elects to reserve such
----------
Securities for distribution to the Warrantholders upon conversion of the
Warrants so that any such holder converting Warrants will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Warrants into Common Stock immediately
prior to the Record Date (as defined in Section 12(h) for such distribution of
the Securities) then, in each such case, the Exercise Price shall be reduced so
that the same shall be equal to the price determined by multiplying the Exercise
Price in effect immediately prior to the close of business on the Record Date
(as defined in Section 12(h)) with respect to such distribution by a fraction of
which the numerator shall be the Current Market Price (determined as provided in
Section 12(h)) on such date less the fair market value (as determined by the
Board of Directors,
-18-
whose determination shall be conclusive and described in a Board Resolution) on
such date of the portion of the Securities so distributed applicable to one
share of Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening of business
on the day following the Record Date; provided, however, that in the event the
then fair market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Warrantholder shall
have the right to receive upon conversion of a Warrant (or any portion thereof)
the amount of Securities such holder would have received had such holder
converted such Warrant (or portion thereof) immediately prior to such Record
Date.
In the event that such dividend or distribution is not so paid or made,
the Exercise Price shall again be adjusted to be the Exercise Price which would
then be in effect if such dividend or distribution had not been declared. If the
Board of Directors determines the fair market value of any distribution for
purposes of this Section 12(d) by reference to the actual or when issued trading
market for any securities comprising all or part of such distribution, it must
in doing so consider the prices in such market over the same period (the
"Reference Period") used in computing the Current Market Price pursuant to
----------------
Section 12(h) to the extent possible, unless the Board of Directors in a Board
Resolution reasonably determines that determining the fair market value during
the Reference Period would not be in the best interest of the Warrantholder.
In the event that the Company implements a new stockholder rights plan,
such rights plan shall provide that upon exercise of the Warrants the holders
will receive, in addition to the Common Stock issuable upon such exercise, the
rights issued under such rights plan (notwithstanding the occurrence of an event
causing such rights to separate from the Common Stock at or prior to the time of
exercise). Any distribution of rights or warrants pursuant to a stockholder
rights plan complying with the requirements set forth in the immediately
preceding sentence of this paragraph shall not constitute a distribution of
rights or warrants for the purposes of this Section 12(d).
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"), (i) are deemed to be transferred with such shares of Common
-------------
Stock, (ii) are not exercisable, and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 12(d) (and no adjustment to the Exercise Price under
this Section 12(d) will be required) until the occurrence of the earliest
Trigger Event. If such right or warrant is subject to subsequent events, upon
the occurrence of which such right or warrant shall become exercisable to
purchase different securities, evidences of indebtedness or other assets or
entitle the holder to purchase a different number or amount of the foregoing or
to purchase any of the foregoing at a different purchase price, then the
occurrence of each such event shall be deemed to be the date of issuance and
record date with respect to a new right or warrant (and a termination or
expiration of the existing right or warrant without exercise by the holder
thereof). In addition, in the event of any distribution (or deemed distribution)
of rights or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with
-19-
respect thereto, that resulted in an adjustment to the Exercise Price under this
Section 12(d), (1) in the case of any such rights or warrants that shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Exercise Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants all of which shall have expired or
been terminated without exercise, the Exercise Price shall be readjusted as if
such rights and warrants had never been issued.
For purposes of this Section 12(d) and Sections 12(a) and (c), any
dividend or distribution to which this Section 12(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 12(c) applies (or both), shall
be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 12(c) applies
(and any Exercise Price reduction required by this Section 12(e) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Exercise Price reduction required by Sections 12(a)
and (c) with respect to such dividend or distribution shall then be made, except
(A) the Record Date of such dividend or distribution shall be substituted as
"the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution", "Record Date fixed for such determination" and
"Record Date" within the meaning of Section 12(a) and as "the date fixed for the
determination of stockholders entitled to receive such rights or warrants", "the
Record Date fixed for the determination of the stockholders entitled to receive
such rights or warrants" and "such Record Date" within the meaning of Section
12(c) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 12(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 13 applies or as
part of a distribution referred to in Section 12(d)), in an aggregate amount
that, combined together with (1) the aggregate amount of any other such
distributions to all holders of its Common Stock made exclusively in cash within
the twelve (12) months preceding the date of payment of such distribution, and
in respect of which no adjustment pursuant to this Section 12(e) has been made,
and (2) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender offer by
the Company or any of its subsidiaries for all or any portion of the Common
Stock concluded within the twelve (12) months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to Section
12(f) has been made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 12(h)) on the Record Date with respect to
such distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after
-20-
the close of business on such date, the Exercise Price shall be reduced so that
the same shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the close of business on such Record Date by a
fraction (i) the numerator of which shall be equal to the Current Market Price
on the Record Date less an amount equal to the quotient of (x) the excess of
such combined amount over such 10% and (y) the number of shares of Common Stock
outstanding on the Record Date and (ii) the denominator of which shall be equal
to the Current Market Price on such date; provided, however, that in the event
the portion of the cash so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Warrantholder shall have the right to receive upon exercise of
a Warrant (or any portion thereof) the amount of cash such holder would have
received had such holder exercised such Warrant (or portion thereof) immediately
prior to such Record Date. In the event that such dividend or distribution is
not so paid or made, the Exercise Price shall again be adjusted to be the
Exercise Price that would then be in effect if such dividend or distribution had
not been declared.
