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WARRANT AGREEMENT
Dated as of September 19, 2000
between
PATHMARK STORES, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, LLC
as Warrant Agent
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WARRANT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. Defined Terms......................................................................1
1.1 Rules of Construction.......................................................4
SECTION 2. Issuance, Form, Execution, Delivery and Registration of Warrant Certificates.......5
2.1 Issuance of Warrants........................................................5
2.2 Execution of Warrant Certificates...........................................5
2.3 Countersignature and Delivery...............................................5
2.4 Form of Warrant Certificates................................................6
2.5 Temporary Warrant Certificates..............................................6
2.6 Registration, Registration of Transfers and Exchanges.......................7
2.7 Book-Entry Provisions for Global Warrants...................................8
2.8 Special Transfer Provisions.................................................9
2.9 Offices for Exercise, Etc..................................................10
2.10 Cancellation...............................................................10
2.11 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates.........11
SECTION 3. Terms of Warrants; Exercise of Warrants...........................................12
3.1 Exercise Period............................................................12
3.2 Manner of Exercise.........................................................12
3.3 Issuance of Warrant Shares.................................................13
3.4 Fractional Warrant Shares..................................................13
3.5 Sufficient Authorized Share Capital........................................13
3.6 Payment of Taxes...........................................................14
SECTION 4. Adjustment of Exercise Price and Number of Warrant Shares Issuable................14
4.1 Adjustments................................................................14
4.2 Tender Offers: Exchange Offers.............................................17
4.3 Other Events...............................................................17
4.4 When No Adjustment Required................................................17
4.5 Superseding Adjustment.....................................................18
4.6 Minimum Adjustment.........................................................19
4.7 Notice of Adjustment.......................................................19
4.8 Notice of Certain Transactions.............................................19
4.9 Adjustment to Warrant Certificate..........................................20
4.10 Challenge to Good Faith Determination......................................20
4.11 Treasury Stock.............................................................20
SECTION 5. Warrant Agent.....................................................................20
5.1 Appointment of Warrant Agent...............................................20
5.2 Rights and Duties of Warrant Agent.........................................20
5.3 Individual Rights of Warrant Agent.........................................22
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5.4 Warrant Agent's Disclaimer.................................................22
5.5 Compensation and Indemnity.................................................22
5.6 Successor Warrant Agent....................................................24
SECTION 6. Miscellaneous.....................................................................25
6.1 Reports....................................................................25
6.2 Notices to the Company and Warrant Agent...................................25
6.3 Supplements and Amendments.................................................26
6.4 Severability...............................................................27
6.5 Successors.................................................................27
6.6 Termination................................................................27
6.7 Governing Law..............................................................27
6.8 Submission to Jurisdiction; Appointment of Agent for Service; Waiver.......27
6.9 Benefits of this Agreement.................................................28
6.10 Counterparts...............................................................28
6.11 Table of Contents..........................................................28
Exhibits
EXHIBIT A - Form of Face of Global Warrant Certificate
EXHIBIT B - Form of Face of Definitive Warrant Certificate
ii
WARRANT AGREEMENT dated as of September 19, 2000 (the "Agreement")
between Pathmark Stores, Inc., a company organized under the laws of Delaware
(the "Company"), and Xxxxx Xxxxxx Shareholder Services, L.L.C., a New Jersey
limited liability Company as warrant agent (in such capacity, the "Warrant
Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, under the Disclosure Statement dated June 7, 2000, the
Company agreed to enter into this Agreement with the Warrant Agent to issue the
Warrants (as defined below) which will entitle the holders thereof to purchase
5,294,118 shares of Common Stock (as defined below) at an Exercise Price (as
defined below) of $22.31 based on a reorganization value of the Company of $1.3
billion; and
WHEREAS, the Company desires the Warrant Agent to assist the
Company in connection with the issuance, exchange, cancellation, replacement and
exercise of the Warrants, and in this Agreement wishes to set forth, among other
things, the terms and conditions on which the Warrants may be issued, exchanged,
cancelled, replaced and exercised; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates (as defined below) and other matters as
provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company, the Warrant Agent and the Holders (as
defined below), the parties hereto agree as follows:
SECTION 1. Defined Terms.
1.1 Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as
applied to any Person, is defined to mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble of
this Agreement.
"Amended Certificate of Incorporation" shall mean the amended and
restated Certificate of Incorporation of the Company, as amended under
the Plan of Reorganization.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code (the
"Bankruptcy Code") or any similar United States Federal, state or
foreign law for the relief of creditors.
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"Board" means the Board of Directors of the Company.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Cashless Exercise" has the meaning specified in Section 3.2
hereof.
"Cashless Exercise Ratio" means a fraction, the numerator of which
is the excess of the Current Market Value (as defined below) per share
of Common Stock on the Exercise Date over the Exercise Price per share
as of the Exercise Date and the denominator of which is the Current
Market Value per share of Common Stock on the Exercise Date.
"Combination" has the meaning specified in Section 4.1(e) hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" shall mean the new common stock of the Company, par
value $0.01 per share as issued under the Amended Certificate of
Incorporation.
"Current Market Value," per share of Common Stock or any other
security at any date, means (i) if the security is not registered under
the Exchange Act, the fair market value of the security (without any
discount for lack of liquidity, the amount of such security offered to
be purchased or the fact that such securities may represent a minority
interest in a private company or a company under the control of another
Person) as determined in good faith by the Board and certified in a
board resolution that is delivered to the Warrant Agent, and determined
to be fair, from a financial point of view, to the holders of such
security or another security exercisable for such security, by an
Independent Financial Expert (as set forth in such Independent
Financial Expert's written fairness opinion); or (ii) if the security
is registered under the Exchange Act, the average of the last reported
sale price of the security (or the equivalent in an over-the-counter
market) for each Business Day (as defined herein) during the period
commencing 15 Business Days before such date and ending on the date one
day prior to such date, or if the security has been registered under
the Exchange Act for less than 15 consecutive Business Days before such
date, the average of the daily closing bid prices (or such equivalent)
for all of the Business Days before such date for which daily closing
bid prices are available (provided, however, that if the closing bid
price is not determinable for at least 10 Business Days in such period,
the "Current Market Value" of the security shall be determined as if
the security were not registered under the Exchange Act). The Company
shall pay the fees and expenses of any Independent Financial Expert in
the determination of Current Market Value.
"Definitive Warrants" means Warrants in definitive registered form
substantially in the form of Exhibit B.
"DTC" means The Depository Trust Company or its successors.
"DWAC" means the Depositary/Deposit Withdraw at Custodian system.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any successor act), and the rules and regulations
promulgated thereunder.
"Exercise Date" means the date on which a Warrant is exercised by
the Holder thereof.
"Exercisability Date" means the first day after the Issue Date.
"Exercise Price" means the purchase price per Warrant Share to be
paid upon the exercise of each Warrant, which price shall be $22.31 per
Warrant Share as adjusted in accordance with the terms hereof.
"Expiration Date" means September 19, 2010.
"Holder" means the registered holder of a Warrant.
"Independent Financial Expert" means an internationally recognized
investment bank that does not (and whose directors, executive officers
and 5% or greater stockholders do not) have a direct or indirect
financial interest in the Company or any of its subsidiaries or
Affiliates, which has not been for at least five years, and at the time
it is called upon to give independent financial advice to the Company
is not (and none of its directors, executive officers nor 5% or greater
stockholders is), a promoter, director, or officer of the Company or
any of its subsidiaries or Affiliates. The Independent Financial Expert
may be compensated and indemnified by the company for opinions or
services it provides as an Independent Financial Expert.
"Issue Date" means September 19, 2000, the date on which the
Warrants are first issued.
"Majority Holders" means the Holders of a majority of the then
outstanding Warrants.
"Nasdaq National Market" means the Nasdaq Stock Market.
"Officer" means the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of
the Company.
"Officers' Certificate" means a certificate signed on behalf of
the Company by two officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Company.
"Person" means any individual, firm corporation, partnership,
joint venture, limited liability company, association, joint-stock
company, trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity, and shall include
any successor (by merger or otherwise) of such entity.
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"Plan of Reorganization" means the joint plan of reorganization of
the Company and certain of its Affiliates under chapter 11 of the
Bankruptcy Code.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Repurchase Price" means, in respect of a Warrant, (i) the excess
of the Current Market Value of a share of Common Stock of the Company
over the Exercise Price per share of Common Stock, multiplied by (ii)
the number of Warrant Shares that would be obtained if one Warrant was
exercised on the date of repurchase.
"Right" has the meaning specified in Section 4.4 hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"shares of Common Stock" has the meaning specified in the Preamble
hereto.
"Successor Company" has the meaning specified in Section 4.1(e)
hereof.
"Warrant Agent" means Xxxxx Xxxxxx Shareholder Services, L.L.C.,
or the successor or successors of such Warrant Agent appointed in
accordance with the terms hereof.
"Warrant Certificates" means the certificates evidencing the
Warrants to be delivered pursuant to this Agreement, substantially in
the form of Exhibits A and B hereto.
"Warrant Registrar" has the meaning specified in Section 2.6
hereof.
"Warrant Shares" has the meaning specified in Section 2.1(c)
hereof.
"Warrants" shall mean the new warrants issued hereunder and all
warrants issued upon transfer, division or combination of, or in
substitution for, any thereof. All Warrants shall at all times be
identical as to terms and conditions and date, except as to the number
of shares of Common Stock for which they may be exercised.
1.2 Rules of Construction. Unless the text otherwise required:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with United States generally accepted
accounting principles ("U.S. GAAP") as in effect from time to time.
(iii) "or" is not exclusive;
(iv) "including" means including, without limitation; and
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(v) words in the singular include the plural and words in the
plural include the singular.
SECTION 2. Issuance, Form, Execution, Delivery and Registration of
Warrant Certificates.
2.1 Issuance of Warrants. (a) On the Issue Date and in accordance
with the Plan of Reorganization, the Company shall issue Warrants to the holders
of the 11.625% Subordinated Notes due 2002 of the Company (the "Subordinated
Notes"), the 12.625% Subordinated Debentures due 2002 of the Company (the
"Subordinated Debentures") and the 10.75% Junior Subordinated Referred Coupon
Notes due 2003 of the Company (the "Junior Subordinated Notes") entitling
holders of such existing bonds of the Company to purchase an aggregate of
5,294,118 shares, as adjusted in accordance with Section 4 of this Agreement.
(b) Each one dollar worth of the Subordinated Notes and the
Subordinated Debentures will entitle its holder to receive 0.01265 Warrants and
each dollar worth of Junior Subordinated Notes will entitle its holder to
receive 0.005487 Warrants. Any Holder of a fraction of a Warrant will be
entitled to receive an additional Warrant if such fraction is higher than 0.5.
Each Warrant issued under this Agreement shall be evidenced by a Warrant
Certificate.
(c) Each Warrant Certificate shall evidence the number of Warrants
specified therein, and each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase from the
Company (and the Company shall issue and sell to such holder of the Warrant) one
share of Common Stock of the Company (the shares purchasable upon exercise of a
Warrant being hereinafter referred to as the "Warrant Shares," subject to
adjustment as provided in Section 4 hereof).
2.2 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by two Officers of the Company. Such
signatures may be the manual or facsimile signatures of the present or any
future such officers. Typographical and other minor errors or defects in any
such reproduction of any such signature shall not affect the validity or
enforceability of any Warrant Certificate that has been duly countersigned and
delivered by the Warrant Agent.
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
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the Person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such Persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such Person was not such an officer.
2.3 Countersignature and Delivery. Subject to the immediately
following paragraph, 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
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countersigned and dated. The Warrant Certificates shall be numbered and shall be
registered in the Warrant Register.
Upon the receipt by the Warrant Agent of a written order of the
Company set forth in an Officers' Certificate, specifying the amount of Warrants
to be countersigned, the date of such Warrants and such other information as the
Warrant Agent may reasonably request, the Warrant Agent is authorized, to
countersign the Warrant Certificates upon receipt from the Company at any time
and from time to time of the Warrant Certificates, duly executed as provided in
Section 2.2 hereof, and deliver them, without any further action by the Company.
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.
The Warrant Agent's countersignature on all Warrant Certificates
shall be in substantially the form set forth in Exhibits A and B hereto.
2.4 Form of Warrant Certificates. The Warrant Certificates
evidencing the Warrants to be delivered pursuant to this Agreement shall be
(each such Warrant a "Global Warrant") substantially in the form set forth in
Exhibit A attached hereto. Such Global Warrants shall represent such of the
outstanding Warrants as shall be specified therein and each shall provide that
it shall represent the aggregate amount of outstanding Warrants from time to
time endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be decreased or increased, as
appropriate. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the amount of outstanding Warrants represented thereby
shall be made by the Warrant Agent and DTC in accordance with written
instructions given by the holder thereof. The Depository Trust Company shall act
as the Depositary (the "Depositary") with respect to the Global Warrants until a
successor, if any, shall be appointed by the Company. Except as provided in
Section 2.8(b), owners of beneficial interests in a Global Warrant will not be
entitled to receive physical delivery of Definitive Warrants.
2.5 Temporary Warrant Certificates. Pending the preparation of
Definitive Warrant Certificates, the Company may execute, and the Warrant Agent,
upon receipt of written instructions from the Company (which shall include
names, addresses and delivery instructions), shall countersign and deliver to
the Holders, 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,
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omissions, substitutions and other variations as the officers executing such
Warrant Certificates may determine, as evidenced by their execution of such
Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will
cause Definitive Warrant Certificates to be prepared without unreasonable delay.
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 2.11 hereof.
Subject to the provisions of Section 3.6 hereof, such exchange shall be without
charge to the holder (nor shall the Warrant Agent be responsible for any such
charges). Upon surrender for cancellation of any one or more temporary Warrant
Certificates, the Company shall execute, and the Warrant Agent, upon receipt of
written instructions from the (which shall include names, addresses and delivery
instructions), from the Company, 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.
2.6 Registration, Registration of Transfers and Exchanges. The
Company will keep, at the office or agency maintained by the Company for such
purpose, a register or registers in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of, and registration of transfer and exchange of, Warrants as provided herein.
Each person designated by the Company from time to time as a Person authorized
to register the transfer and exchange of the Warrants is hereinafter called,
individually and collectively, the "Warrant Registrar." The Company hereby
initially appoints the Warrant Agent as Warrant Registrar. Upon prior written
notice to the Warrant Agent and any acting Warrant Registrar, the Company may
appoint a successor Warrant Registrar for such purposes.
The Company will at all times designate one Person (who may be the
Company and who need not be a Warrant Registrar) to act as repository of a
master list of names and addresses of the holders of Warrants (the "Warrant
Register"). The Warrant Agent will act as such repository unless and until some
other Person is, by written prior notice from the Company to the Warrant Agent
and the Warrant Registrar, designated by the Company to act as such. In the
event the Warrant Registrar is not the repository, the Company shall cause the
Warrant Registrar to furnish to such repository, on a current basis, such
information as to all registrations of transfer and exchanges effected by the
Warrant Registrar as may be necessary to enable such, repository, to maintain
the Warrant Register on as current a basis as is practicable.
When Warrants are presented to the Warrant Agent with a request to
register the transfer of the Warrants or exchange Warrants for an equal number
of Warrants of other authorized denominations, the Warrant Agent shall register
the transfer or make the exchange requested if the requirements under this
Warrant Agreement as set forth herein for such transactions are met; provided,
however, that the Warrants presented or surrendered for registration of transfer
or exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Company and the Warrant Agent, duly
executed by the holder thereof or by his attorney, duly authorized in writing.
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Furthermore, any Holder of a Global Warrant shall, by acceptance
of such Global Warrant, agree that transfers of beneficial interests in such
Global Warrant may be effected only through a book-entry system maintained by
the Holder of such Global Warrant (or its agent), and that ownership of a
beneficial interest in the Warrant shall be required to be reflected in a book
entry.
All Warrants issued upon any registration of, transfer or exchange
of Warrants shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as the
Warrants surrendered upon such registration of transfer or exchange.
2.7 Book-Entry Provisions for Global Warrants. (a) Registered
Owner of Global Warrants. Each Global Warrant initially shall (i) be registered
in the name of DTC for such global Warrant or the nominee of the Depositary and
(ii) be delivered to the Warrant Agent as custodian for such Depositary.
Members of, or participants in, DTC ("Agent Members") shall have
no rights under this Agreement with respect to any Global Warrant held on their
behalf by DTC, or the Warrant Agent, as its custodian, or under the Global
Warrant, and DTC may be treated by the Company, the Warrant Agent, and any agent
of either the Company or the Warrant Agent as the absolute owner of such Global
Warrant for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Warrant Agent, or any agent of either, the
Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC or shall impair, as between DTC
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Warrant.
(b) Transfers of a Global Warrant shall be limited to transfers of
such Global Warrant in whole, but not in part, to DTC, its successors or their
respective nominees. Interests of beneficial owners in a Global Warrant may be
transferred in accordance with the rules and procedures of DTC and the
provisions of Section 2.8. If required to do so pursuant to any applicable law
or regulation, beneficial owners may obtain Warrants in definitive form, in
exchange for their beneficial interests in a Global Warrant upon written request
in accordance with DTC's and the Warrant Registrar's procedures. In addition,
Definitive Warrants shall be transferred to all beneficial owners in exchange
for their beneficial interests in a Global Warrant if (i) DTC (A) notifies, in
writing, the Company that it is unwilling or unable to continue as depository
for the Global Warrant and the Company thereupon fails to appoint a successor
depository upon 90 days or (B) has ceased to be a clearing agency registered
under the Exchange Act and the Company thereupon fails to appoint a successor
depository upon 90 days, (ii) upon the continuance of an Event of Default under
the Indenture or (iii) the Company, at its option, promptly notifies the Warrant
Agent in writing that it elects to cause issuance of Definitive Warrants. In
addition, beneficial interests in a Global Warrant may be exchanged for
Definitive Warrants upon request but only upon at least 20 days' prior written
notice given to the Warrant Agent by or on behalf of DTC in accordance with
customary procedures. In all cases, Definitive Warrants delivered in exchange
for any Global Warrants or beneficial interest therein will be registered in
names, and issued in any approved denominations, requested by or on behalf of
DTC (in accordance with its customary procedures).