(f) In case a tender offer made by the Company or any Subsidiary
for all or any portion of the Common Stock shall expire and such tender offer
(as amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (1) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offers, by the Company or any of its subsidiaries for all or any portion of the
Common Stock expiring within the twelve (12) months preceding the expiration of
such tender offer and in respect of which no adjustment pursuant to this Section
12(f) has been made and (2) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash within twelve
(12) months preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to Section 12(e) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in Section 12(h)) as
of the last time (the "Expiration Time") tenders could have been made pursuant
---------------
to such tender offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time, then,
and in each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Exercise Price shall be adjusted so
that the same shall equal the price determined by multiplying the Exercise Price
in effect immediately prior to close of business on the date of the Expiration
Time by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time and the denominator shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y) the product
----------------
-21-
of the number of shares of Common Stock outstanding (less any Purchased Shares)
on the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction (if any) to
become effective immediately prior to the opening of business on the day
following the Expiration Time. .In the event that the Company is obligated to
purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Exercise Price shall again be adjusted to be
the Exercise Price that would then be in effect if such tender offer had not
been made. If the application of this Section 12(f) to any tender offer would
result in an increase in the Exercise Price, no adjustment shall be made for
such tender offer under this Section 12(f).
(g) In case of a tender or exchange offer made by a person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding and
shall involve the payment by such person of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors in
good faith, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Expiration Time")
---------------
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, and in which, as
of the Expiration Time the Board of Directors is not recommending rejection of
the offer, the Exercise Price shall be reduced so that the same shall equal the
price determined by multiplying the Exercise Price in effect immediately prior
to the Expiration Time by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) on the Expiration Time multiplied by the current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
----------------
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration Time.
In the event that such person is obligated to purchase shares pursuant
to any such tender or exchange offer, but such person is permanently prevented
by applicable law from effecting any such purchases or all such purchases are
rescinded, the Exercise Price shall again be adjusted to be the Exercise Price
that would then be in effect if such tender or exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this Section 12(g)
shall not be made if, as of the Expiration Time, the offering documents with
respect to such offer disclose a plan or intention to cause the Company to
engage in any transaction described in Section 13.
-22-
(h) For purposes of this Section 12, the following terms shall
have the meaning indicated:
(i) "Closing Price" with respect to any securities on
-------------
any day shall mean the closing sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the Nasdaq National Market or New
York Stock Exchange, as applicable, or, if such security is not listed or
admitted to trading on such National Market or Exchange, on the principal
national security exchange or quotation system on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the average of
the closing bid and asked prices of such security on the over-the-counter market
on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution.
(ii) "Current Market Price" shall mean the average of
--------------------
the daily Closing Prices per share of Common Stock for the ten (10) consecutive
Trading Days immediately prior to the date in question; provided, however, that
(1) if the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Exercise Price pursuant to Section 12(a), (b), (c), (d), (e), (f) or (g)
occurs during such ten (10) consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the Exercise Price
is so required to be adjusted as a result of such other event, (2) if the "ex"
date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Exercise Price pursuant to
Section 12(a), (b), (c), (d), (e), (f) or (g) occurs on or after the "ex" date
for the issuance or distribution requiring such computation and prior to the day
in question, the Closing Price for each Trading Day on and after the "ex" date
for such other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Exercise Price is so required to be
adjusted as a result of such other event, and (3) if the "ex" date for the
issuance or distribution requiring such computation is prior to the day in
question, after taking into account any adjustment required pursuant to clause
(1) or (2) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash and
the fair market value (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of Section 12(d),
(f) or (g), whose determination shall be conclusive and described in a Board
Resolution) of the evidences of indebtedness, shares of capital stock or assets
being distributed applicable to one share of Common Stock as of the close of
business on the day before such "ex" date. For purposes of any computation under
Sections 12(f) or (g), the Current Market Price of the Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per share of
Common Stock for such day and the next two succeeding Trading Days; provided,
however, that if the "ex" date for any event (other than the tender offer
requiring such computation) that requires an adjustment to the Exercise Price
pursuant to Section 12(a), (b), (c), (d), (e), (f) and (g) occurs on or after
the Expiration Time for the tender or exchange offer
-23-
requiring such computation and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the reciprocal of the fraction by
which the Exercise Price is so required to be adjusted as a result of such other
event. For purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the Common
Stock trades regular way on such exchange or in such market after the time at
which such subdivision or combination becomes effective, and (3) when used with
respect to any tender or exchange offer means the first date on which the Common
Stock trades regular way on such exchange or in such market after the Expiration
Time of such offer. Notwithstanding the foregoing, whenever successive
adjustments to the Exercise Price are called for pursuant to this Section 12,
such adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 12 and to avoid unjust
or inequitable results as determined in good faith by the Board of Directors.
(iii) "Fair market value" shall mean the amount which a
-----------------
willing buyer would pay a willing seller in an arm's length transaction.