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(c) In connection with any transfer of a portion of the beneficial
interest in a Global Warrant pursuant to subsection (b) of this Section 2.7 to
beneficial owners who are required to hold Definitive Warrants, the Warrant
Registrar shall reflect on its books and records the date and a decrease in the
amount of such Global Warrant in an amount equal to the amount of the beneficial
interest in the Global Warrant to be transferred and the Company shall execute,
and the Warrant Agent shall countersign and deliver (to each beneficial owner
identified by DTC for such transfer), one or more Definitive Warrants of like
tenor and amount.
(d) In connection with the transfer of an entire Global Warrant to
beneficial owners pursuant to subsection (b) of this Section 2.7, such Global
Warrant shall be deemed to be surrendered to the Warrant Agent for cancellation,
and the Company shall execute, and the Warrant Agent shall countersign and
deliver, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such Global Warrant, an equal aggregate amount of
Definitive Warrants of authorized denominations.
(e) The Holder of a Global Warrant may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent, Members, to take any action which a Holder is entitled
to take under this Agreement or the Warrants.
2.8 Special Transfer Provisions. (a) Any beneficial interest in
one of the Global Warrants that is transferred to a Person who takes delivery in
the form of an interest in the other Global Warrant will, upon transfer, cease
to be an interest in such Global Warrant and become an interest in the other
Global Warrant and, accordingly, will thereafter be subject to all transfer
restrictions and other procedures applicable to beneficial interests in such
other Global Warrant for as long as it remains such an interest.
(b) General. The provisions hereof shall be qualified in their
entirety by any applicable securities laws of the United States and any other
applicable jurisdiction and by the procedures of any applicable clearing agency,
in each case as in effect from time to time, and all such laws and clearing
procedures shall be deemed to be incorporated herein by reference. The Warrant
Agent shall not register a transfer of any Warrant Certificate unless such
transfer complies with the restrictions on transfer of such Warrant Certificate
set forth in this Warrant Agreement.
The Warrant Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 2.7 or this
Section 2.8. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Warrant Registrar.
(c) No Obligation of the Warrant Agent. (i) The Warrant Agent
shall have no duty, responsibility or obligation to any beneficial owner of a
Global Warrant, a member of, or a participant in DTC or other Person with
respect to any ownership interest in the Warrants, with respect to the accuracy
of the records of DTC or its nominee or of any participant or member thereof or
with respect to the delivery to any participant, member, beneficial owner or
other Person (other than DTC) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such Warrants. All
notices and communications with
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respect to the Warrants shall be given to the Holders and all payments in
respect of the Warrants represented by the Global Warrant shall be made by wire
transfer of immediately available funds to the accounts specified by the Holder
of the Global Warrant. With respect to Definitive Warrants, the Company will
make all payments by wire transfer of immediately available funds to the
accounts specified by the Holders thereof or, if no such account is specified,
by mailing a check to each such Holder's registered address. The rights of
beneficial owners in any Global Warrant shall be exercised only through DTC
subject to the applicable rules and procedures of DTC. The Warrant Agent may
rely and shall be fully protected and indemnified pursuant to Section 5.5 in
relying upon information furnished by DTC with respect to any beneficial owners,
its members and participants.
(ii) The Warrant Agent shall have no responsibility, 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 (including without limitation any
transfers between or among DTC participants, members or beneficial owners in any
Global Warrant) other than to require delivery of such certificates and other
documentation of 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.
2.9 Offices for Exercise, Etc. So long as any of the Warrants
remain outstanding, the Company will 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 2.5 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or rescind such designation, as it may deem desirable or expedient;
provided, however, that an office or agency shall at all times be maintained in
the Borough of Manhattan, The City of New York as provided in the first sentence
of this Section. 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 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 and the Warrant Registrar 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 at its designated office, pursuant to Section 6.2,
in the Borough of Manhattan, The City of New York (the "Warrant Agent 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 Warrant Agent Office and
the Company appoints the Warrant Agent as its agent to receive all such
presentations, surrenders, notices and demands.
2.10 Cancellation. All Warrant Certificates surrendered for the
purpose of exercise (in whole or in part), exchange, substitution or transfer
shall, if surrendered to the
11
Company or to any of its agents, be delivered to the Warrant Agent for
cancellation or in cancellation form, or if surrendered to the Warrant Agent
shall be cancelled by it, and no Warrant Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. If the Company purchases or acquires Warrants and if the Company so
chooses, the Company may deliver to the Warrant Agent for cancellation and
retirement, and the Warrant Agent shall so cancel and retire (subject to the
record retention provisions of the Exchange Act), the Warrant Certificates
evidencing said Warrants. The Warrant Agent shall destroy such cancelled Warrant
Certificates, and in such case shall upon the written request of the Company
deliver a certificate of destruction thereof to the Company. The Warrant Agent
shall account promptly to the Company with respect to Warrants exercised and
concurrently pay to the Company all monies received by the Warrant Agent for the
purchase of the Warrant Shares through the exercise of such Warrants.
2.11 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 (which may
include posting a bond) and, in the case of mutilation or defacement, upon
surrender thereof to the Warrant Agent for cancellation, then, in the absence of
written 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 deliver, 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. Upon the issuance of any new Warrant
Certificate under this Section, the Company may require the payment from the
holder of such Warrant Certificate of a sum sufficient to cover any tax, stamp
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Warrant Agent and the
Warrant Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section 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 2.11 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 Warrant
Certificates in accordance with the provisions of this Agreement, and deliver
the new Warrant Certificates required pursuant to the provisions of this
Section.
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SECTION 3. Terms of Warrants; Exercise of Warrants
3.1 Exercise Period. Subject to the terms of the this Agreement,
each Warrant Holder shall have the right, which may be exercised commencing at
the opening, of business on the Exercisability Date and until 5:00 p.m., New
York City time on the Expiration Date, to receive from the Company the number of
fully paid and nonassessable Warrant Shares which the Holder may at the time be
entitled to receive on exercise of such Warrants and payment of the Exercise
Price then in effect for such Warrant Shares. Each Warrant not exercised prior
to 5:00 p.m., New York City time, on the Expiration Date shall become null and
void and all rights thereunder and all rights in respect thereof under this
Agreement shall cease as of such time.
The Company shall give written notice not less than 90, and not
more than 120 days prior to the Expiration Date to the Warrant Agent and the
Holders of the outstanding Warrants to the effect that the Warrants will
terminate and become null and void as of 5:00 p.m., New York City time, on the
Expiration Date; provided, however, that the failure by the Company to give such
notice as provided in this Section shall not affect such termination and
becoming null and void of the Warrants as of 5:00 p.m., New York City time, on
the Expiration Date.
3.2 Manner of Exercise. A Warrant may be exercised at any time on
or after the Exercisability Date and prior to the Expiration Date upon (i)
surrender to the Warrant Agent of the Warrant Certificates, together with the
form of election to purchase properly completed and executed by the Holder
thereof and (ii) payment to the Warrant Agent, for the account of the Company,
of the Exercise Price for each share of Common Stock or other securities
issuable upon exercise of such Warrants. The Exercise Price may be paid (i) in
cash or by certified or official bank check or by wire transfer to an account
designated by the Company for such purpose (a "Cash Exercise") or (ii) without
the payment of cash, by reducing the number of shares of Common Stock that would
be obtainable upon the exercise of a Warrant and payment of the Exercise Price
in cash so as to yield a number of shares of Common Stock upon the exercise of
such Warrant equal to the product of (a) the number of shares of Common Stock
for which such Warrant is exercisable as of the date of exercise (if the
Exercise Price were being paid in cash) and (b) the Cashless Exercise Ratio. An
exercise of a Warrant in accordance with clause (ii) of the immediately
preceding sentence is herein called a "Cashless Exercise." 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 issuable upon the exercise of Warrants that the holder
specifies are to be exercised pursuant to a Cashless Exercise multiplied by the
Cashless Exercise Ratio. Upon request of the Warrant Agent, the Company shall
promptly inform in writing the Warrant Agent of the number of shares of Common
Stock that may be delivered to a Holder upon a "cashless" exercise, and the
Warrant Agent shall incur no liability and shall be fully protected in relying
on such information provided to it by the Company. The Warrant Agent shall have
no obligation to take any action under this Section with respect to a "cashless"
exercise, nor shall it incur any liability for failing to take any such action,
if it has not received all such relevant information requested regarding such
"cashless" exercise from the Company. All provisions of this Agreement shall be
applicable with respect to a surrender of a Warrant Certificate pursuant to a
Cashless Exercise for less than the full number of Warrants represented thereby.