(iv) "Record Date" shall mean, with respect to any
------------
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(v) "Trading Day" shall mean (x) if the applicable
-----------
security is listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock Exchange
or such other national security exchange, as applicable, is open for business or
(y) if the applicable security is quoted on the Nasdaq National Market, a day on
which trades may be made thereon or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(i) The Company may make such reductions in the Exercise Price,
in addition to those required by Sections 12(a), (b), (c), (d), (e), (f) and
(g), as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Exercise Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during such
period and the Board of Directors shall have made a
-24-
determination that such reduction would be in the best interests of the Company,
which determination shall be conclusive and described in a Board Resolution.
Whenever the Exercise Price is reduced pursuant to the preceding sentence, the
Company shall mail to the holder of each Warrant at his last address appearing
on the Warrant register provided for in Section 8 a notice of the reduction at
least fifteen (15) days prior to the date the reduced Exercise Price is to take
effect, and such notice shall state the reduced Exercise Price and the period
during which it will be in effect.
(j) No adjustment in the Exercise Price shall be required under
this Section 12 unless such adjustment would require an increase or decrease of
at least 1% in the Exercise Price; provided, however, that any adjustments which
-------- -------
by reason of this Section 12(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 12 shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be. No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
(k) Whenever the Exercise Price is adjusted as provided in this
Section 12, the Company shall promptly file with the Warrant Agent an Officer's
Certificate setting forth the Exercise Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. The Warrant
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Exercise Price setting forth the adjusted Exercise Price and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Exercise Price to the holder of each Warrant at his
last address appearing on the Warrant register provided for in Section 8, within
twenty (20) days of the effective date of such adjustment. Failure to deliver
such notice shall not effect the legality or validity of any such adjustment.
(l) In any case in which this Section 12 provides that an
adjustment shall become effective immediately after a Record Date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Warrant exercised after such Record Date and before the occurrence
of such event the additional shares of Common Stock issuable upon such exercise
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 17.
(m) For purposes of this Section 12, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
(n) Upon each adjustment of the Exercise Price pursuant to this
Section 12, each Warrant shall thereupon evidence the right to purchase that
number of shares of Common Stock
-25-
(calculated to the nearest hundredth of a share) obtained by multiplying the
number of shares of Common Stock purchasable immediately prior to such
adjustment upon exercise of the Warrant by the Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained by the
Exercise Price in effect immediately after such adjustment. The adjustment
pursuant to this Section 12(o) to the number of shares of Common Stock
purchasable upon exercise of a Warrant shall be made each time an adjustment of
the Exercise Price is made pursuant to this Section 12 (or would be made but for
Section 12(j) hereof).
SECTION 13. Effect of Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another person as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock,
(iii) any statutory exchange, as a result of which holders of Common Stock
generally shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock
(such transaction, a "Statutory Exchange"), (iv) any sale or conveyance of the
------------------
properties and assets of the Company as, or substantially as, an entirety to any
other person as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing person, as the case may be, shall execute with the
Warrant Agent a supplemental warrant agreement providing that such Warrant shall
be exercisable for the kind and amount of shares of stock and other securities
or property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, Statutory Exchange, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
exercise of such Warrants (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available for issuance upon exercise of all
such Warrants) immediately prior to such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, that holders of Common Stock who were entitled to vote or consent to such
transaction had as to the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, combination, Statutory Exchange,
sale or conveyance (provided that, if the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, combination,
Statutory Exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 13 the kind and
------------------
amount of securities, cash or other property receivable upon such consolidation,
merger, combination, Statutory Exchange, sale or conveyance for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such supplemental warrant
agreement shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in Section 12. If, in the
case of any such reclassification, change, consolidation, merger, combination,
Statutory Exchange, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock include shares of
stock or other securities and assets of a corporation other than the successor
or purchasing person, as
-26-
the case may be, in such reclassification, change, consolidation, merger,
combination, Statutory Exchange, sale or conveyance, then such supplemental
warrant agreement shall also be executed by such other person and shall contain
such additional provisions to protect the interests of the holders of the
Warrants as the Board of Directors shall reasonably consider necessary by reason
of the foregoing. The Exercise Price for the stock and other securities,
property and assets (including cash) so receivable upon such event shall be an
amount equal to the Exercise Price immediately prior to such event.
The Company shall cause notice of the execution of such supplemental
warrant agreement to be mailed to each holder of Warrants, at such holder's
address appearing on the Warrant register provided for in Section 6 of this
Warrant agreement, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental warrant agreement.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 13 applies to any event or occurrence, Section 12 shall
not apply.
SECTION 14. Taxes on Shares Issued. The issue of stock certificates
----------------------
upon exercise of Warrants shall be made without charge to the exercising
Warrantholder for any tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Warrant exercised, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
SECTION 15. Reservation of Shares; Shares to Be Fully Paid; Listing of
----------------------------------------------------------
Common Stock. The Company shall reserve, free from preemptive rights, and keep
------------
available out of its authorized but unissued shares or shares held in treasury,
sufficient shares of Common Stock for issuance upon exercise of the Warrants
from time to time as such Warrants are presented for exercise.
Before taking any action which would cause an adjustment reducing the
Exercise Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Warrants, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Exercise Price.