Upon surrender of the Warrant Certificate and payment of the Exercise Price in
accordance with this Agreement, the Company will issue shares
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of Common Stock of the Company for each Warrant evidenced by such Warrant
Certificate, subject to adjustment as described herein. Whenever there occurs a
Cashless Exercise, the Company shall deliver to the Warrant Agent a certificate
setting forth the Cashless Exercise Ratio. The Warrant Agent shall be entitled
to rely or such certificate and shall be under no duty, obligation or
responsibility with respect to any such certificate, except to exhibit the same
from time to time, to any Holder desiring an inspection thereof during
reasonable business hours. The Warrant Agent shall not at any time be under any
duty, obligation or responsibility to any Holder to determine whether the
Cashless Exercise Ratio is correct or with respect to the method employed in
determining the Cashless Exercise Ratio or the validity or value of any shares
of Common Stock.
3.3 Issuance of Warrant Shares. Subject to Section 2.10, upon the
surrender of Warrant Certificates and payment of the Exercise Price, as set
forth above, the Company shall issue shares of Common Stock in such name or
names as the Holder may designate, for the number of full Warrant Shares so
purchased upon the exercise of such Warrants or other securities or property to
which it is entitled, registered or otherwise to the Person or Persons entitled
to receive the same, together with cash as provided in Section 3.4 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. Such shares
of Common Stock shall be deemed to have been issued and any Person so designated
shall be deemed to have become a Holder of record of such Warrant Shares as of
the date of the surrender of such Warrant Certificates and payment of the per
share Exercise Price or upon a Cashless Exercise.
The Company hereby agrees that no service charge will be made for
registration of transfer or exchange upon surrender of any Warrant Certificate
at the office of the Warrant Agent designated for that purpose. Holders may be
required to make payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
transfer or exchange of Warrant Certificates and shall notify the Warrant Agent
of any applicable amounts payable hereunder.
3.4 Fractional Warrant Shares. The Company shall not be required
to issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be exercised in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon such exercise shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
pursuant thereto. If any fraction of a Warrant Share would, except for the
provisions of this Section 3.4, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company may, at its option, pay an amount in
cash equal to the Current Market Value for one Warrant Share on the Business Day
immediately preceding the date the Warrant is exercised, multiplied by such
fraction, computed to the nearest whole U.S. Dollars.
The Warrant Agent shall have no duty or obligation with regard to
the payment, calculation or valuation of fractional shares unless and until it
has received written instructions (and sufficient cash, if necessary, to satisfy
the Company's obligations) from the Company regarding fractional shares and the
Company has otherwise complied with the relevant provisions of this Agreement.
3.5 Sufficient Authorized Share Capital. The Company has and will
maintain an authorized share capital sufficient for the issuance of such number
of shares of Common
14
Stock as will be issuable upon the exercise of all outstanding Warrants. Such
shares of Common Stock, when issued and paid for in accordance with the
Agreement, will be duly and validly issued, fully paid and nonassessable, free
of preemptive rights and free from all liens, charges and security interests
with respect to the issue thereof.
3.6 Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of the Warrants and the Warrant
Shares issuable upon the exercise of Warrants, provided, however, that the
Company shall not be required to pay any tax or taxes or governmental charges
which may be payable in respect of any transfer involved in the issue of any
Warrant Certificates or Warrant Shares in a name other than that of the Holder
of a Warrant Certificate surrendered upon the exercise of a Warrant, and the
Company shall not be required to issue or deliver such Warrant Certificates
unless or until the Person or Persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or governmental charges or shall have
established to the satisfaction of the Company that such tax or governmental
charges has been paid.
SECTION 4. Adjustment of Exercise Price and Number of Warrant
Shares Issuable.
4.1 Adjustments. The Exercise Price and the number of Warrant
Shares purchasable upon the exercise of Warrants shall be subject to adjustment
from time to time as follows:
(a) Adjustments under the Plan of Reorganization. In the event
that the Company makes adjustments to the aggregate claims, the
percentage allocations or the number of shares of Common Stock to be
issued on account of existing bonds of the Company under the Plan of
Reorganization, the Company may change the number of Warrants to be
issued, the number of shares of Common Stock purchasable under the
terms of such Warrants and the Exercise Price in accordance with any
such adjustments under the Plan of Reorganization. Any adjustment made
pursuant to this Section 4.1 (a) shall become effective on the Issue
Date.
(b) Changes in Shares of Common Stock. In the event that at any
time or from time to time after the date hereof the Company shall (i)
pay a dividend or make a distribution on its shares of Common Stock in
shares of Common Stock or other shares of capital stock, (ii) subdivide
its outstanding shares of Common Stock into a larger number of shares
of Common Stock, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock or (iv) increase or
decrease the number of shares of Common Stock outstanding by
reclassification of its shares of Common Stock, then the number of
shares of Common Stock purchasable upon exercise of each Warrant
immediately after the happening of such event shall be adjusted
(including by adjusting the definition of "Warrant Shares") so that,
after giving effect to such adjustment, the Holder of each Warrant
shall be entitled to receive the number of shares of Common Stock or
other shares of capital stock upon exercise that such Holder would have
owned or have been entitled to receive had such Warrants been exercised
immediately prior to the happening of the events described above (or,
in the case of a dividend or distribution of shares of Common Stock,
immediately prior to the record date therefor). An
15
adjustment made pursuant to this Section 4.1(b) shall become effective
immediately after the effective date, retroactive to the record date
therefor in the case of a dividend or distribution in shares of Common
Stock, and shall become effective immediately after the effective date
in the case of a subdivision, combination or reclassification.
(c) Cash Dividends and Other Distributions. In case at any time or
from time to time after the date hereof the Company shall distribute to
Holders of shares of Common Stock (i) any dividend or other
distribution of cash, evidences of its indebtedness, shares of its
capital stock or any other properties or securities or (ii) any
options, warrants or other rights to subscribe for or purchase any of
the foregoing (other than, in each case set forth in (i) and (ii), (x)
any dividend or distribution described in Section 4.1(a) or (y) any
rights, options, warrants or securities described in Section 4.1(d))
then the number of Warrant Shares purchasable upon the exercise of each
Warrant shall be increased to a number determined by multiplying the
number of shares of Common Stock issuable immediately prior to the
record date upon exercise of each Warrant by a fraction, the numerator
of which shall be the Current Market Value of the shares of Common
Stock comprising one Warrant Share immediately before such dividend or
other distribution and the denominator of which shall be the Current
Market Value of the shares of Common Stock comprising one Warrant Share
less the sum of (x) any cash distributed per Warrant Share and (y) the
Current Market Value of the portion, if any, of the distribution
applicable to one Warrant Share consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants,
options or subscription of purchase rights. Such adjustment shall be
made whenever any distribution is made and shall become effective as of
the date of distribution, retroactive to the record date for any such
distribution; provided, however, that the Company is not required to
make an adjustment pursuant to this Section 4.1(c) if at the time of
such distribution the Company makes the same distribution to Holders of
Warrants as it makes to holders of shares of Common Stock pro rata
based on the number of shares of Common Stock for which such Warrants
are exercisable (whether or not currently exercisable). No adjustment
shall be made pursuant to this Section 4.1(c) which shall have the
effect of decreasing the number of Warrant Shares purchasable upon
exercise of each Warrant.
(d) Rights Issue. In the event that at any time or from time to
time after the date hereof the Company shall issue, sell, distribute or
otherwise grant any rights to subscribe for or to purchase, or any
options or warrants for the purchase of, or any securities convertible
or exchangeable into, shares of Common Stock to all holders of shares
of Common Stock, entitling such holders to subscribe for or purchase
shares of Common Stock or stock or securities convertible into shares
of Common Stock within 60 days after the record date for such issuance,
sale, distribution or other grant, as the case may be, and the sum of
(a) the offering price of such right, option, warrant or other security
('on a per share basis) and (b) any subscription, purchase, conversion
or exchange price per share of shares of Common Stock (the
"Consideration") is lower at the record date for such issuance than the
then Current Market Value per share of such shares of Common Stock, the
number of Warrant Shares purchasable upon exercise of each Warrant
shall be increased to a number determined by multiplying the number of
shares of Common Stock issuable immediately prior to the record date
upon exercise of each Warrant by a fraction, the numerator of which
shall be the number of shares of
16
Common Stock outstanding on the date of issuance of such rights,
options, warrants or securities plus the number of additional shares of
Common Stock offered for subscription or purchase or into or for which
such securities are convertible or exchangeable, and the denominator of
which shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, options, warrants or securities plus
the total number of shares of Common Stock which could be purchased at
the Current Market Value with the aggregate of the Consideration with
respect to such issuance, sale, distribution or other grant. Such
adjustment shall be made whenever such rights, options or warrants are
issued and shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive
such rights. options, warrants or securities, provided, however, that
the Company is not required to make an adjustment pursuant to this
Section 4.1(d) if the Company shall make the same distribution to
Holders of Warrants. No adjustment shall be made pursuant to this
Section 4.1(d) which shall have the effect of decreasing the number of
shares of Common Stock purchasable upon exercise of each Warrant.