The Company covenants that all shares of Common Stock issued upon
exercise of Warrants will be duly and validly issued and fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
-27-
The Company further covenants that if at any time the Common Stock
shall be listed on the New York Stock Exchange, Nasdaq National Market or any
other national securities exchange or automated quotation system the Company
will, if permitted by the rules of such exchange or automated quotation system,
list and keep listed, so long as the Common Stock shall be so listed on such
exchange or automated quotation system, all Common Stock issuable upon
conversion of the Warrants.
SECTION 16. Fractional Warrants and Fractional Shares(a)
-----------------------------------------
Notwithstanding anything contained in this Agreement to the contrary, the
Company shall not be required to issue fractions of Warrants or distribute
Warrant Certificates which evidence fractional Warrants.
(b) Notwithstanding anything contained in this Agreement
to the contrary, the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Warrants or to distribute certificates
which evidence such fractional shares. If more than one Warrant shall be
presented for exercise in full at the same time by the same holder, the number
of full shares of Common Stock which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of shares of Common Stock
purchasable on exercise of all Warrants so presented. In lieu any of fractional
shares, there shall be paid to the registered holders of Warrant Certificates at
the time such Warrant Certificates are exercised, as herein provided, an amount
in cash equal to the same fraction of the current market value of a share of
Common Stock. For purposes of this Section 16(b), the current market value of a
share of Common Stock shall be the Closing Price of a share of Common Stock for
the Trading Day immediately prior to the date of such exercise.
SECTION 17. Notice to Warrantholders Prior to Certain Actions. In case:
----------------------------------------------------------
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Exercise Price pursuant to Section 12; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any share of
any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Warrant Agent and mailed by the
Warrant
-28-
register as promptly as possible but in any event at least fifteen days prior to
the applicable date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution or
rights or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
or rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up.
SECTION 18. Merger, Consolidation or Change of Name of Warrant Agent.
--------------------------------------------------------
Any corporation into which the Warrant Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Warrant Agent, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 21. In
case at the time such successor to the Warrant Agent shall succeed to the agency
created by this Agreement, and in case at that time any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent; and in case at that time any of the Warrant Certificates shall not have
been countersigned, any successor to the Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor warrant agent or in
the name of the successor warrant agent; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and
in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.
SECTION 19. Warrant Agent. The Warrant Agent undertakes the duties and
-------------
obligations expressly imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Warrant Agent, by all of which the Company and the holders
of Warrants, by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The
-29-
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this Agreement or
in the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel of its
own selection (who may be counsel for the Company) and the Warrant Agent shall
incur no liability or responsibility to the Company or to any holder of any
Warrant Certificate in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of such
counsel.
(d) The Warrant Agent may conclusively rely upon and shall incur
no liability or responsibility to the Company or to any holder of any Warrant
Certificate for any action taken in reliance on any notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument (whether in
its original or facsimile form) believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent such
compensation as shall be agreed between the Company and the Warrant Agent for
all services rendered by the Warrant Agent in the execution of this Agreement,
to reimburse the Warrant Agent for all expenses, taxes and governmental charges
and other charges of any kind and nature incurred by the Warrant Agent in
connection with the execution and administration of its duties under this
Agreement and to fully indemnify the Warrant Agent and save it harmless against
any and all liabilities, claims, damages, losses and expenses including
judgments, costs and reasonable counsel fees and expenses, for anything done or
omitted by the Warrant Agent in the execution and administration of its duties
under this Agreement except as determined by a court of competent jurisdiction
to have been caused by its gross negligence or willful misconduct. The
provisions of this Section 19(e) shall survive the termination of this
Agreement.
(f) The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of Warrant
Certificates shall furnish the Warrant Agent with security and indemnity
satisfactory to it for any costs and expenses which may be incurred. All rights
of action under this Agreement or under any of the Warrants may be enforced by
the Warrant Agent without the possession of any of the Warrant Certificates or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be for
the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or
employee thereof, may buy, sell or deal in any of the Warrants or other
securities of the Company or become
-30-
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof and
no duties shall be inferred or implied against the Warrant Agent. The Warrant
Agent shall not be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own gross negligence or willful
misconduct.
(i) No provision of this Agreement shall require the Warrant Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of is rights
if there shall be reasonable grounds for believing repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
SECTION 20. Disposition of Proceeds of Exercise of Warrants. The
-----------------------------------------------
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all moneys or Notes received by
the Warrant Agent on the purchase of shares of Common Stock upon the exercise of
Warrants.
SECTION 21. Change of Warrant Agent. If the Warrant Agent shall become
-----------------------
incapable of acting as Warrant Agent, the Company shall appoint a successor. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such incapacity by the incapacitated Warrant
Agent or by the registered holder of a Warrant Certificate, then the Warranty
Agent or registered holder of any Warrant Certificate may apply, at the
reasonable expense of the Company, to any court of competent jurisdiction for
the appointment of a successor to the incapacitated Warrant Agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. Any successor warrant agent whether appointed by the Company or by such
a court, shall be a bank or trust company, in good standing, incorporated under
the laws of the State of New York or of the United States of America, and having
its principal office in the Borough of Manhattan in New York, New York, and must
have at the time of its appointment as Warrant Agent a combined capital and
surplus of at least one hundred million dollars. After appointment the successor
warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall, upon payment of all
amounts owed to it hereunder, deliver and transfer to the successor warrant
agent any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the removal of the Warrant Agent or
the appointment of a successor warrant agent as the case may be.
SECTION 22. Notices to Company and Warrant Agent. Any notice or demand
------------------------------------
authorized by this Agreement to be given or made by the Warrant Agent or by the
registered holder
-31-
of any Warrant Certificate to or on the Company shall be sufficiently given or
made if sent by mail, first class or registered, postage prepaid, addressed
(until another address is filed in writing by the Company with the Warrant
Agent), as follows:
TiVo Inc.
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal corporate trust office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder of any Warrant Certificate to the Warrant Agent shall be
sufficiently given if sent by first-class mail, postage pre-paid, addressed
(until another address is filed in writing by the Warrant Agent with the
Company) to the Warrant Agent as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
SECTION 23. Supplements and Amendments. The Company and the Warrant
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant Certificates in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Warrant Certificates; provided,
--------
however, that the written consent of the holders of Warrant Certificates
-------
representing a majority of the Warrants then outstanding (but not including any
Warrants then held by the Company or its Affiliates) is required to amend or
supplement the Warrant Agreement in any manner that would have a material
adverse effect on the interests of the Warrantholders and provided further, that
-------- -------
the consent of each holder of the Warrants affected is required for any
amendment which would increase the Exercise Price or decrease the number of
shares of Common Stock purchasable upon exercise of the Warrants, except, in any
case, pursuant to the adjustments provided for in Section 12.
Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section, the Warrant Agent shall execute such supplement
or amendment. Notwithstanding any other provision hereof, the Warrant Agent's
consent must be obtained regarding any amendment or supplement pursuant to this
Section 23 which alters the Warrant Agent's rights or duties.
-32-
It shall not be necessary for the consent of the Warrantholders under
this Section 23 to approve the particular form of any proposed supplemental
warrant agreement, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 24. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 25. Termination. This Agreement shall terminate at the close of
-----------
business on August 28, 2006. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 19 shall survive such termination.
SECTION 26. Governing Law. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
-------------
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
SECTION 27. Benefits of This Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 28. Counterparts. This Agreement may be executed in any number
------------
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
-33-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
TIVO INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------
Title: President and Chief Executive
Officer
-----------------------------
Attest:
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: Senior Vice President, Finance and
Administration and Chief Financial
Officer
-----------------------------------
THE BANK OF NEW YORK, as Warrant Agent
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
------------------------------
Title: Assistant Treasurer
------------------------------
[SIGNATURE PAGE TO WARRANT AGREEMENT]
EXHIBIT A
---------
FORM OF WARRANT
---------------
TIVO INC.
No. ___________________ CUSIP No. ________________
[THE FOLLOWING PARAGRAPHS SHALL APPEAR ON THE FACE OF EACH RESTRICTED WARRANT.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR
--------------
THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (1) TO THE ISSUER, (2) SO LONG AS THIS SECURITY
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
----
144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
----
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER APPEARING ON THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPEARING ON THIS
SECURITY), (4) TO A PERSON THAT IS AN ACCREDITED INVESTOR AS DEFINED IN RULE
501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER APPEARING ON THIS SECURITY) AND THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS AN EXHIBIT TO THE
WARRANT AGREEMENT GOVERNING THIS SECURITY AND MAY BE OBTAINED FROM THE WARRANT
AGENT) IS DELIVERED PRIOR TO SUCH TRANSFER BY THE TRANSFEREE TO THE ISSUER AND
THE WARRANT AGENT, (5) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (7) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS. THE HOLDER
HEREOF AGREES,
THAT PRIOR TO SUCH TRANSFER, IT WILL FURNISH TO THE ISSUER AND THE WARRANT AGENT
AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS (OTHER THAN WITH RESPECT TO A
TRANSFER PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT) AND SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS AND IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF SUCH LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN ACCREDITED
INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION OR (3) NON-U.S. PERSON OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF RULE
902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
[THE COMPANY MAY, BUT IS NOT OBLIGATED TO INSTRUCT THE WARRANT AGENT TO PLACE
THE FOLLOWING LEGEND ON ANY WARRANT HELD BY OR TRANSFERRED TO AN "AFFILIATE" (AS
DEFINED IN RULE 501(B) OF REGULATION D UNDER THE SECURITIES ACT):]
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY BE
DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY BE SOLD
ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT.
A-2
WARRANT
REPRESENTING _________ WARRANTS TO PURCHASE COMMON STOCK
This certifies that _________, or its registered assigns, is the
registered owner of __________ Warrants, each expiring August 28, 2006, and each
of which entitles the registered owner thereof (the "Warrantholder") to purchase
-------------
at any time prior to the expiration hereof from TIVO INC., a Delaware
corporation (the "Company"), one share of Common Stock (the "Common Stock"),
------- ------------
$0.001 par value per share, of the Company at the purchase price of $7.85 per
share of Common Stock (the "Exercise Price"), subject to adjustment as provided
--------------
in the Warrant Agreement hereinafter referred to.