(e) Combination; Liquidation. (i) Except as provided in clause
(ii) below, in the event of certain consolidations or mergers of the
Company, or the sale of all or substantially all of the assets of the
Company to another Person (a "Combination"), each Warrant will
thereafter be exercisable for the right to receive the kind and amount
of shares of stock or other securities or property to which such holder
would have been entitled as a result of such Combination had the
Warrants been exercised immediately prior thereto. Unless clause (ii)
is applicable to a Combination, if any Warrants shall be outstanding
after a Combination, the Company shall provide that the surviving or
acquiring Person (the "Successor Company") in such Combination will
enter into an agreement with the Warrant Agent confirming the Holders'
rights pursuant to this Section 4.1(e) and providing for adjustments,
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4. The provisions of this
Section 4.1(e) shall similarly apply to successive Combinations
involving any Successor Company.
(ii) In the event of (A) a Combination, and, in connection
therewith, the consideration payable to the holders of shares of Common
Stock in exchange for their shares is payable solely in cash or (B) a
dissolution, liquidation or winding-up of the Company, then the holders
of the Warrants will be entitled to receive distributions on an equal
basis with the holders of shares of Common Stock or other securities
issuable upon exercise of the Warrants, as if the Warrants had been
exercised immediately prior to such event, less the Exercise Price.
Upon receipt of such payment, if any, the Warrants will expire and the
rights of holders thereof will cease.
(iii) In the case of any such Combination, the surviving or
acquiring Person as described in this Section 4. 1 (e) and, in the
event of any dissolution, liquidation or winding-up of the Company, the
Company shall deposit promptly with the Warrant Agent the funds, if
any, necessary to pay to the holders of the Warrants the amounts to
which they are entitled as described above. After such funds and the
surrendered Warrant Certificates are received, the Warrant Agent shall
make payment to the Holders by delivering a check, or by wire transfer
of same-day funds, in such amount as is
17
appropriate (or, in the case of consideration other than cash, such
other consideration as is appropriate) to such Person or Persons as it
may be directed in writing by the Holders surrendering such Warrants.
4.2 Tender Offers: Exchange Offers. In the event that the Company
or any subsidiary of the Company shall purchase shares of Common Stock pursuant
to a tender offer or an exchange offer for a price per share of Common Stock
that is greater than the then Current Market Value per share of shares of Common
Stock in effect at the end of the trading day immediately following the day on
which such tender offer or exchange offer expires, then the Company, or such
subsidiary of the Company, shall, within ten (10) Business Days of the expiry of
such tender offer or exchange offer, offer to purchase Warrants for comparable
consideration per share of Common Stock based on the number of shares of Common
Stock which the Holders of such Warrants would receive upon exercise of such
Warrants (the "Offer") (such amount less the Exercise Price in respect of such
share, the "Per Share Consideration"); provided, however, if a tender offer is
made for only a portion of the outstanding shares of Common Stock, then such
offer shall be made for such shares of Common Stock issuable upon exercise of
the Warrants in the same pro rata proportion.
The Offer shall remain open for a period of twenty (20) Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five (5) Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase such Warrants for the applicable Per Share
Consideration.
4.3 Other Events. If any event shall occur as to which the other
provisions of this Section 4 are not strictly applicable but the failure to make
any adjustment would have the effect of depriving holders of the benefit of all
or a portion of the exercise rights in respect of any Warrant in accordance with
the essential intent and principles of this Section 4, then, in each such case,
the Company shall appoint an Independent Financial Expert, which shall give its
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 4 necessary to preserve,
without dilution, such exercise rights. Upon receipt of such opinion, the
Company will promptly mail a copy thereof to the Warrant Agent and to the
holders and shall make the adjustments described therein.
4.4 When No Adjustment Required. Without limiting any other
exception contained in this Section 4.4 and in addition thereto, no adjustment
need be made for:
(i) (A) grants to, exercises of Rights by, or issuances of equity
securities to employees, directors, consultants or advisors of the
Company or any of its subsidiaries and (B) exercises of Rights by, or
issuances of equity securities in connection with Rights previously
issued to former employees, former directors, former consultants (to
the extent that all such securities do not have an aggregate value in
excess of 15% of the equity value of the Company or represent more than
15% of the outstanding voting power of the Company's capital stock on a
fully diluted basis, as determined in good faith by the Board). As used
herein, "Right" shall mean any right, option, warrant or convertible or
exchangeable security containing the right to subscribe for or acquire
on or more shares of Common Stock, excluding the Warrants;
18
(ii) bona fide public offerings or private placements through
investment banks of international standing;
(iii) rights to purchase shares of Common Stock pursuant to a
Company plan for reinvestment of dividends or interest; and
(iv) a change in the par value of shares of Common Stock
(including a change from par value to no par value or vice versa).
(b) Adjustment of Exercise Price. Whenever the number of shares of
Common Stock purchasable upon the exercise of each Warrant is adjusted, as
provided under this Section 4, the Exercise Price per share of Common Stock
payable upon exercise of such Warrant shall be adjusted (calculated to the
nearest United States Dollar ("USD") $0.01) so that it shall equal the price
determined by multiplying such Exercise Price immediately prior to such
adjustment by a fraction the numerator of which shall be the number of shares of
Common Stock purchasable upon the exercise of each Warrant immediately prior to
such adjustment and the denominator of which shall be the number of shares of
Common Stock so purchasable immediately thereafter. Following any adjustment to
the Exercise Price pursuant to this Section 4, the amount payable, when
adjusted, shall never be less than the par value per share of Common Stock at
the time of such adjustment.
If after an adjustment, a Holder of a Warrant upon exercise of it
may receive shares of two or more classes of capital stock of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
such classes based on the relative fair market value determined in good faith by
the Board. After such allocation, the exercise privilege and the Exercise Price
of each class of shares shall thereafter be subject to adjustment on terms
comparable to those applicable to shares of Common Stock under this Section 4.
Such adjustment shall be made successively whenever any event
listed above shall occur.
4.5 Superseding Adjustment. Upon the expiration of any rights,
options, warrants or conversion or exchange privileges which resulted in the
adjustments pursuant to this Section 4, if any thereof shall not have been
exercised, the number of Warrant Shares purchasable upon the exercise of each
Warrant shall be readjusted as if (A) the only shares of Common Stock issuable
upon exercise of such rights, options, warrants, conversion or exchange
privileges were the shares of Common Stock, if any, actually issued upon the
exercise of such rights, options, warrants or conversion or exchange privileges
and (B) shares of Common Stock actually issued, if any, were issuable for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange privileges whether or not exercised; provided, however, that no such
readjustment shall (except by reason of an intervening adjustment under Section
4.1(b)) have the effect of decreasing the number of Warrant Shares purchasable
upon the exercise of each Warrant by an amount in excess of the amount of the
adjustment initially made in respect of the issuance, sale or grant of such
rights, options, warrants or conversion or exchange privileges.
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4.6 Minimum Adjustment. The adjustments required by the preceding
Sections of this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that no adjustment of the
number of shares of Common Stock purchasable upon exercise of Warrants that
would otherwise be required shall be made (except in the case of a subdivision
or combination of shares of Common Stock, as provided for in Section 4.1(b))
unless and until such adjustment either by itself or with other adjustments not
previously made increases or decreases by at least 1% of the number of shares of
Common Stock purchasable upon exercise of Warrants immediately prior to the
making of such adjustment. Any adjustment representing a change of less than
such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 4 and not
previously made, would result in a minimum adjustment. For the purpose of any
adjustment, any event shall be deemed to have occurred at the close of business
on the date of its occurrence. In computing adjustments under this Section 4,
fractional interests in shares of Common Stock shall be taken into account to
the nearest one-hundredth of a share.