The Warrants evidenced by this Warrant are issued under and in
accordance with the Warrant Agreement, dated as of August 28, 2001 (the "Warrant
-------
Agreement"), between the Company and The Bank of New York, as warrant agent (the
---------
"Warrant Agent"), and the Registration Rights Agreement, dated of even date
-------------
therewith (the "Registration Rights Agreement"), among the Company and the
-----------------------------
initial purchasers of the Warrants, and are subject to the terms and provisions
contained therein, to all of which terms and provisions the holder of this
Warrant consents by acceptance of this Warrant and which Warrant Agreement and
Registration Rights Agreement are hereby incorporated by reference in and made a
part of this Warrant.
Reference is hereby made to the Warrant Agreement and the Registration
Rights Agreement for a full description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Company and the
Warrantholders. The summary of the terms of the Warrant Agreement and the
Registration Rights Agreement contained in this Warrant is qualified in its
entirety by express reference to such agreements. All capitalized terms used but
not defined in this Warrant shall have the meanings assigned to them in the
Warrant Agreement.
As provided in the Warrant Agreement, and subject to the terms and
conditions set forth therein, the Warrants shall be exercisable at any time
during the period commencing on the day after the date of the Warrant Agreement
and ending at 5:00 p.m., New York time, on August 28, 2006 (the "Expiration
----------
Date"). This Warrant may be exercised on any Business Day on or prior to close
----
of business on the Expiration Date.
Any Warrant not exercised before the close of business on the
Expiration Date, or the Termination Date, as the case may be, shall become void,
and all rights of the holder under the Warrant Certificate evidencing such
Warrant and under this Agreement shall cease.
The Exercise Price and the number of shares of Common Stock purchasable
upon exercise of each Warrant are subject to adjustment as provided in the
Warrant Agreement. If any of the following events occur, namely (i) any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination), (ii) any
consolidation, merger or
A-3
combination of the Company with another person as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock,
(iii) any statutory exchange, as a result of which holders of Common Stock
generally shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock
(such transaction, a "Statutory Exchange"), (iv) any sale or conveyance of the
properties and assets of the Company as, or substantially as, an entirety to any
other person as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing person, as the case may be, shall execute with the
Warrant Agent a supplemental warrant agreement providing that such Warrant shall
be exercisable for the kind and amount of shares of stock and other securities
or property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, Statutory Exchange, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
exercise of such Warrants (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available for issuance upon exercise of all
such Warrants) immediately prior to such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, that holders of Common Stock who were entitled to vote or consent to such
transaction had as to the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, combination, Statutory Exchange,
sale or conveyance (provided that, if the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, combination,
Statutory Exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of Section 13 of the Warrant
------------------
Agreement the kind and amount of securities, cash or other property receivable
upon such consolidation, merger, combination, Statutory Exchange, sale or
conveyance for each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares). Such
supplemental warrant agreement shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
Section 12 of the Warrant Agreement. If, in the case of any such
reclassification, change, consolidation, merger, combination, Statutory
Exchange, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock include shares of
stock or other securities and assets of a corporation other than the successor
or purchasing person, as the case may be, in such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance, then
such supplemental warrant agreement shall also be executed by such other person
and shall contain such additional provisions to protect the interests of the
holders of the Warrants as the Board of Directors shall reasonably consider
necessary by reason of the foregoing. The Exercise Price for the stock and other
securities, property and assets (including cash) so receivable upon such event
shall be an amount equal to the Exercise Price immediately prior to such event.
The Company shall not be required to issue fractions of shares of
Common Sock upon exercise of the Warrants or to distribute certificates which
evidence such fractional shares. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full shares
of Common Stock which shall be issuable upon the exercise thereof shall be
A-4
computed on the basis of the aggregate number of shares of Common Stock
purchasable on exercise of all Warrants so presented. In lieu any of fractional
shares, there shall be paid to the registered holders of Warrant Certificates at
the time such Warrant Certificates are exercised an amount in cash equal to the
same fraction of the current market value of a share of Common Stock. For
purposes of this calculation, the current market value of a share of Common
Stock shall be the Closing Price of a share of Common Stock for the Trading Day
immediately prior to the date of such exercise.
The Company covenants that it will at all times through 5:00 p.m., New
York time, on the Expiration Date (or, if the Expiration Date shall not be a
Business Day, then on the next-succeeding Business Day) reserve, free from
preemptive rights, and keep available out of its authorized but unissued shares
or shares held in treasury or a combination thereof of Common Stock, solely for
the purpose of issue upon exercise of Warrants as herein provided, sufficient
shares of Common Stock, for issuance upon exercise of, the Warrants from time to
time as such Warrants are presented for exercise. The Company covenants that all
shares of Common Stock issued upon exercise of Warrants shall be duly and
validly issued and fully paid and non-assessable and free from all taxes, liens
and charges with respect to the issue thereof.
The initial issuance of certificates of Common Stock upon the exercise
of Warrants shall be made without charge to the exercising Warrantholders for
any tax in respect of the issuance of such stock certificates, and such stock
certificates shall be issued in the respective names of, or in such names as may
be directed by, the registered holders of the Warrants exercised, subject to the
restrictions on transfer set forth herein and in the Warrant Agreement;
provided, however, that the Company shall not be required to pay any tax that
-------- -------
may be payable in respect of any transfer involved in the issuance and delivery
of any such stock certificate, any Warrant Certificates or other securities in a
name other than that of the registered holder of the Warrant Certificate
surrendered upon exercise of the Warrant, and the Company shall not be required
to issue or deliver such certificates or other securities unless and until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
Subject to the terms and provisions of the Registration Rights
Agreement, the Company shall file under the Securities Act a registration
statement providing for the registration of all of the Warrants and the shares
of Common Stock issuable upon exercise thereof.