4.7 Notice of Adjustment. Whenever the number of shares of Common
Stock and other property, if any, purchasable upon exercise of Warrants is
adjusted, as herein provided, the Company shall deliver to the Warrant Agent a
certificate of a firm of internationally recognized independent accountants (who
may be the regular accountants employed by the Company) setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
the Board determined the fair market value of any evidences of indebtedness,
other securities or property or warrants or other subscription or purchase
rights), and specifying the number of shares of Common Stock purchasable upon
exercise of Warrants after giving effect to such adjustment. The Company shall
promptly mail, or at the expense of the Company cause the Warrant Agent to mail,
a copy of such certificate to each Holder in accordance with Section 6.2. The
Warrant Agent shall be authorized and fully protected in relying on such
certificate and shall be under no duty or responsibility with respect to any
such certificate, except to exhibit the same from time to time, to any Holder
desiring an inspection thereof during reasonable business hours. The Warrant
Agent shall not at any time be under any duty, obligation or responsibility to
any Holder or any other Person to determine whether any facts exist which may
require any adjustment of the number of shares of Common Stock or other stock or
property, purchasable on exercise of the Warrants, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed in making such adjustment or the validity or value of any shares of
Common Stock.
4.8 Notice of Certain Transactions. In the event that the Company
shall propose (a) to pay any dividend payable in securities of any class to the
holders of its shares of Common Stock or to make any other distribution to the
holders of its shares of Common Stock, (b) to offer the holders of its shares of
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of Common Stock or shares of stock of any
class or any other securities, rights or options, (c) to effect any
reclassification of its shares of Common Stock, capital reorganization or
Combination or (d) to effect the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, or in the event of a tender offer or
exchange offer described in Section 4.2(e), the Company shall within five (5)
Business Days of making such proposal, tender offer or exchange offer send to
the Warrant Agent and the Warrant Agent shall within five (5) Business Days
thereafter send the Holders a notice (in such
20
form as shall be furnished to the Warrant Agent by the Company) of such proposed
action or offer, such notice to be mailed by the Company, or at the expense of
the Company by the Warrant Agent, to the Holders at their addresses as they
appear in the Warrant Register, which shall specify the record date for the
purposes of such dividend, distribution or rights, or the date. In such issuance
or event is to take place and the date of participation therein by the holders
of shares of Common Stock, if any such date is to be fixed, and shall briefly
indicate the effect of such action on the shares of Common Stock and on the
number and kind of any other shares of stock and on other property, if any, and
the number of shares of Common Stock and other property, if any, purchasable
upon exercise of each Warrant after giving effect to any adjustment which will
be required as a result of such action. Such notice shall be given by the
Company as promptly as possible and, in the case of any action covered by clause
(a) or (b) above, at least ten (10) Business Days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action
and, in the case of any other such action, at least twenty (20) Business Days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of shares of Common Stock, whichever shall
be the earlier.
4.9 Adjustment to Warrant Certificate. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Section 4, and Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock as are stated
in any Warrant Certificates issued prior to the adjustment. The Company,
however, may at any time in its sole discretion make any change in the form of
Warrant Certificate that it may deem appropriate to give effect to such
adjustments and that does not affect the substance of the Warrant Certificate,
and any Warrant Certificate thereafter issued or countersigned, whether in
exchange or substitution for an outstanding Warrant Certificate or otherwise,
may be in the form as so changed.
4.10 Challenge to Good Faith Determination. Whenever the Board
shall be required to make a determination in good faith of the Current Market
Value of any item under Section 4, such determination may be challenged in good
faith by the Majority Holders.
4.11 Treasury Stock. The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the Company shall
be deemed an issuance thereof and a repurchase thereof and designation of such
shares as treasury stock shall be deemed to be a redemption thereof for the
purposes of this Agreement.
SECTION 5. Warrant Agent.
5.1 Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with provisions of
this Agreement and the Warrant Agent hereby accepts such appointment.
5.2 Rights and Duties of Warrant Agent. (a) In acting under this
Warrant Agreement and in connection with the Warrant Certificates, the Warrant
Agent is acting solely as agent of the Company and does not assume any
obligation or relationship or agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants or any other Person.
21
(b) The Warrant Agent may consult with counsel satisfactory to it
(who may be counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(c) The Warrant Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in reliance upon any Warrant Certificate, certificates of shares, notice,
resolution, direction, consent, certificate, waiver, order, affidavit, statement
or other paper or document believed by it to be genuine and to have been
presented, sent or signed by the proper parties.
(d) The Warrant Agent shall be obligated to perform only such
duties as are expressly herein and in the Warrant Certificates specifically set
forth and no implied duties or obligations shall be read into this Agreement or
the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not
be under any obligation to institute any action, suit or legal proceeding or to
take any other action which may tend to involve it in any expense or liability
for which it does not receive indemnity if such indemnity is requested. The
Warrant Agent shall not be liable, accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
countersigned by the Warrant Agent and delivered by it to the Holders on behalf
of the Holders pursuant to this Agreement or for the applications by the Company
of the proceeds of the Warrants. The Warrant Agent shall have no duty,
obligations or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a Holder
with respect to such default, including any duty, obligations or responsibility
to initiate or attempt to initiate any proceedings at law or otherwise.
(e) The Warrant Agent shall not at any time be under any duty,
obligations or responsibility to any Holder to determine whether any facts exist
that may require an adjustment of the number of shares of Common Stock
purchasable upon exercise of each Warrant or the Exercise Price, or with respect
to the nature or extent of any adjustment when made, or with respect to the
method employed, or herein or in any supplemental agreement provided to be
employed, in making the same. The Warrant Agent shall not be responsible to
determine the Cashless Exercise Ratio. The Warrant Agent shall not be
accountable with respect to the validity or value of any shares of Common Stock
or of any securities or property which may at any time be issued or delivered
upon the exercise of any Warrant or upon any adjustment pursuant to Section 4,
and it makes no representation with respect thereto. The Warrant Agent shall not
be responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of Common Stock or stock certificates upon
the surrender of any Warrant Certificate for the purpose of exercise or upon any
adjustment pursuant to Section 4, or to comply with any of the covenants of the
Company contained in Section 4.
(f) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may require
from the Company:
(i) an Officers' Certificate of the Company stating that, in the
opinion of the signers, all conditions precedent, if any, provided for
in this Warrant Agreement relating to the proposed action have been
complied with; and
22
(ii) an opinion of counsel for the Company stating that, in
the opinion of such counsel, all such conditions precedent have been
complied with.
Each Officers' Certificate or opinion of counsel with respect to
compliance with a condition or covenant provided for in this Warrant Agreement
shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant
or conditions has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an opinion of counsel
may rely on an Officers' Certificate or certificates of public officials.
The Warrant Agent shall not be liable for any action it takes or
omits to take in good faith in reliance on any such certificate or opinion.
(g) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder by or from the Company available for
inspection by the Holders during normal business hours at its office designated
for such purpose. The Company shall supply the Warrant Agent from time to time
with such numbers of copies of this Agreement as the Warrant Agent may request.
5.3 Individual Rights of Warrant Agent. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or its affiliates
or become pecuniarily interested in transactions in which the Company or its
affiliates may be interested, or contract with or lend money to the Company or
its affiliates or otherwise act as fully and freely as though it were not the
warrant agent under this Agreement. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other Person.
5.4 Warrant Agent's Disclaimer. The Warrant Agent shall not be
responsible for and makes no representation as to the validity or adequacy of
this Agreement or the Warrant Certificates and it shall not be responsible for
any statement in this Agreement or the Warrant Certificates other than its
countersignature thereon.
5.5 Compensation and Indemnity. The Company shall pay to the
Warrant Agent from time to time such compensation as the Company and the Warrant
Agent shall from time to time agree in writing for its acceptance and execution
of this Warrant Agreement and
23
services hereunder. The Company shall reimburse the Warrant Agent upon request
for all disbursements, expenses and advances (including reasonable fees and
expenses of counsel) incurred or made by it in the preparation, delivery,
execution, administration, and amendment of this Agreement and the exercise and
performance of its duties hereunder, in addition to the compensation for its
services, except any such disbursements, expenses and advances as may be
attributable to the Warrant Agent's or any Agent's gross negligence or bad
faith. Such expenses shall include the reasonable compensation, disbursements,
and expenses of the Warrant Agent's accountants, experts and counsel.
The Company shall indemnify each of the Warrant Agent and any
predecessor Warrant Agent for, and hold them harmless against, any and all loss,
damage, claim, judgment, fine, penalty, demand, settlement, cost, expense or
liability including taxes (the Warrant Agent shall have no duty or obligation
under this Section 5 or any other similar provision of this Agreement which
requires the payment by a holder of a Warrant of applicable taxes or
governmental charges unless and until it is satisfied that all such taxes and/or
governmental charges have been paid in full other than taxes or charges based on
the income of the Warrant Agent) incurred by the Warrant Agent without gross
negligence, willful misconduct or bad faith on its part in connection with
acceptance of administration of this trust and its duties under this Warrant
Agreement, including the reasonable costs, expenses and attorneys' fees and
expenses of defending itself against any claim of liability arising hereunder.
The Warrant Agent shall notify the Company promptly of any claim asserted
against the Warrant Agent for which it may seek indemnity. However, the failure
by the Warrant Agent to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Warrant
Agent shall cooperate in the defense (and may employ its own counsel
satisfactory to the Warrant Agent) at the Company's expense. The costs and
expenses incurred in enforcing the right of indemnifications shall be paid by
the Company. The Warrant Agent may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its written consent which consent shall not be
unreasonably withheld. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Warrant Agent as a result of the
violation of this Warrant Agreement by the Warrant Agent provided that such
violation arose from the Warrant Agent's gross negligence or bad faith.
Anything to the contrary notwithstanding, in no event shall the
Warrant Agent be liable for special, punitive, indirect consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Warrant Agent has been advised of the likelihood of
such loss or damage. Absent gross negligence or bad faith, any liability of the
Warrant Agent under this Warrant Agreement will be limited to the amount of fees
paid by the Company to the Warrant Agent. The Company's payment obligations
pursuant to this Section 5.5 shall survive the termination of this Agreement or
the expiration of the Warrants.
To secure the Company's payment obligations in this Section 5.5,
the Warrant Agent shall have a senior lien against all money or property held or
collected by the Warrant Agent in its capacity as Warrant Agent.
24
5.6 Successor Warrant Agent. (a) The Company agrees for the
benefit of the Holders that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) The Warrant Agent may at any time resign by giving written
notice to the Company of such intention on its part, specifying the date on
which its desired resignation shall become effective; provided, however, that
such date shall not be less than thirty (30) days after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent hereunder
may be removed at any time by filing with it of an instrument in writing signed
by or on behalf of the Company and specifying such removal and the date when it
shall become effective, which date shall not be less than thirty (30) days after
such notice is given unless the Warrant Agent otherwise agrees. Any removal
under this Section 5.6. shall take effect upon the appointment by the Company as
hereinafter provided of a successor Warrant Agent (which shall be a Person
authorized under the laws of the jurisdiction of its organization to exercise
corporate trust powers) and the acceptance of such appointment by such successor
Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall
be removed, or shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent, or shall commence a voluntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or under any other applicable Federal or
state bankruptcy, insolvency or similar law or shall consent to the appointment
of or taking possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property or
affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due, or
shall take corporate action in furtherance of any such action, or a decree or
order for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a decree order by a
court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant Agent
or of its property or affairs for the purpose of rehabilitation, conservation,
winding up of or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be appointed by the Company by an instrument in writing, filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder; provided, however,
that in the event of the resignation of the Warrant Agent hereunder, such
resignation shall be effective on the earlier of (i) the date specified in the
Warrant's Agent's notice of resignation and (ii) the appointment and acceptance
of a successor Warrant Agent hereunder. If the Company shall fail to appoint a
successor Warrant Agent within this thirty (30) day period, then the registered
holder of any warrant certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the rights and obligations of such predecessor
25
with like effect as if originally named as Warrant Agent hereunder, and such
predecessor, upon full payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies, securities and
other property on deposit with or held by such predecessor, as Warrant Agent
hereunder.
(e) Any Person into which the Warrant Agent hereunder may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any Person to which the Warrant
Agent shall sell or otherwise transfer all or substantially all its corporate
trust business, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 6. Miscellaneous.
6.1 Reports. (a) The Company will file on a timely basis with the
Commission, to the extent such filings are accepted by the Commission and the
Company has a class of securities registered under the Exchange Act, (i) all
annual and quarterly financial statements and other financial information
required to be a filed with the Commission under the Exchange Act and (ii) all
current reports that are required to be filed with the Commission on Form 8-K.
(b) The Company will also be required (a) to file with the Warrant
Agent, and provide to each holder of the Warrants or Warrant Shares, without
cost to such holder, copies of such reports and documents within 15 days after
the date on which the Company files such reports and documents with the
Commission or the date on which the Company is required to file such reports and
documents.
6.2 Notices to the Company and Warrant Agent. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by the
Holder of any Warrant Certificate to or on the Company shall be sufficiently
given or made (i) five business days after deposited in the mail, first class or
registered, postage prepaid, (ii) one business day after being timely delivered
to a next-day air courier or (ii) when receipt is acknowledged by the addressee,
if telecopied, addressed (until another address is filed in writing by the
Company with the Warrant Agent), as follows:
Pathmark Stores, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Vice President, Secretary and General Counsel
Telecopy: (000) 000-0000
with a copy to:
26
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
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 designated office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company
or by the Holder(s) of any Warrant Certificate to the Warrant Agent shall be
sufficiently given or made (i) five business days after deposited in the mail,
first-class or registered, postage prepaid, (ii) one business day after being
timely delivered to a next-day air courier or (ii) when receipt is acknowledged
by the addressee, if telecopied, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Relationship Manager
with a copy to:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: General Counsel
6.3 Supplements and Amendments. This Agreement may be amended by
the parties hereto without the consent of any Holder for the purpose of curing
any ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the Warrant Agent may
deem necessary or desirable; provided, however, that such action shall not
affect adversely the rights of the Holders or the Warrant Agent. Any amendment
or supplement to this Agreement that has or would have an adverse effect on the
interests of the Holders or the Warrant Agent shall require the written consent
of the Warrant Agent (which shall not be unreasonably withheld) and the Holders
of a majority of the outstanding Warrants. The consent of each holder of
Warrants affected shall be required for any amendment pursuant to which the
Exercise Price would be increased or the number of shares of Common Stock
purchasable upon exercise of Warrants would be decreased (other than pursuant to
adjustments provided herein) or the exercise period with respect to the Warrants
would be shortened. In determining whether the Holders of the required number of
Warrants have concurred in any direction, waiver or consent, Warrants owned by
the Company or by any Affiliate of the Company shall be disregarded and deemed
not to be outstanding, except that, for the purpose of determining whether the
Warrant Agent shall be authorized and protected in relying on any such
direction, waiver or consent, only Warrants which the Warrant Agent knows are so
owned shall
27
be so disregarded. Also, subject to the foregoing, only Warrants outstanding at
the time shall be considered in any such determination.
6.4 Severability. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
6.5 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.
6.6 Termination. This Agreement (other than the Company's
obligations with respect to Warrants previously exercised) shall terminate at
5:00 p.m., New York City time on the Expiration Date.
6.7 Governing Law. THIS WARRANT AGREEMENT AND THE WARRANTS SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
6.8 Submission to Jurisdiction; Appointment of Agent for Service;
Waiver. To the fullest extent permitted by applicable law, the Company
irrevocably submits to the non-exclusive jurisdiction of any federal or state
court in the Borough of Manhattan in the City of Xxx Xxxx, Xxxxxx xxx Xxxxx xx
Xxx Xxxx, Xxxxxx Xxxxxx of America, in any suit or proceeding based on or
arising under this Warrant Agreement and the Warrants, and irrevocably agrees
that all claims in respect of such suit or proceeding may be determined in any
such court. The Company, to the fullest extent permitted by applicable law,
irrevocably and fully waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding and hereby irrevocably designates and
appoints CT Corporation (the "Authorized Agent"), as its authorized agent upon
whom process may be served in any such suit or proceeding. The Company
represents that it has notified the Authorized Agent of such designation and
appointment and that the Authorized Agent has accepted the same in writing. The
Company hereby irrevocably authorizes and directs its Authorized Agent to accept
such service. The Company further agrees that service of process upon its
Authorized Agent and written notice of said service to the Company mailed by
first class mail or delivered to its Authorized Agent shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the right of any Person to serve process
in any other manner permitted by law. The Company agrees that a final action in
any suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other lawful manner.
The Company hereby irrevocably waives, to the extent permitted by
law, any immunity to jurisdiction to which it may otherwise be entitled
(including, without limitation, immunity to pre-judgment attachment,
post-judgment attachment and execution) in any legal
28
suit, action or proceeding against it arising out of or based on this Warrant
Agreement, the Warrant Certificates or the transactions contemplated hereby.
The provisions of this Section 6.8 are intended to be effective
upon the execution of this Warrant Agreement and the Warrant Certificates
without any further action by the Company or the Warrant Agent and the
introduction of a true copy of this Warrant Agreement into evidence shall be
conclusive and final evidence as to such matters.
6.9 Benefits of this Agreement. (a) Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Warrant
Agent and the 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 holders of the
Warrant Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any preemptive
right, to receive any notice of meetings of stockholders for the election of
directors of the Company, to share in the assets of the Company in the event of
the liquidation, dissolution or winding up of the Company's affairs or any other
matter or to receive any notice of any proceedings of the Company, except as may
be specifically provided for herein.
(c) All rights of action in respect of this Agreement are vested
in the Holders of the Warrants, and any Holder of any Warrant, without the
consent of the Warrant Agent or the Holder of any other Warrant, may, on such
Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's rights hereunder,
including the right to exercise, exchange or surrender for purchase such
Holder's Warrants in the manner provided in this Agreement.
6.10 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
6.11 Table of Contents. The table of contents and headings of the
Sections of this Agreement have been inserted for convenience of reference only,
are not intended to be considered a part hereof and shall not modify or restrict
any of the terms and provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
PATHMARK STORES, INC.