As provided in the Warrant Agreement and the Registration Rights
Agreement, the Warrantholders have additional rights and duties with respect to
the registration of the Warrants and the Common Stock issuable upon exercise of
the Warrants. A Warrantholder may be required to indemnify and hold the Company
and certain other persons harmless in connection with written information
furnished to the Company by or on behalf of such Warrantholder specifically for
use in any registration statement, or any preliminary or final or summary
Prospectus contained therein or any amendment or supplement thereto.
By its acceptance of any Warrant represented by a Warrant Certificate
bearing a restrictive legend, each holder and beneficial owner of such a Warrant
acknowledges the restrictions on transfer
A-5
of such a Warrant set forth in such legend and agrees that it will transfer such
a Warrant only in accordance with such legend.
Subject to the restrictions on transfer set forth herein and in the
Warrant Agreement, this Warrant and all rights hereunder are transferable by the
registered Warrantholder hereof, in whole or in part, on the Warrant register,
upon surrender of this Warrant Certificate duly endorsed, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Warrant Agent duly executed, with signatures guaranteed as specified in the
attached "Form of Assignment," by the registered Warrantholder hereof or his
attorney duly authorized in writing and upon payment of any necessary transfer
tax or other governmental charge imposed upon such transfer. Upon any partial
transfer, the Company will issue and the Warrant Agent will countersign and
deliver to such Warrantholder a new Warrant Certificate or Warrant Certificates
with respect to any portion not so transferred. Each taker and holder of this
Warrant, by taking and holding the same, consents and agrees that prior to the
registration of transfer as provided in the Warrant Agreement, the Company and
the Warrant Agent may treat the person in whose name the Warrants are registered
as the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, any notice to the contrary
notwithstanding.
This Warrant Certificate may be exchanged at the office of the Warrant
Agent for Warrant Certificates representing the same aggregate number of
Warrants, each new Warrant Certificate to represent such number of Warrants as
the holder hereof shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the holder of
this Warrant shall not be entitled, as such, to any rights of a stockholder of
the Company, including, without limitation, the right to vote or to consent to
any action of the stockholders of the Company, to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of
meetings of stockholders of the Company, and shall not be entitled to receive
any notice of any proceedings of the Company except as provided in the Warrant
Agreement.
Copies of the Warrant Agreement are on file at the office of the
Warrant Agent and may be obtained by writing to the Warrant Agent at the
following address:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
THE WARRANT AGREEMENT AND THIS WARRANT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
A-6
This Warrant shall not be valid for any purpose until it shall have
been countersigned by the Warrant Agent.
TIVO INC.
By: __________________________________
Name:
Title:
Attest:
By: _________________________________
Name:
Title:
Countersigned:
THE BANK OF NEW YORK
as Warrant Agent
By:__________________________________
Authorized Signatory
Dated:
A-7
EXERCISE FORM
-------------
(To be executed only upon exercise of Warrant)
The undersigned registered holder of a Warrant Certificate representing
__________ Warrants irrevocably elects to exercise __________ of the Warrants
represented by the Warrant Certificate for the purchase of one share (subject to
adjustment as set forth in the Warrant Agreement) of Common Stock, $0.001 par
value, of TiVo Inc., for each Warrant so exercised, and herewith
[_] makes payment of $__________ (such payment being in cash or by
certified or official bank check payable to the order or at the direction of
TiVo Inc.),
[_] tenders $_______ principal amount of the Company's 7% Convertible
Senior Notes due 2006, plus payment of $__________ (such payment being in cash
or by certified or official bank check payable to the order or at the direction
of TiVo Inc.),
[_] elects to make a "Cashless Exercise" of such Warrants as provided
in Section 10(b) of the Warrant Agreement,
all at the exercise price and on the terms and conditions specified in the
Warrant and the Warrant Agreement therein referred to, and surrenders all of its
right, title and interest in the number of Warrants exercised herein to TiVo
Inc., and directs that the shares of Common Stock or other securities or
property deliverable upon the exercise of such Warrants, and any Warrant
Certificate or interests in the Warrant representing unexercised Warrants, be
registered or placed in the name and at the address specified below and
delivered thereto.
Dated:
_______________________________________
(Signature of Warrantholder)
_______________________________________
(Xxxxxx Xxxxxxx)
_______________________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
_______________________________________
This form must be delivered to the Warrant Agent at the Corporate Office, which
initially shall be 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, X.X. 10286,
Attention: Corporate Trust Administration. Copies of this form must be sent by
facsimile to TiVo Inc., attention General Counsel ((000) 000-0000) and Xxxxxx &
Xxxxxxx, attention Xxxx Xxxxxxx ((000) 000-0000).