By:
------------------------------------------
Name:
Title:
Xxxxx Xxxxxx Shareholder Services, L.L.C., as
Warrant Agent
By:
------------------------------------------
Name:
Title:
EXHIBIT A TO
WARRANT AGREEMENT
[FORM OF FACE OF GLOBAL WARRANT CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER REPRESENTATIVE OF
DTC AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 2.9 AND 2.10 OF THE
WARRANT AGREEMENT.
CUSIP No.
-------------
No. Warrants
------- -----
WARRANT CERTIFICATE
PATHMARK STORES, INC.
THIS CERTIFIES THAT, ______________, or its registered assigns, is
the registered holder of the number of Warrants set forth above (the
"Warrants"). Each Warrant entitles the holder thereof (the "Holder"), at its
option and subject to the provisions contained herein and in the Warrant
Agreement dated as of September 19, 2000 (the "Warrant Agreement") between the
Company and Xxxxx Xxxxxx Shareholder Services, L.L.C., as Warrant Agent (the
"Warrant Agent", which term includes any successor Warrant Agent under the
Warrant Agreement), to purchase from Pathmark Stores, Inc., a company organized
under the laws of Delaware (the "Company"), one Warrant Share per Warrant at the
exercise price of $22.31 per share (the "Exercise Price"), or by Cashless
Exercise. This Warrant is subject to the terms and provisions contained in the
Warrant Agreement, to all of which terms and provisions the Holder of this
Warrant Certificate consents by acceptance hereof. The Warrant Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full statement of the respective
rights, limitations of rights, duties and obligations of the Company, the
Warrant Agent and the Holders of the Warrants. Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement. This Warrant Certificate shall terminate and become null and void as
of 5:00 p.m. on September 19, 2010 (the "Expiration Date") or upon the exercise
hereof as to all the shares of Common Stock subject hereto. The Exercise Price
and the number of Warrant Shares purchasable upon exercise of the Warrants shall
be subject to adjustment from time to time as set forth in the Warrant
Agreement.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
WARRANT AGREEMENT AND THE WARRANTS WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
2
IN WITNESS WHEREOF, Pathmark Stores, Inc. has caused this Warrant
Certificate to be executed on behalf of the Company by two Officers of the
Company.
Dated: _____________, 2000
PATHMARK STORES, INC.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
3
Countersigned:
Xxxxx Xxxxxx Shareholder Services, L.L.C.,
as Warrant Agent
By
----------------------------------------
Authorized Signatory
[FORM OF REVERSE OF WARRANT CERTIFICATE]
This Warrant Certificate is issued under and in accordance with
and incorporates by reference the Warrant Agreement. A copy of the Warrant
Agreement may be obtained for inspection by the Holder hereof upon written
request to the Warrant Agent at Xxxxx Xxxxxx Shareholder Services, L.L.C., 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000.
Warrants may be exercised at any time commencing at the opening of
business on the Exercisability Date and until 5:00 p.m. New York City time on
the Expiration Date. Subject to the terms of the Warrant Agreement, the Warrants
may be exercised in whole or in part (i) by surrender of this Warrant
Certificate with the form of election to purchase Warrant Shares attached hereto
duly executed and with the simultaneous payment of the Exercise Price in cash to
the Warrant Agent for the account of the Company at the office of the Warrant
Agent or (ii) by Cashless Exercise. Payment of the Exercise Price in cash shall
be made in cash or by certified or official bank check payable to the order of
the Company or by wire transfer of funds to an account designated by the Company
for such purpose. Payment by Cashless Exercise shall be made by the surrender of
a Warrant or Warrants represented by one or more Warrant Certificates and
without payment of the Exercise Price in cash, in exchange for the issuance of
such number of shares of Common Stock equal to the product of (1) the number of
shares of Common Stock for which such Warrant would otherwise then be nominally
exercised if payment of the Exercise Price were being made in cash and (2) the
Cashless Exercise Ratio.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the number of shares of Common Stock issuable upon
the exercise of each Warrant shall, subject to certain conditions, be adjusted.
In the event the Company enters into a Combination following which
this Warrant remains outstanding, the Holder hereof will be entitled to receive
upon exercise of the Warrants the shares of capital stock or other securities or
other property of such surviving entity as such Holder would have been entitled
to receive upon or as the result of such Combination had the Holder exercised
its Warrants immediately prior to such Combination; provided, however, that in
the event that, in connection with such Combination, consideration to holders of
shares of Common Stock in exchange for their shares is payable solely in cash or
in the event of the dissolution, liquidation or winding-up of the Company, the
Holder hereof will be entitled to receive distributions on an equal basis with
the holders of shares of Common Stock or other securities issuable upon exercise
of the Warrants, as if the Warrants had been exercised immediately prior to such
events, less the Exercise Price.
The Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with the transfer
or exchange of the Warrant Certificates pursuant to Section 3.6 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the Warrant Shares as to which the Warrants shall not have been
exercised. This Warrant Certificate may be exchanged at the
2
designated office of the Warrant Agent by presenting this Warrant Certificate
properly endorsed with a request to exchange this Warrant Certificate for other
Warrant Certificates evidencing an equal number of Warrants. In the event any
fractional Warrant Shares would have to be issued upon the exercise of the
Warrants, the Company may, at its option, pay an amount in cash equal to the
Current Market Value for one Warrant Share on the Business Day immediately
preceding the date the Warrant is exercised, multiplied by such fraction,
computed to the nearest whole U.S. Dollar in lieu of issuing such fractional
share.
The Warrants do not entitle any holder hereof to any of the rights
of a stockholder of the Company. All shares of Common Stock issuable by the
Company upon the exercise of the Warrants shall, upon such issue, be duly and
validly issued and fully paid and nonassessable.
The Holder in whose name the Warrant Certificate is registered may
be deemed and treated by the Company and the Warrant Agent as the absolute owner
of the Warrant Certificate for all purposes whatsoever and neither the Company
nor the Warrant Agent shall be affected by notice to the contrary.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
[ ]
The undersigned hereby irrevocably elects to exercise
_____________ Warrants at an exercise price per Warrant Share of $_________ to
acquire an equal number of Warrant Shares on the terms and conditions specified
in the within Warrant Certificate and the Warrant Agreement therein referred to,
surrenders this Warrant Certificate and all right, title and interest therein to
___________________, and directs that the shares of Common Stock deliverable
upon the exercise of such Warrants be registered or placed in the name and at
the address specified below and delivered thereto.
Date: ______________, ____
1
---------------------------------
(Signature of Owner)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
---------------------------------
-----------------
1 The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
2
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be
issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL WARRANTS
The following increases or decreases in this Global Warrant have
been made:
Date of Exchange Amount of decrease Amount of increase in Number of Warrants Signature of
in Number of Number of Warrants of of this Global authorized officer
Warrants of this this Global Warrant Warrant following of Warrant Agent
Global Warrant such decrease or
increase
EXHIBIT B TO
WARRANT AGREEMENT
[FORM OF FACE OF DEFINITIVE WARRANT
CERTIFICATE]
CUSIP No.
-----------------
No. Warrants
--------- -------
WARRANT CERTIFICATE
PATHMARK STORES, INC.
THIS CERTIFIES THAT, ______________, or its registered assigns, is
the registered holder of the number of Warrants set forth above (the
"Warrants"). Each Warrant entitles the holder thereof (the "Holder"), at its
option and subject to the provisions contained herein and in the Warrant
Agreement dated as of September 19, 2000 (the "Warrant Agreement") between the
Company and Xxxxx Xxxxxx Shareholder Services, L.L.C., as Warrant Agent (the
"Warrant Agent", which term includes any successor Warrant Agent under the
Warrant Agreement), to purchase from Pathmark Stores, Inc., a company organized
under the laws of Delaware (the "Company"), one Warrant Share per Warrant at the
exercise price of $22.31 per share (the "Exercise Price"), or by Cashless
Exercise. This Warrant is subject to the terms and provisions contained in the
Warrant Agreement, to all of which terms and provisions the Holder of this
Warrant Certificate consents by acceptance hereof. The Warrant Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full statement of the respective
rights, limitations of rights, duties and obligations of the Company, the
Warrant Agent and the Holders of the Warrants. Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement. This Warrant Certificate shall terminate and become null and void as
of 5:00 p.m. on September 19, 2010 (the "Expiration Date") or upon the exercise
hereof as to all the shares of Common Stock subject hereto. The Exercise Price
and the number of Warrant Shares purchasable upon exercise of the Warrants shall
be subject to adjustment from time to time as set forth in the Warrant
Agreement.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
The internal laws of the State of New York shall govern the
Warrant Agreement and the Warrants without regard to conflict of law provisions
thereof.
2
IN WITNESS WHEREOF, Pathmark Stores, Inc. has caused this Warrant
Certificate to be executed on behalf of the Company by two Officers of the
Company.
Dated: September 19, 2000
PATHMARK STORES, INC.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