A-8
1. COMMON STOCK AND/OR CHECK TO BE ISSUED TO:
IF IN CERTIFICATED FORM:
Social Security Number or identifying number:___________________________
Name:___________________________________________________________________
Street Address:_________________________________________________________
City, State and Zip Code:_______________________________________________
IF IN BOOK-ENTRY FORM THROUGH DTC:
ACCOUNT NUMBER:_________________________________________________________
ACCOUNT NAME:___________________________________________________________
ANY UNEXERCISED WARRANTS REPRESENTED BY THE EXERCISING HOLDER'S INTEREST IN THE
WARRANT TO BE ISSUED IN CERTIFICATED FORM TO:
Social Security Number or identifying number:___________________________
Name:___________________________________________________________________
Street Address:_________________________________________________________
City, State and Zip Code:_______________________________________________
A-9
FORM OF ASSIGNMENT AND TRANSFER
-------------------------------
FOR VALUE RECEIVED the undersigned registered holder of the within Warrant
Certificate hereby sells, assigns and transfers unto the Assignee(s) named below
(including the undersigned with respect to any Warrants constituting a part of
the Warrants evidenced by the within Warrant Certificate not being assigned
hereby) all of the right of the undersigned under the within Warrant
Certificate, with respect to the number of Warrants set forth below:
Social Security
Number Number or Other
Name of Assignees Address of Warrants Identifying Number
------------------------- --------- ------------- --------------------
and does hereby irrevocably constitute and appoint ________________________, the
undersigned's attorney, to make such transfer on the books of TiVo Inc.
maintained for the purpose, with full power of substitution in the premises.
In connection with any transfer occurring within two years (or such longer
or shorter holding period required under Rule 144(k) of the Securities Act) of
the original issuance of such Warrant (unless such Warrant is being transferred
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Warrant is being
transferred:
[_] *To TiVo Inc. or a subsidiary thereof; or
[_] *Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
[_] *To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
[_] *To an Individual Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
[_] *In an offshore transaction pursuant to and in compliance
with Regulation S under the Securities Act of 1933, as
amended; or
[_] *Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Warrant
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[_] *The transferee is an Affiliate of the Company.
Dated:
_______________________________________
(Signature of Warrantholder)
_______________________________________
(Xxxxxx Xxxxxxx)
_______________________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
_______________________________________
A-11
EXHIBIT B
---------
FORM OF TRANSFER LETTER OF REPRESENTATIONS
(TO BE DELIVERED UPON EXERCISE OF WARRANTS
OR UPON CERTAIN TRANSFERS OF WARRANTS
WITHOUT EFFECTIVE REGISTRATION STATEMENT)
We are delivering this letter in connection with (i) the exercise of
Warrants (as defined in the Warrant Agreement, dated as of August 28, 2001,
between TiVo Inc., a Delaware corporation (the "Company") and The Bank of New
York, a New York banking corporation (the "Warrant Agent")) by us for shares of
common stock, par value $.001 per share, of the Company (the "Common Stock") or
(ii) the sale or transfer to us of Warrants, other than pursuant to a
registration statement that has been declared effective under the Securities Act
of 1933, as amended (the "Securities Act"). The Warrants and the Common Stock
are sometimes referred to herein as the "Securities."
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1),(2), (3), (5), (6) or (7) under the Securities Act;
(ii) any purchase or receipt of the Securities by us will be
for investment purposes and for our own account, not as a nominee or
agent;
(iii) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing or receiving the Securities;
(iii) we do not have need for liquidity in our investment in
the Securities, we have the ability to bear the economic risks of our
investment in the Securities for an indefinite period of time and we
are able to afford the complete loss of our investment in the
Securities;
(iv) we are not acquiring the Securities with a view to any
distribution thereof in a transaction that would violate the Securities
Act or the securities laws of any State of the United States or any
other applicable jurisdiction, and we have no present intention of
selling, granting any participation in, or otherwise distributing the
same;
(v) we have had access to such information regarding the
Company necessary in order for us to make an informed decision and any
such information which we have requested have been made available for
us or our attorney, accountant, or advisor; and
B-1
(vi) we or our attorney, accountant, or advisor have had a
reasonable opportunity to ask questions of and receive answers from a
person or persons acting on behalf of the Company concerning the
business, management and financial affairs of the Company and the terms
and conditions of the acquisition by us of the Securities and all such
questions have been answered to our full satisfaction, and we have
acquired sufficient information about the Company to make an informed
and knowledgeable decision to acquire the Securities.
We understand that the Securities have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Securities, that such Securities may be offered,
resold, pledged or otherwise transferred only (i) in a transaction meeting the
requirements of Rule 144 under the Securities Act, outside the United States in
a transaction meeting the requirements of Rule 904 under the Securities Act, or
in accordance with another exemption from the registration requirements of the
Securities Act, (ii) to the Company or (iii) pursuant to an effective
registration statement, and, in each case, in accordance with any applicable
securities laws of any State of the United States or any other applicable
jurisdiction. We agree that we will furnish the Company, the Warrant Agent and,
if exercising Warrants, the Company's transfer agent an opinion of counsel, if
the Company so requests, that the foregoing restrictions on transfer have been
complied with. We understand that the Warrant Agent will not be required to
accept for registration of transfer or exercise any Warrants, except upon
presentation of evidence satisfactory to the Company, including an opinion of
counsel if the Company so requests, that the foregoing restrictions on transfer
or exercise have been complied with.
We acknowledge that the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
______________________________
(Name)
By:____________________________
Name:
Title:
Address:
B-2
